In anticipation of his new book, End The Fed, Ron Paul was recently featured in a CNBC article online. As of the 18th of Sept., 11,998 responses were made to an unscientific survey which asked, “Should the FED be abolished?” 90% replied yes, just 5.5% no, and 4.9% were unsure.
In the article, Paul argues “Prosperity can never be achieved by cheap credit… If that were so, no one would have to work for a living. Inflated prices only deceive one into believing that real wealth has been created.”
“The economic crisis has changed everything,” Congressman Paul contends.
His book critiques the inequities of a highly managed economy. Further, his house resolution 1204, Audit the Fed or the Fed Transparency Act, politicizes the issue of monetary policy, which has, since 1913, fallen under the category of technocracy, whereby policy makers decide interest rates, printing practices, etc.
It’s as if we believe that money can be grown on trees, and we don’t stop to realize that if it did grow on trees, it would take on the value of leaves in the fall, to be either mulched or bagged and put in a landfill. That is to say, it would be worthless… When we unplug the Fed, the dollar will stop its long depreciating trend, international currency values will stop fluctuating wildly, banking will no longer be a dice game, and financial power will cease to gravitate toward a small circle of government connected insiders.
Paul is correct in asserting that cheap credit and low interest rates have exacerbated the current crisis, however, used for democratically oriented projects such as production, cheap credit can be a publicly run social utility. In the context of crony-capitalism, it does lower the banks cost of funds and increase their profits. Since the repeal of the Glass-Steagall Act in 1999, banks have evolved into high-risk investment houses that trade financial instruments like interest rate derivatives and mortgage-backed securities, to name but two of many. These virtually free and abundant funds by the Fed enable banks to pay depositors zilch on their savings.
While U.S. taxpayer money goes to funding credit lines for some of the world’s largest corporations and even citizens of other countries, as is the case with New Zealand, they find their own credit line dried up, with small businesses going under and foreclosures surmounting. The New Deal took a lion’s share of governmental authority out of the legislative branch and put it in the Executive branch. The Executive Branch and its subsidiary departments and agencies write bills congress passes, handing them to sponsors. Special Interests have functioned in much the same way. On the other hand, The New Deal created services such as food stamps, welfare and unemployment, without which the approximately 25% of Americans currently without work would have starved this year or be on the brink of starvation.
No credence ought to be handed to Ben Bernanke, who submits the recession is over. The recession is not over, and many critical New Deal agencies and programs face abolition or privatization.
Congressman Paul, an extreme libertarian, remarked recently that government healthcare is not a right. He believes in small government, a relevant argument. On the other hand, we ask who the regulator in such an order would be? As Larry Flynt recently noted, in these times corporations don’t run the government; they are the government. Now that corporations wield the joystick of many crucial government institutions, departments, agencies and organizations, it is crucial that the U.S state be given counter-means determined and overwhelmingly influenced by the populace. Government is not the enemy, indeed big government is not the enemy, for government is merely a tool by which means are realized. For example, over the last year the government has been used as a tool by Wall Street in order to enrich massive multi-nationals, in most cases foreign multi-nationals.
Paul is a critic of Obama’s health plan, which he calls a “magnanimous gift to the health insurance industry.” He notes that the insurance industry has lobbied for decades for mandated coverage. Though pre-existing conditions would have to be covered, it is a small price for the insurance industry to have to pay for increasing their client pool to 100% of the American people. Under the plan, the insurance industry has immunity from all lawsuits, just as Swine Flu vaccine makers, such as Baxter, received immunity from lawsuits stemming from degenerative health conditions caused by their vaccines.
Taxes and fines will see to it that all Americans have to buy into the health care program. Paul ponders a world in which citizens buy memberships to certain hospitals or clinics as if it were a gym. And then bemoans the difficulty for doctors to make house calls. Alternative medical practices are wholesale disadvantaged when the health insurance plan is required. Indeed, alternative health care practices are suppressed. The only options the government has, he says, are force and favors, when attempting to “solve” social issues.
Paul argues that there have been doctors and medicine long before there was health insurance, and the current debate in America is a misnomer, for it nexuses intimately the concepts of health care and insurance.
Under a free government, people have the right to life. This includes the right to healthcare as a means to furthered life. Therefore, all peoples deserve a universal, diverse healthcare system based on citizen choice and free, well-paid providers. The healthcare discussions in the US, however, represent the degree to which the government does not represent the people, but, instead powerful interest groups.
Desperate to resolve this issue, an issue resolved by the rest of the industrialized world, Americans support Obama in his push to pass the healthcare bill. Due analysis, nonetheless, unveils the bill as a means of protecting and increasing the profits of the insurance companies.
A keystone attribute of the health care bill is the “individual mandate,” which makes a REQUIREMENT of buying the health insurance. Senate Committee chairman Max Baucus (D-Mont) has proposed a $3,800 fine on Americans who fail to purchase health insurance.
The ailing economy, with real unemployment around 20-or-so percent, has left approximately 50 million Americans uninsured. Moreover, around 50% of the population has only two weeks of savings to their name. How is it a good idea to burden the taxpayer more?
Former Assistant Secretary Treasury, Paul Craig Roberts, states “these proposals are like solving the homeless problem by requiring the homeless to purchase a house.”
Obama: “we’ll provide tax credits” for “those individuals and small businesses who still can’t afford the lower-priced insurance available in exchange.” For those without incomes, a tax credit is not much help.
Medicare, currently, is even too expensive for most Americans, as $100 per month is deducted from the covered persons Social Security check. Moreover, retired persons on Medicare who enjoy no other significant income must pay $4,500 per year in premiums, allowing them coverage which still leaves more than half the prescription medicines out-of-pocket. Oft they pay more. Despite the premiums, payments to doctors and other healthcare providers has fallen alongside coverage for policy holders.
