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Forum Post: Salon: Ron Paul's wacky but Influential Fed policy

Posted 12 years ago on Dec. 22, 2011, 4:29 p.m. EST by anonwolf (279) from West Peoria, IL
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The Republican Party, falling deeper into the clutches of Ron Paul’s radical ideology, has a new item on its anti-populist agenda: Castrate the Federal Reserve so that it no longer can promote job growth.

In Fed-speak, this is known as cutting in half the Fed’s “dual mandate” to curb inflation and unemployment, by taking out the “unemployment” part — the nation’s persistently high jobless rates notwithstanding. The ranking Republican on the Joint Economic Committee, Kevin Brady, disclosed this week that he is drafting legislation that would turn the Fed’s long-standing “dual mandate” into a single mandate.

This great leap backward isn’t likely to happen as Democrats remain in control of the Senate. But what it does show is the extent to which Ron Paul’s fixation with the Fed has infected the Republican Party. Anti-Fed rhetoric, once the province of ultra-right groups like the John Birch Society, has gone mainstream with the rise of Paul, who has been surging in the polls and now ranks third behind Mitt Romney and Newt Gingrich. He is actually leading in Iowa, and a victory there would really rev up his famously loyal followers.

It’s no secret that Paul wants to end the Fed. That’s the title of one of his books, and it’s central to his libertarian ideology, which is influenced by Ayn Rand, who opposed the Fed’s existence, and Austrian economists who championed laissez-faire. In January 2011 he became head of the House Financial Services subcommittee overseeing domestic monetary policy. Given Paul’s growing influence, it’s not surprising that Republicans are pushing for a measure that would cut back significantly on the Fed’s power. Bray’s legislation amounts to “Ron Paul Lite.” The proposed law wouldn’t toss the Fed in the ashcan, as Paul wants, but it would go to the very heart of the Fed’s mission.

The dual mandate has been around since 1977, when the Federal Reserve Act was amended to require the Fed to strive to curb both unemployment and inflation. The operative language in the Federal Reserve Act, in its Section 2a, is as follows: “The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregrates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.”

What this means is that the Fed can’t just focus on inflation, but must take into consideration whether its policies will help or impede the functioning of the economy as a whole. Fed Chairman Ben Bernanke made that point in a speech to the CATO Institute in 2007. In other words, the dual mandate is just common sense. It’s not terribly controversial, either, unless you’re really indifferent to throwing people out of work.




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[-] 2 points by Anachronism (225) 12 years ago

I'd love to see RP enact his policies so capitalism would collapse. These assholes in control now will drag it out forever

[-] 1 points by GreedKills (1119) 12 years ago

Please don't forget about Christain Reconstructionists and his ties to so many of them like Gary North and Chuck Baldwin.

Christian Economics’ Meets the Antiunion Movement


Gary North was nearly impossible to track down. He did not return multiple e-mails, and when finally reached by phone, he refused to talk and hung up.

But if you know where to look, he is everywhere.

Mr. North, a onetime aide to Representative Ron Paul of Texas, a possible 2012 Republican presidential candidate, is the leading proponent of “Christian economics,” which applies biblical principles to economic issues and the free market.


These “Reconstructionists” are believers in Christian Reconstructionism, the philosophy of R. J. Rushdoony, who died in 2001. According to Reconstructionism, a Christian theocracy under Old Testament law is the best form of government, and a radically libertarian one. Biblical law, they believe, presupposes total government decentralization, with the family and church providing order. Until that day comes, Reconstructionists believe the rights to home-school and to worship freely at least provide the barest conditions of liberty.


[-] 1 points by bensdad (8977) 12 years ago

A 1992 passage from the Ron Paul Political Report about the Los Angeles riots read, “Order was only restored in L.A. when it came time for the blacks to pick up their welfare checks.” In another newsletter asserted that people with AIDS should not be allowed to eat in restaurants because “AIDS can be transmitted by saliva”; in 1990 one of his publications criticized Ronald Reagan for having gone along with the creation of the federal holiday honoring the Rev. Dr. Martin Luther King Jr., which it called “Hate Whitey Day.”
Other issues of Paul’s newsletter called Barbara Jordan, the African-American Texas congresswoman, a “half-educated victimologist” and said of crime in Washington, D.C., “I think we can safely assume that 95 percent of black males in that city are semi-criminal or entirely criminal.”
If you have ever been robbed by a black teen-aged male, you know how unbelievably fleet-footed they can be." - Ron Paul, 1992
"Given the inefficiencies of what D.C. laughingly calls the `criminal justice system,' I think we can safely assume that 95 percent of the black males in that city are semi-criminal or entirely criminal." - Ron Paul, 1992
"We don't think a child of 13 should be held responsible as a man of 23. That's true for most people, but black males age 13 who have been raised on the streets and who have joined criminal gangs are as big, strong, tough, scary and culpable as any adult and should be treated as such." - Ron Paul, 1992
Paul’s newsletter was listed by a neo-Nazi group called Heritage Front, as recommended reading

