Burt Prelutsky is a contributing author –
It is time to get rid of The Federal Reserve (‘the Fed’), the central banking system of the United States. It came into existence in 1913 through an act of Congress after a series of financial panics. It was felt that by putting an autonomous body in charge of the economy, such things could be avoided by raising and lowering the interest rate and controlling the amount of money in circulation.
Suspicion that it might not be the solution to the problem came as soon as 1920 with a two-year depression, followed by recessions in 1923 and 1926. This was followed by the Great Depression in 1929, of course. Since then, we have had a dozen recessions or one every seven years or so.
As remedies go, the Federal Reserve has not proven to be a great success. In fact, not only has the Fed not prevented financial miseries from occurring, but many people believe that between the Fed and FDR, the Great Depression was dragged out for years, allowing Roosevelt the opportunity to introduce a many of his socialist policies. Long before Rahm Emanuel suggested that a politician should never let a crisis go to waste, Roosevelt was teaching a master class on the subject.
When American author and filmmaker G. Edward Griffin wrote a book about the Fed, he titled it “The Creature from Jekyll Island,” the Georgia island being the place where Woodrow Wilson’s banker cronies first put the Fed together.
The reason that economist Milton Friedman railed against the Fed and you now hear President Donald Trump doing the same is, one, because the Fed’s Board members are like Supreme Court justices, except most people know the names and reputations of the nine who wear robes to work; and, two, because, not only does the Fed not prevent panic, but simply by indicating that it will raise or lower interest rates by a fraction of a point, it can create wholesale chaos.
Admittedly, Wall Street has been a nervous Nellie ever since Trump took a stand against China by leveling tariffs on their products, but it took Fed Chairman Jerome Powell’s recent announcement that he was only going to lower interest rates by a quarter of a point to send the Market plummeting 800 points in a single day.
The United States is now the leading producer of oil and natural gas. It has brought talented entrepreneurs into the energy field which we once thought was on its last legs.
Many of these people wading into this exciting area of American commerce have been throttled by the game the Fed plays with interest rates. To invest or not to invest is not a Shakespeare soliloquy but a question that must be pondered carefully because of the absurd secret game this all too powerful organization plays with our lives.
The Fed is responsible for stifling the free market established by our Founding Fathers. Right now, the men and women wishing to succeed Donald Trump as our next president boast of spending trillions of dollars to control nature by establishing their desired temperature for our planet. Does the Fed weigh in with an opinion as to how much money they will have to print to finance the climate delusion? No, they sit back on their high horses smugly ignoring potential financial disasters around us.
And here we bet most of you thought that, when it came to federal bureaucracies, you only needed to lie awake nights worrying about the Justice Department, the FBI, the CIA, the NSA, the EPA and Congress!
There are countless reasons to undo the damage produced by Congress in 1913 by creating the Federal Reserve. We will just offer a baker’s dozen.
1 – it can affect the economy in an instant just be talking about a plan for interest rate alterations.
2 – it has total control over the money supply in a way which can be unrelated to the free market economy. This would have our Founding Fathers rolling over in their graves.
3 – the Fed has devalued our money by printing too much of it. The dollar has lost about 95% of its value since the Fed stepped in in 1913. In other words, it takes about $1 today to buy as much as one could buy for about 4 cents in 1913. This means one would have to spend $2,591.63 in 2019 to get the same value as one could get for $100 in 1913 (see the Inflation Calculator). The following graph from the aforementioned webpage illustrates this well:
4 – the Fed is the ultimate cause of inflation that steals from those who can least afford it, the middle class.
5 – the members of the Fed with so much power are unelected and unaccountable; just ask President Trump after he mistakenly appointed Jerome Powell to head the Fed.
6 – the Fed is partially responsible for every financial crisis in the past century by reacting too quickly and unwisely to changes in the economy creating a seesaw that does not stop.
7 – transparency in the Fed’s operation is none existent
8 – the US Congress has no oversight
9 – the Fed is a bank that has never been audited
10 – the Fed is a central bank which serves the Federal Reserve spendthrift politicians, big banks and its friends, not the average US citizen
11 – the Federal Reserve, a central bank, was never enumerated in the Constitution
12 – a partial audit of the Fed in July 2011 found that it had secretly bailed out corporations and banks around the world to the tune of $16 trillion during its past three years
13 – the Fed is responsible for out of control spending by the Congress because voters can impede tax hikes but not the printing of more money by the Fed.
It is clearly high time to finally end The Federal Reserve.
Jay Lehr is Senior Policy Analyst for the International Climate Science Coalition, Burt Prelutsky is an essayist at Burt Prelutsky@icloud.com.