In the midst of government bankruptcy and a tax revolt, adding more public expenditures to the system will in the end benefit insurance companies, and use mandated private coverage as a safety net for curtailing public expenses Medicare and Medicaid.
In the background, the white noise in the corporate media champions a jobless recovery, as though it were a good thing! But, due to the widening gap between reality and the propaganda, Americans are growing more and more skeptical of their government and media, portending some sort of tipping point in the near-future. Their need now be an emphasis put on organization. People must be able to feed themselves and their neighbors, and means to equitable ends must be pondered and acted upon. The economy may very well move sideways for some time now, in anticipation of the 2010 elections, as the market makers and manipulators attempt to keep the makeup of congress and the senate favorable to their elitist agenda. Nonetheless, things will deteriorate, especially as the U.S. population grows more disgruntled at the disconnect between their interests and the motives of their representatives.
In August, unemployment rose in 27 states. California and Nevada reached record levels of unemployment. Officially, there unemployment rates are 12.2 percent and 13.2 percent, (un)respectively. To be sure, real unemployment numbers of those two states sit at around 27 percent and 28 percent. Conservatively, the U.S. has lost about 6.9 million jobs since the crisis started in December 2007, the most of any downturn since the Great Depression.
Having exacerbated the problem by not implementing controls a la the Glass-Steagall Act, President Obama continues to give lip service to the notion of tighter controls and regulatory measures. He maintains that international cooperation stopped our “economic freefall,” when, in reality, market manipulation and bayonnet economics has slowed the collapse, a trend most likely continued in anticipation of 2010 elections.
Obama recommended a new agency to oversee consumer products, including mortgages and credit cards. There are a myriad of other ways to abate market imbalances. For instance, allowing the bankrupt banks to fail, instead of bailing them out in a socialism-for-the-rich-capitalism-for-the-poor economic system. The bailout money could have easily and unquestioningly paid off all mortgages in the U.S. I repeat, all mortgages. A 1% Tobin Tax on all financial transactions would be a form of taxation on the derivatives and other markets outside of the real economy which provides no productive service; consumers pay, in California for example, a 10 percent tax on everything they buy. That is, the sales tax. Why ought not the uberclass pay something similar?
Obama also suggested new ways for the government to dissolve failed companies and oversee the inherent systemic risks of behemoth financial institutions. Why not allow a truly centrifugal, extremely-regional free-market of free associations amongst individuals allow for creativity and diversity to rule the exchange of goods and services? The United States, indeed each state, must turn its economy inwards to build up for domestic demand if Americans intend to avert systemic collapse within the decade, more likely two and a half years. Deglobalization results in neo-serfdom when the multinational can oversee impotent municipal-associations. At the end of empire, corruption is endemic and, considering the allocation of wealth as it is, functions as a propaganda measure. How demeaning it is for Americans to see absolute disregard of their well-being. This is dangerous: for monumental levels of corruption and nefariousness, as more and more people are forced to markets still thriving such as military and security, are being normalized in the collective brain.
When Bank of America agreed to buy Merril Lynch last year as markets were crashing using taxpayer money, without telling us the terms of the deal, Merril Lynch paid their employees 3.6 billion in bonuses to make sure bonuses were paid before the deal with Bank of America went through, the biggest payout in their history. This according to Max Keiser and Stacy Herbert. Bank of America approved the bonuses. Bank of America claimed to not be paying out such bonuses and were recently fined by
the FCC 33 million dollars. Thankfully, Judge Jed. S Rakoff has stepped in and demanded a hearing.
Bank of America and Merril Lynch have conceded no wrong-doing.
Rakoff: The settlement “suggests a rather cynical relationship between the parties. The FCC gets to claim that its exposing wrongdoing on the park of Bank of America in a high-profile merger, the bank’s management gets to that they have been coerced into an onerous settlement by overzealous regulators.” Regulators have been in the pockets of these investment banks doing absolutely nothing over the last twenty years to reign in their corporate, oligopolists’ jubilee.
All parties were in violation of the law in a terroristic manner. As Keiser notes, this is financial terrorism, at the expense of shareholders, stakeholders and any sense of human rights and truth.
August numbers show that bank loans from bailed out parties were down 4.4 percent, despite Geithner maintaining in congress they were increasing lending. Derivatives contracts are being stacked up again, and the banks once “too big to fail” are bigger.
Economics is a highly ideological and compartmentalized field. It’s paradigm has done much damage to this planet and human social order, justifying make believe economic relationships and associations. Justifying a free-market which hasn’t existed… since the paleolithic. Ok, perhaps the end of the 18th century. Paleolithic. This crisis is not a normal cycle, but instead a power play by the sentient commanding heights to consolidate not wealth or money, but power. Debts are often not repaid. These debts held by the industrialized west will not be repaid. There needs to be a jubilee a la the Roman Jubilee. We must get rid of the debts or else the economy will never catch up: Permanent Depression.
Government can certainly be a tool to actualize a more just and fair modern order, however the movement of minds is the most useful tool. In a time of disintegration, persons ask the what’s, why’s, and who’s; and so now such persons are more prone to experiencing the earthquake of enlightenment.
There are many virtues to the concept of a free-market, for it does not escape easily the imagination of most typical thinkers. The concept, after all, has been theorized and discussed for centuries. A highly decentralized free-market colored by creativity inspiring diversity runs against the centralizing and Luciferean forces of history, which, in our day and age, enjoy a power that goes a long way.
Justin O'Connell blogs at The Handshake Times. He can be reached at: joconne@linfield.edu. Read other articles by Justin, or visit Justin's website.
This article was posted on Monday, September 28th, 2009 at 8:59am and is filed under Banks/Banking, Economy/Economics, Health/Medical.
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