Time To Put An End To The Federal Reserve
I've been digging in and reading as much material as I can on the Federal Reserve. What peaked my interest was when Sen. Ron Paul asked for an audit and the response from members of the Fed and T Gietner's staff was nothing more than insults directed at the Senator.
As you can see in the short clip above, the Federal Reserve's impact has had just the opposit affect of what it was intended to accomplish.
Remember too that it was the Federal Reserve that created to "Too Big To Fail" situation.
I don't blame you. I blame bad policy. I blame the interventionists. I blame the neoconservatives who preach this stuff, who believe in it like a religion -- that they have to promote American goodness even if you have to bomb and kill people. In short, I donít blame America; I blame neocons." ó Ron Paul
How do you figure that. Honestly the first decade or so the Fed made some big mistakes, but that was because they didn't have the tools or the data we have now. You also can't just say look at the fix we are in now". The Fed cannot fix all bad behavior or over spending by the government and private sector. All they can do is stabilize the markets and they have done that. Look at the markets from 1800-1913. They were a mess. They have 5 different depressions nearly the size of the great depression. Since the great depression however things have really improved. Over time the deviation in inflation has been consistently shrinking, markets have stabilized, the banking sector is so much better.
Recently, a majority of economist would say the fed has helped stabilize the economy. Through TARP and new bank regulation. The reason things are still bad now has little to do with financial markets. Now the problem is that the US economy doesn't have a bubble to live off of and we are coming to realize that we have lost many of our competitive edges. these are long term issue. Wall street has it's issue but getting rid of the fed would be stupid I think. I like Ron Paul but he is a little bit crazy.
Yes there are 10-20 banks that are too big to fail. However, that whole argument that it encourages too much risk don't make sense. Who are the decision-makers in a bank. The stockholders and the senior leadership right? What happens if the bank gets in trouble? Yes, if needed the fed will come in and save the bank but they only save the infrastructure of the bank. In all the major banks that got in deep trouble the CEOs lost their jobs and the stock holders took a bath. So the people that make the decisions have no protection, thus no incentive to take excess risk. Well except for Goldman which is a whole different story and stinks if you ask me.
Last edited by Nate_C; 03-14-2011 at 11:34 PM.