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Thread: TheHill - Ron Paul, the Federal Reserve and economic crashes

  1. #1

    TheHill - Ron Paul, the Federal Reserve and economic crashes

    Budowsky has been pretty fair thus far - measured (thoughtful) comments/rebuttals = warranted
    h xxp://thehill.com/blogs/pundits-blog/economy-a-budget/193103-ron-paul-the-federal-reserve-and-economic-crashes
    Ron Paul, the Federal Reserve and economic crashes
    By Brent Budowsky - 11/11/11 11:58 AM ET

    With Newt Gingrich, Rick Perry and almost the entire Republican Party now imitating Ron Paul on the matter of Federal Reserve policy, let me suggest where I think Dr. Paul is brilliantly right, where I think he is disastrously wrong, and why I believe there is now a substantial danger of a recession that could be more severe than 2007 and 2008.

    First, America and Europe are now repeating the policy mistakes of 1937 and imposing severe austerity at a time of economic slowdown that could drive Europe and the U.S. into a deep recession. I agree with Dr. Paul that the Fed should disclose far more; that there should be a significant audit of how the Fed has spent money; and that Fed policy has been radically tilted toward banks at the expense of individuals and small business. I also fear that Dr. Paul's idea of ending the Fed would guarantee a global recession and potentially a great depression.

    While I agree with Paul that Fed policy has been a disaster that has created huge monetary bubbles on assets ranging from oil and food to stocks and bonds, the solution is not to kill the Fed, or kill Fed assistance to the economy, but to moderate the Fed, and structure the assistance properly.

    Specifically, I would like to see the Fed finance the proposed infrastructure bank to create jobs in ways that pay for themselves, rather than pump even more money into the 1 percent at the top through various manipulations of bond markets.

    Fed policy under Bernanke has not been remotely Keynesian; it has been pure trickle-down. A multitrillion-dollar bailout that goes exclusively to the top 1 percent of bankers who then hoard the money against consumers and small businesses, and then use to money to fuel speculation and stock buybacks, has nothing to do with John Maynard Keynes. It is pure Herbert Hoover, though it’s wasted more money on bad policy than Hoover ever dared dream of.

    The Fed should end policies that pump up gold, oil, food commodities, wild speculation and ridiculous bubble moves up and down in stocks and commodities. On this Ron Paul has been brilliant, ahead of his time, and I have long agreed with him.

    However, with the executive branches impotent and unable to agree on any coherent policy, Dr. Paul is catastrophically wrong when he wants to remove the Fed and monetary policy itself from supporting the economy.

    What the Fed should do is reduce the net size of its monetary policy but target its actions to initiatives that more directly support jobs, housing and growth and not money-center bankers or Wall Street speculators.

    The European Commission now says that Europe could well be headed toward a recession that would be deep and severe.

    Christine Lagarde, director of the IMF, is now warning of a major slowdown that could affect Europe, the U.S. and Asia.

    The radical austerity being imposed in Europe will be disastrous and destabilizing and will drive Europe into a major recession that could well drive the U.S. into a new major recession.

    It is a historic disaster that neither the president, Republicans or Democrats in Congress nor the Fed are now advancing policies that could prevent the economic disaster that is now heading for our economy like the iceberg that awaited the Titanic.
    Last edited by sailingaway; 11-11-2011 at 02:00 PM.



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  3. #2
    " I also fear that Dr. Paul's idea of ending the Fed would guarantee a global recession and potentially a great depression."

    This is the problem with talking about end goals. People assume Ron would simply close the doors in one day and disrupt markets. Ron has given many interviews where he talked about the need to transition smoothly. HR 1098 is a good start.
    Last edited by Bern; 11-11-2011 at 11:34 AM.
    I compiled a "brief" history of events since October 2008 that are defining the global currency war and the role that gold is playing:

    Tin Foil Hats, Economic Reality and the Total Perspective Vortex

    Also, have you contacted your Congressional Rep and asked them co-sponsor Ron Paul's Rep. Paul Broun Jr.'s HR 1098 77: Free Competition in Currencies Act?

  4. #3
    Fair and Measured?

    He's the same tool that wrote this article.

    h xx://
    Last edited by sailingaway; 11-11-2011 at 02:00 PM.

  5. #4
    The comments are encouraging.

    What the Fed should do is reduce the net size of its monetary policy but target its actions to initiatives that more directly support jobs, housing and growth and not money-center bankers or Wall Street speculators.
    What Brent Budowsky fails to address here is that people who have not yet been affected negatively by Federal Reserve policy don't get it. The jobs are not coming back until the private sector is allowed to operate. Fed policy is tyrannical. Of course the power centers don't want to give-up their power. That's too damn bad. In the past it took guillotines. Hopefully, the people in America, in the 21st century, can regain control peacefully. Hopefully.
    "Everyone who believes in freedom must work diligently for sound money, fully redeemable. Nothing else is compatible with the humanitarian goals of peace and prosperity." -- Ron Paul

    Brother Jonathan

  6. #5
    Of course there would be a recession. If they did the right thing, we would have a brutally sharp recession while all of the debt is liquidated and prices collapse to their real values. Then when we hit bottom the economy would have a sound footing to start real growth again. That is the whole point. If they think they can put off "austerity" and keep the thing propped up, then they are the dangerous ones.

