Ownership of the Federal Reserve Bank

An anonymous poster asked me about the ownership of the Federal Reserve Bank and without doing a lot of research I found an interesting post by Professor Edward Flaherty of the University of Charleston.  Flaherty debunks the claim that foreigners or the Rothschilds control the Fed. That is silly.  But equally silly is Flaherty's claim in the following sentence:

"The New York Federal Reserve district contains over 1,000 member banks, so it is highly unlikely that even the largest and most powerful banks would be able to coerce so many smaller ones to vote in a particular manner. To control the vote of a majority of member banks would mean acquiring a controlling interest in about 500 member banks of the New York district. Such an expenditure would require an outlay in the hundreds of billions of dollars. Surely there is a cheaper path to global domination."

While coercion is a loaded term, Flaherty displays a lack of understanding of basic political and interest group processes.  Typically, democratic processes yield a small number of controlling or influential parties.  Robert Michels first called this process the iron law of oligarchy in a book on political parties (specifically the Socialist Party of Germany, which at the time was considered highly democratic) and it has been examined by Mancur Olson on the public policy level in his book Rise and Decline of Nations.  


While it is silly to claim that the Rothschilds or some cabal of Jewish or British bankers controls the Fed, it is equally silly to claim that the big money center banks do not influence monetary policy.  Since 2008 we have witnessed Goldman Sachs largely dictate national spending policies.  Flaherty's claim that ordinary political processes do not apply and that the large banks lack influence on the nation's monetary policy, given the trillions of dollars just printed and handed to them, is wrong. 


Monetary policy favors the commercial banks and by definition the big commercial banks get the most juice from the Fed's monetary expansion.  That doesn't mean that there's a conspiracy of international bankers, Jewish, British or otherwise, nor does it mean that there is a a conspiracy of big US banks.  It just means that money center banks control a disproportionate share of a monetary system that is designed to subsidize banks in general. The bigger banks benefit more than do the smaller banks, and they do more damage because they tend to be more speculative. The Mexican and Latin American debt crisis; the Hunt silver speculation; Enron; Long Term Capital Management; and the sub-prime crisis as well as the century old merger mania that has reduced American business's creativity are all due to the money center banks.

The banks and financial interests benefit and you lose. That is built into the system that American voters have supported.  If you insist on voting for one of the two major parties every time, you are supporting the system.  Voters have themselves to blame, not a conspiracy. 

Zeitgeist--the Movie

I noticed this five-part video on Youtube and embedded it below. It is about 65% accurate, which makes it 65 times more useful than anything you will seen on television news this year.  Rather than take facts from the movie, use it to stimulate reading.  Much of what's in the videos won't be supported by more detailed research.

I don't like the conspiracy theory aspects of these films and wish the implication that 9/11 was a Rockefeller conspiracy had been omitted. That's emabarrasingly absurd.  It is untrue that Robert McNamara said that the Golf of Tonkin attacks "never happened" or were a "mistake". He said that one of them occurred and one of them didn't. You can see this in the 2003 movie/interview Fog of War. There are numerous other mistakes. As well, I found the fifth part to be ridiculous.  Love as a political tactic is fine, but if the public cannot figure out that the Fed is destroying their future I'm not sure what deciding "life is a ride" will accomplish. That said, the movie does open your eyes.

Much of the history is useful, such as the discussion of  Prescott Bush's involvement with the Union Bank and the Nazis and the background of the Fed. Some interesting quotes from Woodrow Wilson are included.  The stuff about chip implants is worth watching.  The comments about the education system's serving as a counterpart to inculcated stupidity via mass media are spot on.


At first I liked the Patriot Act.  Now I don't.  Although I reject conspiracy-based theories I am convinced that government uses war to curtail civil liberties and that this has occurred in the past ten years.  I also see both the Democratic and Republican Parties as well as Congress, the President and the US Supreme Court as threats to my well being that exceed the threats that terrorists pose.  Which is not to say that terrorists don't exist or that they are a figment of Nick Rockefeller's imagination.  But Washington must not be permitted to accumulate power by using terrorism as an excuse.

It is unfortunate that opponents of the Fed fail to follow the KISS strategy--keep it simple, stupid. Occam's Razor is a guide.  That is, the simplest explanation is the best:  "plurality should not be posited without necessity."  Conspiracy theories fail the KISS and Occam's Razor standards and should be chucked.  

Has the Tea Party Become a Drag?

I just submitted this post at the RLC website:

I was reviewing Sarah Palin’s speech at the Tea Party convention on Youtube and was reminded of her position on the 2008 bailout. In a September 24, 2008 television interview Palin supported the bailout. But at the recent Tea Party convention she objected to bonuses that the support she had previously advocated made possible. I think the expression is that she has been shedding conservative crocodile tears.

Conservatives love to hate Saul Alinsky but in fact all activists, conservative, libertarian or left-wing, follow his advice if they aim to succeed. One of Alinsky’s rules for radicals is that a tactic that drags on too long becomes a drag. This seems to be occurring with the Tea Party.

A reader suggested this blog by the Alantic Magazine’s Andrew Sullivan. Sullivan argues that the Tea Party convention was not economically conservative but was rather dominated by Christian activists. Sullivan writes:

“They have no plans to cut serious spending whatsoever. They love their Medicare, as they screamed at us last August. Do you remember them revolting against Bush’s unfunded, Medicare prescription drug bill, the worst act of fiscal vandalism since the Iraq war?”

I have attended my local Tea Party meeting in Kingston, New York. I do recall others, besides myself, talking about economic issues. One individual brought up the exit of manufacturing from the US, another talked about corruption in government. There are frequent references to the nation becoming worse for future generations. These are all good signs and say to me that the Tea Party has potential left.

Since the Atlantic is not a libertarian source (disclaimer: I read it regularly more than a quarter century ago and not since) my gut would be suspicious of anything its writers have to say about the Tea Party. However, Sullivan makes a good point.

It was obvious from the beginning that the Tea Party rank and file is largely inexperienced. Moreover, these are people who have developed a bad habit of voting for big government candidates who say that they are for small government. They did it for George W. Bush and they did it for George H. Bush. They nominated John McCain, who lept at the bailout like a terrier at a steak, along with Palin and Obama. The Tea Party people realize that something has gone wrong after decades of their de facto support for big government and their solution is…to do the same thing once again. This is seen in their decision to ask John McCain’s running mate, Sarah Palin, to be the keynote speaker at their convention. Palin may speak economic conservative rhetoric at times, but she is not schooled in basic economics and can be seen in the September 2008 interview to be in the Progressive tradition.

I believe that libertarians need to work with the Christian right. However, we have been hammered once before, with respect to George W. Bush. The tactic of working with the Tea Party has helped expose our views, and it has been successful. But should libertarians continue to support the Tea Party? I am not certain that the leadership of the Tea Party supports our mission of limited government. Sarah Palin does not. I don’t think she understands that government activism in the bailout is logically inconsistent with support for limited government. The Tea Party may soon become a drag.