Willian Greider: Dismantling the Temple (The Nation)
By William Greider
The Nation | July 15, 2009
The financial crisis has propelled the Federal Reserve into an excruciating political dilemma. The Fed is at the zenith of its influence, using its extraordinary powers to rescue the economy. Yet the extreme irregularity of its behavior is producing a legitimacy crisis for the central bank. The remote technocrats at the Fed who decide money and credit policy for the nation are deliberately opaque and little understood by most Americans. For the first time in generations, they are now threatened with popular rebellion.
During the past year, the Fed has flooded the streets with money--distributing trillions of dollars to banks, financial markets and commercial interests--in an attempt to revive the credit system and get the economy growing again. As a result, the awesome authority of this cloistered institution is visible to many ordinary Americans for the first time. People and politicians are shocked and confused, and also angered, by what they see. They are beginning to ask some hard questions for which Federal Reserve governors do not have satisfactory answers.
Where did the central bank get all the money it is handing out? Basically, the Fed printed it, out of thin air. That is what central banks do. Who told the Fed governors they could do this? Nobody, really--not Congress or the president. The Federal Reserve Board, alone among government agencies, does not submit its budgets to Congress for authorization and appropriation. It raises its own money, sets its own priorities.
Atlantic Monthly article
This article is about as condescending as this garbage, "Redesign the Dollar."
The quickest fix for a brand in trouble, some say, is nothing more than a cosmetic makeover. That may be a cliché, but with our financial system in crisis, the time is right to redesign the currency of the United States. Anyone trying to understand our national values would be baffled by the rococo Victoriana and Masonic mumbo jumbo that festoon a dollar bill. Are they an apt metaphor for the labyrinthine workings of the world of credit-default swaps and collateralized debt obligations? Perhaps. But the result is anachronistic and illegible, as are the $5, $10, and $20 bills, which have hardly been redeemed by the addition of those giant, grimly functional Helvetica numerals intended to simply (in the ugliest possible way) make the bills easier to tell apart. A piece of currency is the ultimate symbol. A more transparent, rational financial system deserves money that looks the part. With the economy bottoming out, it’s time to start from scratch.
http://www.theatlantic.com/doc/200907/ideas-dollar
!!!!We need to build political strength and political will????
We need to build political strength and political will.
The author's statement of mistakes and
problems with the Fed is good, clear, and succinct. Unfortunately his "solution" is mindless wishful thinking and continues the same problem of power overlords -- it just replaces on gang with another, the one the author prefers of course.
Pretty *crappy* read.
Very dissappointed. His only mention of Ron Paul is how giving more power to the Fed could hurt him? What?
This line pretty much sums up the authors mode of thinking :
"But this crisis has demonstrated that the present arrangement no longer works for the public interest. The society of 1913 no longer exists, nor does the New Deal economic order that carried us to twentieth-century prosperity."
He still is under the illusion that the New Deal brought us out of the depression and into a new era of prosperity - led by the Fed. He clearly misses the point.
Money is created by the markets
Money should be created by the markets, not secretive central bank, not government. Many in Congress want to audit the Federal Reserve because they want to dismantle it so they can put the government in charge of the task of overseeing interest rates and printing money. Such arrangement will be a short-lived one (shorter than the current one run by the Fed) with disastrous consequences.
This part is very
This part is very telling.
"A few months back, I ran into a retired Fed official who had been a good source twenty years ago when I was writing my book about the central bank, Secrets of the Temple: How the Federal Reserve Runs the Country. He is a Fed loyalist and did not leak damaging secrets. But he helped me understand how the supposedly nonpolitical Fed does its politics, behind the veil of disinterested expertise. When we met recently, he said the central bank is already making preparations to celebrate its approaching centennial. Some of us, I responded, have a different idea for 2013.
"We think that would be a good time to dismantle the temple," I playfully told my old friend. "Democratize the Fed. Or tear it down. Create something new in its place that's accountable to the public."
The Fed man did not react well to my teasing. He got a stricken look. His voice tightened. Please, he pleaded, do not go down that road. The Fed has made mistakes, he agreed, but the country needs its central bank. His nervous reaction told me this venerable institution is feeling insecure about its future. "
We've got 'em on the ropes! Keep up the pressure! Also this,
"Instead, Congress should create a stand-alone development fund for long-term capital investment projects (this would require the long-sought reform of the federal budget, which makes no distinction between current operating spending and long-term investment).
The reference to the Federal budget and current expenditures and long term investments is in my view a reference to claims made by former GAO Comptroller General David Walker in the GAO document called "Fiscal Stewardship: A Critical Challenge Facing Our Nation." Read the preface, and you'll see how unfunded liabilities are not accounted for because of the changes in accounting methods that happened under Clinton. The real national debt at that time (Sept. 2006) was like $9 Trillion + $50 Trillion in unfunded liabilities (Medicare, Medicaid, Social Security, Insurance payments, VA benefits, and anything else we promised to pay in the future.)
http://www.gao.gov/new.items/d07362sp.pdf
Today it is much worse. This article was an informative read, but like many of you, I don't necessarily agree with the solutions provided. WTF is this "Democratize the FED" crap? Screw that! KILL IT! Make it die, and although this institution deserves a slow painful tortured death, for our sake it needs a double-tap to the head asap! If not, then what I fear could happen is that it's powers end up being delegated to the IMF.
Dismantle the Temple, yes,
Dismantle the Temple, yes, but replace it with what?
Greider's answer is not Ron Paul's answer. This is where the next battle needs to shift, and quickly. Otherwise, the Fed will just be rolled fully into the Federal government, its fiat money creating powers fully in tact.
The banksters are not going
The banksters are not going to give it up. At least not easily. This is why I pray for a peaceful revolution. I hope my prayers are answered.
You Judge A Tree By It's Fruit, NOT its Flower
I agree. The money changers
I agree. The money changers worked too long and too hard to get a grip on America's money supply to give it up again.
First and second failures were when their bank charters were not renewed,
But it appears the third time was the charm when they created the Federal Reserve. It's lasted for almost a hundred years.
At least they will have to
At least they will have to fight us through the electoral process rather than getting their way in secret like they do today.
Ventura 2012
"Fight us?"
The American people are pushovers when it comes to the ballot box.
Nothing but false choices and a 90% reelection rate for incumbents.
Michael, what is your take on original jurisdiction
and the reseating of the proper government? http://www.teamlaw.org/Government/usmap.htm
Thanks for a good thread.
If the Fed is audited, it
If the Fed is audited, it will become politicized. The 19th century saw elections won and lost over monetary policy as it was a relevant issue in the minds of the public. I understand your cynicism though.
Ventura 2012
It has to be....
...Now it's front page news everywhere.
It has to be audited as 70% of Americans demand it be audited.
Then the public can elect real candidates.
Then they can flat abolish it should that be their choice....