"End the Fed!" - WHY?!

[KingOrfeo]

We didn't hear much about the Fed from the Trumpers, but "End the Fed!" has been a standard chant of the Ronulans and Paulbots. What exactly is the thinking behind it?

 

[BotanyBoy]

We didn't hear much about the Fed from the Trumpers, but "End the Fed!" has been a standard chant of the Ronulans and Paulbots. What exactly is the thinking behind it?

Try and spend American dollars in a bunch of countries that used to love our money?

They won't take it anymore......

The USD is a bad day away from not being worth the cotton it's printed on.

 

[RobDownSouth]

Mostly goldbugs and glibertarians are the ones yammering "End Teh Fed".

Because reasons.

 

[KingOrfeo]

Try and spend American dollars in a bunch of countries that used to love our money?

They won't take it anymore......

The USD is a bad day away from not being worth the cotton it's printed on.

You seem to be talking about inflation, of which there has been little in the U.S. since the 1970s. There has been some, but inflation is never a problem if it happens too slowly for people to notice. Inflation can actually be a sign of a growing economy; depressions are associated with deflation.

Anyway, how would getting rid of the Fed help? The Fed prevents inflation, or tries, certainly it does not cause it, and the country went through several inflationary periods before it was created.

 

[KingOrfeo]

Mostly goldbugs and glibertarians are the ones yammering "End Teh Fed".

Because reasons.

The 19th-Century Free Silverites wanted an inflationary monetary policy. Today's golbugs want a deflationary policy. Nevertheless they are very similar; what they have in common is a distrust and suspicion of financial institutions that has been characteristic of the more ignorant fringes of American populism since before independence. Goldbugs have the notion that non-fiat hard currency is better because gold is what it is, and no bank or government creates it or controls its value. Some have the same notion about BitCoin. British conservative Paul Johnson commented in his A History of the American People:

The Founders, particularly the Virginians, Washington, Jefferson, Madison, Monroe, et al., equated property, as a moral force, with land. Their views were articulated by John Taylor (1753-1824), like them a Virginia landowner who served in the Senate and published in 1814 a monumental work of 700 pages, An Inquiry in the Principles and Policy of the United States. Taylor distinguished between 'natural' property. such as land, and 'artificial property' created by legal privilege, of which banking wealth was the outstanding example. He saw the right to issue paper money as indirect taxation on the people: 'Taxation, direct or indirect, produced by a paper system in any form, will rob a nation of property without giving it liberty; and by creating and enriching a separate interest, will rob it of liberty without giving it property.' Paper-money banking benefited an artificially created and parasitical financial aristocracy at the expense of the hard-working farmer, and this 'property-transferring policy invariably impoverishes all laboring and productive classes.' He compared this new financial power with the old feudal and ecclesiastical power, with the bankers using 'force, faith and credit' as the two others did religion and feudality. What particularly infuriated Taylor was the horrible slyness with which financiers had invested 'fictitious' property, such as bank-paper and stock, with all the prestige and virtues of 'honest' property.

Taylor's theory was an early version of what was to become known as the 'physical fallacy,' a belief that only those who worked with their hands and brains to raise food or make goods were creating 'real' wealth and that all other forms of economic activity were essentially parasitical. It was commonly held in the early 19th century, and Marx and all his followers fell victim to it. Indeed plenty of people hold it in one form or another today, and whenever its adherents acquire power, or seize it, and put their beliefs into practice, by oppressing the 'parasitical middleman,' poverty invariably follows. Taylor's formulation of this theory fell on particularly rich soil because American farmers in general, and the Southerners and backwoodsmen in particular, already had a paranoid suspicion of the 'money power' dating from colonial times, as we have seen. So Taylor's arguments, suitably vulgarized, became the common coin of the Jeffersonians, later of the Jacksonians and finally of silver-standard Democrats and populists of the late 19th century, who claimed that the American farmer was being 'crucified on a cross of gold.' The persistence of this fallacy in American politics refutes the common assumption that America is resistant to ideology, for if ever there were an ideology it is this farrago.

That fallacy is also known as producerism, and typically takes the form of the middle/working class blaming its troubles both on those above it and those below it.

 

[BotanyBoy]

You seem to be talking about inflation,

Not really but that's part of it.

of which there has been little in the U.S. since the 1970s.

LMFAO.

That must be why a dollar today can't buy what a nickle bought in the 70's.

 

[KingOrfeo]

Not really but that's part of it.

Then what are you talking about, and how does it relate to the Federal Reserve System?

That must be why a dollar today can't buy what a nickle bought in the 70's.

I repeat:

There has been some, but inflation is never a problem if it happens too slowly for people to notice.

As it has, ever since the 1970s hyperinflation (mainly caused by the oil crisis) came to an end. And, again, how would ending the Fed stop inflation?

 

[BotanyBoy]

I repeat:

As it has, ever since the 1970s hyperinflation (mainly caused by the oil crisis) came to an end.

Whatever you say KO.

https://s-media-cache-ak0.pinimg.com/736x/2c/f8/38/2cf8381d65cebcd00b01ede8a20e1c19.jpg

And, again, how would ending the Fed stop inflation?

Probably wouldn't. At this point the system is on a runaway mode, it's TOO BIG TO FAIL!!

 

[KingOrfeo]

Probably wouldn't. At this point the system is on a runaway mode, it's TOO BIG TO FAIL!!

So, what are you talking about that relates to the "End the Fed!" thing?

 

[BotanyBoy]

So, what are you talking about that relates to the "End the Fed!" thing?

End the fed is 104 years too late.

 

[KingOrfeo]

End the fed is 104 years too late.

