Review of Ron Paul's "End the Fed"

 I just submitted this piece to Mike Marnell's Lincoln Eagle. It may appear in the June or July issue.

Review: Ron Paul's End the Fed

Mitchell Langbert, Ph.D.*

Ron Paul, End The Fed.  New York: Grand Central Publishing. 2009. 212 pages.

"There was no food, however, in the whole region because the famine was severe; both Egypt and Canaan wasted away…They came to (Joseph)…and said, 'We cannot hide from our lord the fact that since our money is gone and our livestock belongs to you, there is nothing left for our lord except our bodies and or land. Why should we perish before your eyes…Buy us and our land in exchange for food, and we with our land will be in bondage to Pharaoh…and Joseph reduced the people to servitude, from one end of Egypt to the other." --Genesis 47: 13-22

            I have just finished Representative Ron Paul's End the Fed.  I consider it must reading for all Americans, but especially for Congressman Maurice Hinchey and most other local politicians, Democrats and Republicans alike. For a century American citizens have chosen, ostrich-like, to avoid discussion about the Federal Reserve Bank. Their head-in-the-sand attitude is encouraged by the legacy media, all of which is owned by interests beholden to Wall Street, which, along with commercial banks, government employees and big businesses benefit from the Federal Reserve Bank's redistribution of wealth from you to them.  The Fed does this by printing dollars, making yours worth less and soon, according to Representative Paul, worthless. 

            The fact is that the richer you are the more you benefit from the current Federal Reserve Bank system, and the media is indebted to the super-rich. George Soros, for instance, just gave funding to National Public Radio. Warren Buffett owns stakes in The Washington Post and Capital Cities ABC.  General Electric and Bill Gates own MS-NBC.  Sumner Redstone owns CBS. As far back as 1912, The New York Times silenced presidential candidate Robert M. La Follette when he publicly stated that the magazine industry, like the newspaper industry of the day, had fallen under Wall Street's editorial domination.  To this day the Ochs Sulzbergers, the inheritors of The Times who oppose inheritance for everyone else but have never opposed family trusts for the super-rich, are key apologists for the Federal Reserve Bank.

            In his book, Representative Paul makes clear why you should pay no attention whatsoever to the legacy media-- NPR, CBS, ABC, NBC, CNN, The New York Times, The Washington Post, or Newsmax.  The Federal Reserve Bank is the single most important story of today, yet none of the legacy media chooses to explain what it is doing to you financially.

            In a nutshell, the Federal Reserve prints money, uses it to buy bonds from commercial banks, which then expand the amount of money up to ten-fold and lend much of it to Wall Street, hedge funds, sub-prime real estate interests, big companies, and government. The last, in turn, subsidizes special interest lobbies like government employees, the Association of Trial Lawyers (now called the American Association for Justice), and the National Lawyers' Guild.   The economics profession gains considerable prestige and power from this arrangement, and has become a vested interest just like any other. Any economist who defends the Fed, and virtually all do, is part of the economic chicanery that is bringing America down.   

            The Fed has been badly managed, and in his book Representative Paul shows why.  Big, money center banks in New York City lend the Fed's counterfeit printed money to incompetently run Wall Street firms which invest it in bubble investments that make money in the short run but crash in the longer run. Then, rather than allow the badly run Wall Street firms to collapse, economists and the legacy media clamor for even bigger investments to the badly run firms in part at taxpayers' expense and in part through more counterfeit.  Although manipulative politicians like Representative Hinchey postured about the first bailout, they know that their interests coincide with Wall Street's, hedge fund managers' the super rich's and the National Lawyers' Guild's. The success of Representative Hinchey's favorite programs depends on Federal Reserve Bank credit expansion. Representative Hinchey would likely be poorer without the Fed.

            Where does the wealth come from which is allocated to Wall Street and Hinchey-style government mismanagement? It comes from you. The Congressman whom you have been electing has benefited from the Federal Reserve Bank's fraud for his entire career, most recently by voting against an audit Representative Paul proposed that would have required the Fed to show how much wealth it is diverting from your pocket via rising prices to firms like Mitsubishi Bank, Deutsche Bank, Citibank and other trans-national banks.  Americans' real (inflation-adjusted) hourly wage hasn't risen since 1970, but lots of money has been diverted to foreign banks and corporations.   You can see why Hinchey voted against an audit of the Fed. People who have nothing to hide hide nothing.