  7. #6
    Quote Originally Posted by The Gold Standard View Post
    Of course there would be a recession. If they did the right thing, we would have a brutally sharp recession while all of the debt is liquidated and prices collapse to their real values. Then when we hit bottom the economy would have a sound footing to start real growth again. That is the whole point. If they think they can put off "austerity" and keep the thing propped up, then they are the dangerous ones.
    my thought exactly. the question is - do you want a year's worth of pain, or decades?
    The bigger government gets, the smaller I wish it was.
    My new motto: More Love, Less Laws

  8. #7
    Fed policy under Bernanke has not been remotely Keynesian; it has been pure trickle-down.
    This guy is an idiot. Of course it's been Keynesian; it's been trickle-down as well! You can have a Keynesian economic plan with trickle-down policies. Trickle-down economics is all about *who* gets to benefit from the monetary policies enacted by the central bank, whereas Keynesianism proposes that public controls should be executed to "stabilize" the business cycle. It's not as if it's impossible to have both at the same time, and in this particular instance, that is precisely what is happening.

  9. #8
    Quote Originally Posted by Travlyr View Post
    The comments are encouraging.
    I thought so too! I think it shows that alot of people don't just swallow what they read as fact and that there are ALOT of Ron Paul supporters out there! Probably more than we think!
    Experience teaches us that it is much easier to prevent an enemy from posting themselves than it is to dislodge them after they have got possession.
    ~ George Washington



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  11. #9
    However, with the executive branches impotent and unable to agree on any coherent policy, Dr. Paul is catastrophically wrong when he wants to remove the Fed and monetary policy itself from supporting the economy.

    What the Fed should do is reduce the net size of its monetary policy but target its actions to initiatives that more directly support jobs, housing and growth and not money-center bankers or Wall Street speculators.
    As is often the case, he accurately identifies some problems. Unfortunately his solutions are more of the same. From the quote above, it appears he believes in central economic planning. Ron Paul does not. So his solution is to continue central planning, but he just wants it to be "better" central planning. Sorry buddy, we probably have the best central planning that is humanly possible, and as always, it has failed.
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul
    They are what they hate. - B4L


    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  12. #10
    Quote Originally Posted by revgen View Post
    Fair and Measured?

    He's the same tool that wrote this article.
    DOH! I totally forgot the sarcasm tags.

    Unleash the beasts!
    Last edited by sailingaway; 11-11-2011 at 02:00 PM.

  13. #11
    Quote Originally Posted by Bern View Post
    " I also fear that Dr. Paul's idea of ending the Fed would guarantee a global recession and potentially a great depression."

    This is the problem with talking about end goals. People assume Ron would simply close the doors in one day and disrupt markets. Ron has given many interviews where he talked about the need to transition smoothly. HR 1098 is a good start.
    I picked up on this also. It would be a gradual move towards competing currencies first. Also the author is wrong about the fed proping up gold. The contrary is true. They have been manipulating gold prices to keep them down.

  14. #12
    I haven't been to the site, but I really don't know why people are digging this article. He's completely wrong.

    I also fear that Dr. Paul's idea of ending the Fed would guarantee a global recession and potentially a great depression.
    No, sorry, he's explained this about ten thousand times. He wouldn't do it immediately. He'd get rid of it through attrition and competing currencies.

    the solution is not to kill the Fed, or kill Fed assistance to the economy, but to moderate the Fed, and structure the assistance properly.
    Oh, wrong again. Sorry. The FED has far too much power, and is too easily corruptible. Booms and busts would still happen, because no one can see far enough into the future to be able to accurately determine how much money needs to be in the economy.

    Specifically, I would like to see the Fed finance the proposed infrastructure bank to create jobs in ways that pay for themselves, rather than pump even more money into the 1 percent at the top through various manipulations of bond markets.
    That's because you're a dumbass. Banks don't create wealth, they seize it. The FED can't do anything that "pays for itself".

    Fed policy under Bernanke has not been remotely Keynesian; it has been pure trickle-down.
    Bet you thought you were clever using the word "Keynsian", didn't you? Too bad they're the same thing in our current economy. You can have both going at the same time.

    The Fed should end policies that pump up gold, oil, food commodities, wild speculation and ridiculous bubble moves up and down in stocks and commodities. On this Ron Paul has been brilliant, ahead of his time, and I have long agreed with him.
    Could have stopped at the word 'end'.

    What the Fed should do is reduce the net size of its monetary policy but target its actions to initiatives that more directly support jobs, housing and growth and not money-center bankers or Wall Street speculators.
    The FED artificially deflating the money supply is just as bad as it inflating it. Booms and busts.

    The radical austerity being imposed in Europe will be disastrous and destabilizing and will drive Europe into a major recession that could well drive the U.S. into a new major recession.
    And that, kids, is what we call a market correction.

    Thanks for playing, but next time, choose to challenge a candidate that you're more intellectually on the level of. I'd propose Cain.



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