There are a few things about my past “End the Fed” entry that I do regret leaving out. The following will hopefully cast a little more light on the “End the Fed” issue.
The Gold Standard- Bankers in the 1800s fought tooth and nail to keep the gold standard. They loved it because it kept inflation in check and limited the amount of dollars in circulation. This, in turn, made the value of the dollar more vulnerable to speculators and other international forces that act on the value of gold. Not to mention, a gold standard today would handcuff the government’s ability to respond to economic crises. At the core, that is what is really at issue here. This is the extreme view of “small government” that Ron Paul fans slip through the back door. More of the same conservative brain washing that gets half-informed people to tout beliefs that move the country further towards “small government”, as if the government is still relevant today.
Inflation– The Fed prints money, this causes inflation. Again, this is a half truth. The Fed does print money. They also pump more money into circulation by offering member banks loans at the discount window. When Alan Greenspan was the Fed chair, he did both of these things in spades. He also kept interest rates low for most of his tenure. In an age of wild financial speculation, all of Greenspan’s actions amounted to pouring gas on the fire. When the “End the Fed” crowd think about a runaway Fed, they are really only thinking of Greenspan.
Modern-day inflation is caused by a host of factors. The rising cost of oil is a major one. Oil prices have risen over the past ten years, which raises the prices of everything else. Ending the Fed will not end inflation and neither will the gold standard. Again, blaming the Fed is more “government is the problem” speak which lets speculators and oil companies off the hook while continuing the “small government” brain washing.
Sources- Chances are, people have heard the “End the Fed” argument in one place first: the internet. Now, if you have only a fuzzy notion of American history or economics and Ron Paul or Alex Jones are ominously telling you to “End the Fed” and it seems like so many people agree, you would probably agree as well. Of course, this counts as “research” in this day and age. What is funny though is how many of the most popular sources for ending the Fed have outright LIED, like the movie Zeitgesit which presents a Woodrow Wilson quote that has been debunked a zillion times as an outright fabrication or books that have been shown to intentionally misquote the Constitution.
If this was a true scholarly community, these sources would be trashed and the people that wrote them would be outcasts. But on the internet it does not matter if your source has propagated known lies, only that it fits your world view and a lot of other people seem to like it.
“End the Fed” lets corporations off the hook. It implies that the government forced all these banks to gamble away money or Wall Street to speculate wildly. If the government was not forcing these poor heroes who are only trying to play in the free market, they would not have run our economy off of a cliff. All “End the Fed” is is free market rhetoric put in a revolutionary syringe to be injected directly into the blood stream so you can act all rebellious while really being under the spell of uber-capitalism like a good automaton.