            So, Representative Paul concludes, the dollar is going to collapse, and that will make you worse off. It might throw you out of work, or it might cause a gradual or perhaps a rapid hyper-inflation that will reduce your standard of living.  The fault clearly rests with Congress, including your representative, Maurice Hinchey.  But how do you prepare for the coming economic decline for which Americans have voted?

            For me, there are three kinds of investments that make sense. I hope to eventually retire, not to make big money through speculation.  I don't recommend this for you; rather, you need to think for yourself.  In my case I am first gradually putting a large share of my savings in gold (GLD) and silver (SLV), 20 or 30 percent.  Second, I am taking a stake in other commodities, especially agriculture (DBA) and oil (DBO).  Third, for cash income I am buying high dividend yielding stocks such as Verizon (VZ) and Philip Morris (MO and PM).  If the dollar collapses, Philip Morris will still sell cigarettes.

            Congressman Ron Paul is pessimistic about the end result of the Federal Reserve Bank's policies. If you want to pretend that what we face today is business as usual, I will buy you a ticket to an ostrich farm I know of in Big Indian, and you can plan to retire there. Meanwhile, read Ron Paul's End the Fed and face the facts-- both parties have been complicit in wrecking the American way of life. Monetary debasement has accelerated and will eventually harm you. Currency collapses end freedom, what you know as the American way of life.  We are in the endgame now. There is nothing left for Soros, Buffett, Goldman Sachs, Ben Bernanke, Alan Greenspan and the American Association for Justice (what a laugh) to steal.  If you believe the legacy media you will get hurt.

 

*Mitchell Langbert is associate professor of business at Brooklyn College. He blogs at http://www.mitchell-langbert.blogspot.com

America's Media, Advocating a Suppressive Ideology, Is Pravda's Cousin

Don't confuse Pravda with Prada.  Pravda was the Soviet Union's newspaper, and its Orwellian name means  truth. Prada, in contrast, is the Prada family's fashion label. It was publicized by David Frankel's The Devil Wears Prada.

The American news media is Pravda's cousin, even while it writes about Prada.  Wall Street influences it as well as the federal government.  It is not that the United States has a Pravda-style state controlled media, it is that Wall Street influences the media, the government and the university system so that American political debate is monotone: "Bailout, bailout, bailout."  Progressivism, the variants of which are Rockefeller Republicanism and the Democratic Party's progressive-liberalism, is a totalitarian ideology that suppresses dissent in a more sophisticated way than the Soviets did. It permits but ignores dissent, suppressing dissenters through carrots such as academic jobs and sticks such as refusal to air dissidents' views.

Last night I was reading Robert McNamara's memoirs that focus on the Vietnam War, In Retrospect.  McNamara paints a picture of government decision making that ought to be of interest to organizational scholars.  He and his cabinet colleagues got strategy in Vietnam wrong because they were unable to think coherently. They reversed their assumptions in 1965 for no explainable reason.  Prior to 1965 they believed, for good reason, that the South Vietnamese had to fight the war.  In 1965 they took over the fighting for the South Vietnamese because the South Vietnamese would not fight, committing themselves to a conflict that would, in their own view, have the same ultimate outcome as retreat.   They themselves did not see their own strategy as leading to success.

According to McNamara, the cabinet's inability to think rationally about Vietnam was not due to the military's manipulation, as David Halberstam claims in The Best and the Brightest, and it wasn't due to groupthink as Irving Janis speculates in Groupthink.  Rather, it arose from inability to come up with an imaginative, effective strategy of the kind that Col. Thomas X. Hammes describes in The Sling and the Stone.  In other words, the decision making was a failure attributable to bounded rationality that James G. March and Herbert Simon describe in Organizations.

This explanation differs from any that appeared in the news media at the time and from any that appears in the news media today concerning government policy making. The federal government is unable to solve problems because it is corrupt and because it lacks the ability.  But progressivism is based on the assumption that government can solve problems.

News media personnel are educated in universities that respond to Wall Street's needs and then work in firms that Wall Street owns.  To advance they must please managements whom Wall Street hires.  The American news media, like Pravda, offers a steady stream of propaganda that defends the interests of a failed political establishment, a totalitarian state and a corrupt elite.