Bernanke is helping Ron Paul
USA Today did this writeup on an exchange (see link below) between my favorite Presidential candidate, Ron Paul, and Fed Chairman Ben Bernanke... and how this exchange has really taken hold of the internet with hundreds of thousands of views...
Texas Congressman Ron Paul is getting help from an improbable source in his long-shot bid for the Republican presidential nomination: Federal Reserve Chairman Ben Bernanke.
Video clips of Paul — who supports the gold standard and has sponsored a bill to abolish the Fed — ripping into Bernanke at congressional hearings are getting hundreds of thousands of hits on the video-sharing website YouTube.
If you watch the clip here, you'll see one of the characteristics that I appreciate about Congressman Paul... he takes a philosophical approach to public policy. He doesn't discuss "process" or other means to obfuscate his real concern.
Tim White
5 comments:
I'm an economics amateur, but I'm willing to learn. If we return to a gold standard, aren't we simply swapping one economic problem for another? Wasn't the reason we dropped the gold standard was to provide a greater flexibility to the currency supply and to reduce our dependence upon a single commodity who might come under the control of hostile interests?
Quod... first, in no way do I advocate eliminating the Fed. Truth is, I'm nowhere nearly well versed enough in central banking to support or oppose it... the point of this post was about him speaking to issues and not simply obfuscating or ignoring them.
Nonetheless, my sense is that the existence or elimination of a central bank is probably a zero-sum game. That is... there are pros and cons, either way.
Then there's the question...
is a return to gold standard the same as the elimination of a central bank? Again, I don't know.
But on the surface, a return to the gold standard makes sense to me. I think it would probably be a boost in confidence due to a reduction in the ability of bankers to "print" money.
Though, as you seem to point out, we could face another run on gold & silver as the Hunt brothers (??) did in the early 80s.
Bottom line though... I don't understand it well enough to argue this point.
One point that I firmly support though is that as long as a central bank exists, there should be greater transparency. I mean, why should someone like Bernanke or Greenspan's words "move markets?"
I think the Fed Board meetings should be open to the public. As far as I know, they're unelected (definitely) and unaccountable (they don't work for the President, I think)... so why should they wield so much power over America... all behind closed doors?
Here's today's press release from Ron Paul:
According to newly released figures, wholesale prices jumped by 3.2 percent in November. The increase represents the largest jump in 34 years.
“No other presidential candidate – Republican or Democrat – is talking about the crushing effect of higher prices on average Americans,” said campaign chairman Kent Snyder. “Dr. Paul knows what causes inflation, and he is the one presidential candidate who is giving us the answer.”
Republican presidential candidate and Texas Congressman Ron Paul is a recognized expert on monetary policy and a longtime critic of the Federal Reserve. He is the ranking member on the House Committee on Financial Services’ Subcommittee on Domestic and International Monetary Policy, Trade and Technology.
Actually the Federal Reserve and the Gold Standard are not directly related. The Fed was created in 1913 under President Wilson and the U.S. began going off the gold standard in 1933 under President Roosevelt. It was in part a response to the Depression when the hope that was by devaluing the currency, trade would expand.
the Federal Reserve and the Gold Standard are not directly related.
I agree. But my thought was... if we return to the gold standard, would it be a de facto death blow to the fed? Again... I don't know. But I imagine the gold standard would eliminate a great deal of their power to influence markets.
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