It was certainly a good idea when it was founded, in light of the American economy's and financial system's pre-Fed record. Why would it be any worse an idea now?

 

[4est_4est_Gump]

You seem to be talking about inflation, of which there has been little in the U.S. since the 1970s. There has been some, but inflation is never a problem if it happens too slowly for people to notice. Inflation can actually be a sign of a growing economy; depressions are associated with deflation.

Anyway, how would getting rid of the Fed help? The Fed prevents inflation, or tries, certainly it does not cause it, and the country went through several inflationary periods before it was created.

Actually the Fed used to be in charge of keeping banks stable but now they have gradually assumed a new mandate: Full employment and taking on government debt and holding it on the books. They currently have a target goal of 2% per year.

Deflations are a result of a bubble burst, not a cause of a bubble burst. The Fed creates bubbles by artificially setting the interest rate on the commodity known as money instead of letting the market determine the rate.

Fans of the Fed, and as KingO has proclaimed, ∀ economists believe that post-Keynesian (which according to his other thread should actually be labeled NeoKeynesian theory leads to prosperity and nothing else does), "theory" supports a central control of the money supply as a key to "trickle down" ( ) economics, where the rich get richer by means of new money and invest it thusly stimulating the economy. As i have been pointing out for years (and as recently as yesterday) the Fed made lots of cheap money available for investing. But when you have a government that stiffs bondholders and awards cronies, no one is going to invest in an economy like that. They are going to stay under 50 employees as much as they can and they are going to keep employees at under 30 hours a week, because the guiding (Krugman-esque) principle of central government is not only do you control the supply of money, you control the supple of health care.

One pertinent question that I heard someone ask today is, "Why are they taxing us? If debt doesn't matter to the government, if it is just an accounting gimmick between the government and the Fed, why the fuck should any of us be paying income taxes to the government?"

 

[4est_4est_Gump]

It was certainly a good idea when it was founded, in light of the American economy's and financial system's pre-Fed record. Why would it be any worse an idea now?

The Fed was a political creation to a non-existant problem.

The problem is always that markets are a creation of human nature, that they can be exuberant, that they can rise too high, but in the end, the have built-in self-correction mechanisms...

To wit: Google 'Dutch Bulb Market,' the very first example od a market bubble bursting.

 

[rocket_surgery]

End the Fed because people need to be outraged over something and they're too dumb to know what so they pick something they don't totally understand but sounds like it's probably bad.

There, question answered.

 

[4est_4est_Gump]

I "understand" it, but most people are not at all outraged.



They are oblivious. It would be a good subject for Watters World.



For more information on why to end the Fed: Mises.org.

 

[rocket_surgery]

See? Told ya.

 

[4est_4est_Gump]

The Fed, with its current mission, is bad.


In its former incarnation, it was benign, but tumors are like that...


All political institutions eventually become weapons with which to exercise power.

 

[Libsam]

The Creature from Jekyll Island

That will help you understand, KingO.

 

[Libsam]

"You are a den of vipers. I intend to wipe you out, and by the Eternal God I will rout you out...If people only understood the rank injustice of the money and banking system, there would be a revolution by morning." ~Andrew Jackson

Andrew Jackson's presidency is known as the Free Banking Era.

 

[Libsam]

Did you know that the US constitution says that only Congress has the right to issue money and regulate its value?

A work around was created in 1913, The Federal Reserve- which is privately owned and their monetary policies are not controlled by any branches of our government.

 

[KingOrfeo]

Did you know that the US constitution says that only Congress has the right to issue money and regulate its value?

A work around was created in 1913, The Federal Reserve- which is privately owned and their monetary policies are not controlled by any branches of our government.

That was intentional. If the Fed were a government agency and not insulated from political pressure, Congress or the Admin would always be demanding it adjust interest rates in such a way as to improve their re-election prospects, which is not a sound basis for monetary policy.

I do sometimes wonder, however, if the members of the Federal Reserve Board would be better elected by the people than appointed by the president. Not all political pressure is bad.

 

[Libsam]

That was intentional. If the Fed were a government agency and not insulated from political pressure, Congress or the Admin would always be demanding it adjust interest rates in such a way as to improve their re-election prospects, which is not a sound basis for monetary policy.

I do sometimes wonder, however, if the members of the Federal Reserve Board would be better elected by the people than appointed by the president. Not all political pressure is bad.

You do realize that The Fed appointees of the president only represent 1/3 of the members on the board?

 

[BotanyBoy]

It was certainly a good idea when it was founded,

Not really.

If the Fed were a government agency

It might as well be one.

and not insulated from political pressure,

https://media.giphy.com/media/L8XuphFGqlSfe/giphy.gif

 

[Mello_SixtyNine]

That was intentional. If the Fed were a government agency and not insulated from political pressure, Congress or the Admin would always be demanding it adjust interest rates in such a way as to improve their re-election prospects, which is not a sound basis for monetary policy.

I do sometimes wonder, however, if the members of the Federal Reserve Board would be better elected by the people than appointed by the president. Not all political pressure is bad.

You think the Fed is insulated from political pressure? Lol, the interest rate was set to fucking zero for years. This is probably the best chance to get a Fed Audit bill passed.

 

[4est_4est_Gump]

You think the Fed is insulated from political pressure? Lol, the interest rate was set to fucking zero for years. This is probably the best chance to get a Fed Audit bill passed.

Yes

And not only that, but the theft from Freddie and Fannie of monies that should have been paid out in dividends to the people stupid enough to invest in governmental "private entities" by the Obama Administration that they poured into Obamacare to shore it up.