The September 1994 issue of the Ron Paul Survival Report states that “those who don’t commit sodomy, who don’t get blood a transfusion, and who don’t swap needles, are virtually assured of not getting AIDS unless they are deliberately infected by a malicious gay.”
In the April 1993 Ron Paul Survival Report, the author--writing in the first person--states, “Whether [the 1993 World Trade Center bombing] was a setup by the Israeli Mossad, as a Jewish friend of mine suspects, or was truly a retaliation by the Islamic fundamentalists, matters little.” *...................................................................

[-] 1 points by PublicCurrency (1387) 12 years ago

Ron Paul supports competeing currencies . . Where is THAT in the Constitution ?

[-] 1 points by GirlFriday (17435) 12 years ago

loves me some Paul

Yep, well, you know, it is all about, creating something here.

Like a FEUDAL society.

[-] 1 points by anonwolf (279) from West Peoria, IL 12 years ago

Yep, neofeudalism.

[-] 1 points by FreedomIsFree (340) 12 years ago

How the F_ can the Fed do anything about jobs by giving trillions to the same folks I thought we were against?

Next you'll tell me Corzine is pure as the driven snow.

[-] 1 points by anonwolf (279) from West Peoria, IL 12 years ago
[-] 1 points by FreedomIsFree (340) 12 years ago

I read it but it feels like disinfo in a way. Probably not intentional, but my main source about day to day fed stuff is http://zerohedge.com so I'm likely smelling Krugman in this article.

[-] 0 points by PublicCurrency (1387) 12 years ago

One of the most important steps that we could take to bring prosperity back to America would be to nationalize the Federal Reserve. Doing so would allow the federal government to quit borrowing money, dramatically reduce taxes and eventually pay off the entire U.S. national debt. Instead of inheriting the largest debt in the history of the world, future generations would actually have a chance at economic prosperity because they would not be forced to pay off the horrific debt of previous generations. The Federal Reserve is a perpetual debt machine, it has almost completely destroyed the value of the U.S. dollar and it has an absolutely nightmarish track record of incompetence. There are no good reasons to keep the status quo. Our current debt-based monetary system will inevitably lead to a complete and total economic collapse. We desperately need to make a change while we still can.

A private central bank should not issue our currency, set interest rates and run our economy. Rather, we need to return control over the currency to the American people where it belongs.

The U.S. Constitution says that the federal government is the one that should be issuing our money.

In particular, according to Article I, Section 8 of the U.S. Constitution, it is the U.S. Congress that has been given the responsibility to “coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”.

Our current debt-based monetary system is a perpetual debt machine. It is absolutely imperative that we nationalize the Federal Reserve and begin to issue debt-free money.


[-] 0 points by ZenDogTroll (13032) from South Burlington, VT 12 years ago

those pesky goddamned repelicans . . . .

they want to privatize everything don't they

the fuckers

[-] 1 points by FreedomIsFree (340) 12 years ago

The Fed isn't already private? So far as I can tell, all the repubs but one just loves those banksters. Almost as much as dems.

[-] 1 points by anonwolf (279) from West Peoria, IL 12 years ago

And I think his main purpose is to pull them to the right.

[-] 0 points by FrogWithWings (1367) 12 years ago

The Federal Reserve has been privatized since the very first day these World Bankers were able to finally get their meat skinners around the throat of our nearly expired Republic.

You've obviously missed the group of Democrats jumping about the same, end the Fed train, as if the several unacounted (29ish...?) trillions they let fly to the board members personally owned banks wasn't enough that they should lose the private franchise and already be standing trial for treason? Did you miss that?

No? Doesn't matter? You'll always see all issues as either democratic or republican? If you ask me, such a view is pretty damned naive, if not fully delusional.

Furthermore, those wanting to end the Fed are not wanting to privatize it at all, they are wanting The People's government to take over the control of our nation's currency which is patently bootstrapped to it's laws.

You know, like stop the Fed as it never has been a Constitutional entity, and do it right again, like how it was done when our nation prospered and was still actually Sovereign, uncompromisable by multinational financial interests.