Ron Paul`s Hour of Power—Audit The Fed Campaign Gathers Momentum


The decades-long campaign of
Ron
Paul
to have the Government Accountability Office do
a full audit of the Federal Reserve now has 313 sponsors
in the House.

Sometimes perseverance does pay
off.

If not derailed by the
establishment, the audit may happen.

Yet, many columnists and
commentators are aghast.

 An
auditors` probe, they wail, would imperil the Fed`s
independence and expose it to pressure from Congress to
keep interest rates low and money flowing when the need
of the nation and economy might call for tightening.

 They
cite Paul Volcker, who to squeeze double-digit inflation
out of the economy in the late Carter and early Reagan
years, drove the prime rate to 21 percent, causing the
worst recession since the Depression. Volcker, they
claim, prepared the ground for the Reagan tax cuts and
seven fat years of prosperity.

 That
decade, America created 20 million jobs — and another
22 million in the Clinton era. Without Volcker putting
the economy through the wringer, it could not have
happened. And had he been forced to explain his
decisions, Congress would have broken his policy.

Such is the cast for Fed
independence.

But if true, what does this say
about our republic?

 Is
it not an admission that, though Congress was created by
the Constitution, and the Fed is a creation of Congress,
our elected representatives cannot be trusted with the
money supply, cannot be trusted with control of the
nation`s central bank? To have decisions made in the
national interest, we need folks who do not have to
answer to voters.

 If
this be true, the republic is closer to its end than its
beginning, when Thomas Jefferson

said
, "In
questions of power, let us hear no more of trust in men,
but rather bind them down from mischief with the chains
of the Constitution."

 Others
contend that were it not for the independence and vision
of Fed Chair Ben Bernanke, the economy might have gone
over the cliff and into the abyss after the Lehman
Brothers collapse in October 2008.

 What
opponents of Paul`s audit are thus saying is that
elected legislators must be kept out of the temple where
the great decisions about the economy are made, that
these decisions must rest with bankers and economists
answerable, as is the Supreme Court, to themselves and
no one else.

 But
has the performance of the Fed been so brilliant any
intrusion upon its privacy is sacrilege?

 Among
the failures of the Fed is the Great Depression. As

Milton Friedman
related in his  Monetary History of the United States,

for which he won a

Nobel Prize
for Economics, the Fed hugely expanded
the money supply in the mid-to-late 1920s.

 Following
a path of least resistance, the money flowed into the
equity markets, where stocks could be bought on 10
percent margin. The market soared, and a huge bubble was
created. When it popped, scores of thousands of
investors conducted a run on the banks to get their
money out to meet their margin calls.

 Thousands
of banks, short on cash, closed. One-third of the money
supply was wiped out, and the
Fed failed to replenish the lost blood.
Thus did the

Fed cause the Great Depression.

Smoot and Hawley were framed.

 Moreover,
every bubble from the dot-com of the late 1990s to
housing this decade is a result of Fed policy. For
unless there is an excess of money sloshing around,
funds that surge into one market, be it housing, stocks
or Third World loans, have to come out of another.

 Moreover,
if the Fed has not failed dismally in its duty to keep
prices stable, how come candy bars and Cokes that cost a
nickel in the 1950s cost 50 or 75 cents today, and new
Cadillacs that sold for $3,200 in the late 1940s cost
$55,000 or $60,000 now? Who is responsible for
inflation, if not the Fed?

 Moreover,
it is now conceded that the Fed, in the early years of
this 21st century, kept interest rates near 1 percent
for too long, and created the bubble that popped in 2008
and almost brought down our own and the global
economies.

 Because
the Fed can create money out of thin air, we have been
able to wage wars on credit, shovel out trillions in
foreign aid
, World Bank and International Monetary
Fund loans, and run humongous budget and trade deficits
that have brought our country to the brink of ruin.

 And
if Bernanke is a genius, how is it he didn`t see the
train wreck coming and had to double-time it to the Hill
with Hank Paulson to plead for $700 billion to bail out
AIG, Fannie and Freddie, and buy all that rotten paper
on the books of Citibank & Co.?

 The
greatest economy the world had ever seen has been
horribly mismanaged and virtually ruined by the
decisions of presidents, Congress and the Federal
Reserve. Main Street has been wiped as Wall Street was
bailed out. Why?

Bring on the auditors!

COPYRIGHT

CREATORS SYNDICATE, INC.



Patrick J. Buchanan

needs

no introduction
to
VDARE.COM readers; his book
 
State
of Emergency: The Third World Invasion and
Conquest of America
, can
be ordered from Amazon.com. His latest book

is Churchill,
Hitler, and "The Unnecessary War": How
Britain Lost Its Empire and the West Lost
the World,

reviewed

here
by

Paul Craig Roberts.