End the Fed part 3

Maybe the biggest question is “what caused the meltdown that is occurring now?” Ron Paul explains that the trail can be followed back to 2001 when interest rates were kept low to forestall a recession. Greenspan slashed rates from 6.5% in 2001 to 1% in 2003. Paul says, “Everyone in those days was consumed by the drive to not let the terrorists win. Well, the Fed assisted in undermining the foundation of the structure of the American economy and, in the long run, did more damage to economic prosperity than the attacks of 9/11.” He says that the risk of recession, by providing an artificial stimulus was the wrong move, meanwhile, it was the perfect opportunity to set things right and put the economy back on a firm setting, because they could implemented responsible monetary policy, not emotional policy.

Paul argues that most people in Washington simply don’t understand the complex structure of the economy and the American economic system. He tells a story about when he was approached by a member and asked if the US was still on the gold standard. These are the people elected! Some understand the system, but don’t want the truth out that the fiat system primarily benefits big government, big corporations, and big banks. But, if there are people who don’t know, then there are people who know. Paul again brings up the Austrian Economists (see part 1). He says that the economists knew, in 1914, that the structure would not last and predicted its downfall, eventually; that was the beginning of the end of the fiat money system.

I would like to think of this next part as a foundation for philosophy. In reading about superheros, one wonders why they do what they do? Think of Captain America. He has all that power, why does he chose to do what he does? During the Marvel Civil War, there was a law passed that made it a crime to fight and not be registered with the government. Captain fought for the rights of anonymity and againts superhero registration; he fought and against Iron Man. Eventually Capt. turned himself in to face trial for treason because he knew the war was causing harm to people and he decided to pay the consequences of his decision to fight against the law. It is a very interesting story and it shows the depth of comic writing. Anyways, I digress...

About the current mess, Paul writes that “in a structured social-welfare interventionist state, no one become solely responsible for his or her actions.” When did it turn out like this? At the end of Civil War, Captain America is...(don’t read on if you want to read it yourself and skip the next paragraph)... assassinated. I think the death of Captain America shows something about the nature and character of current America. Have we lost are way?

Rand’s objectivism states that the free-market system will keep things like our current mess from occurring. The market is a natural system that responds to the environment and corrects itself. When a person is on drugs, they do not respond appropriately to situations. The rationale fades, mood swings occur, basically they do not normal and the problem usually escalates and gets worse. The Fed gave the free-market a lot of “drugs” and basically its response was based on delusions. The problem is that we are the victims of the Fed’s choices. The economy of America was propped up by the decisions of one group who feels that they have a infinite revenue source (America Taxpayers).

Paul writes emphatically, “Moral hazard breeds dependency, neglect, and sacrifice of liberty, tolerance of false monetary doctrines, and promises of wealth without work.” I have learned early on that work is the one thing that can get a person somewhere. It is the most fundamental of American principles. Paul continues, “Paper money advocates make promises to the masses in order to appease them, ...and bring paradise to the world.”

If you wondered how central banking, artificial interest rates, and government creates this, Paul explains that, “artificially low interest rates are achieved by inflating the money supply, and they penalize the thrifty and cheat those who save. They promote consumption and borrowing over savings and investing. Manipulating interest rates is an immoral act. It’s economically destructive.” Who would have thought that economics had a moral component? When the outcomes affect people, I guess they do.

He explains that the market depends on information and when it manipulated, the information is not correct. He argues that price-fixing the basic job of a central banking system and is essentially a form of socialism. He responds to those that say that: the free-market is to blame for this current situation, is that the truth is that: the market wasn’t free, its been manipulated for the aggrandizement of the politicians. He states that free markets create sound money and have low rates as a consequence. The difference is that the low rates are real and aren’t an illusion created from a bubble.

The act of acting morally and righteously has the unfortunate reality of affecting some negatively. A truly responsible person does the right thing regardless of the consequences or the public perception. Hopefully the outcomes are good, but sometimes they are not. Captain America took the consequence of imprisonment for his conduct, Socrates accepted his consequence too. How come John Edwards and others from his moral-type cannot understand that actions have consequences and that ‘responsibility’ is not just a word that people use; but live by? I think a piece of America has died. The good thing is that the missing piece of our America can come back, but it takes the individual to be responsible. They also have to hold others accountable for their actions. Sometimes we just have to pay the price for fighting the good fight. I think we can all learn a little something about moral structure from superheros.

End the Fed part 4

I think Ron Paul’s position is elocuted clearly by his writing,he stated that “The Federal Reserve should be abolished because it is immoral, unconstitutional, impractical, and promotes bad economics, and undermines liberty. Its destructive nature makes it a tool for tyrannical government.” I have always been into punk rock and tried to follow the principles of Rock and Roll. Looking at the leaders of rock and roll now, you see right away they are spineless. If I learned anything from “Salt Lake City Punk”, it is that the true punk rocker and idealist is not a mindless, follow the trends liberal, it is an intellectual who is learned and well-read about ideas and strictly adheres to evidence. It seems to me that the Bonos, the Stings, the Oprahs, and the any other “do gooding” media hounds try to say that they are novel and follow a worth-while cause. But they really just follow play books on what is considered right and viewer-friendly. The true path makers are Ron Paul and others like him (most seem to follow the libertarian persuasion). These are people who don’t make decisions based on how many people are positively affected or how many people think it is a good idea. They follow ideas because of the idea, totally removed from the human element. I like this process of decision making; it is the most scientific (I think Galileo would concur). The idea works regardless if you like it or not.

Ron Paul Describes how the Byzantine empire fell because Nicephorous III Botaniates devalued their gold reserves during a war with the Turks. They lost and so did the most widely used coin of 1071. Paul claims that it is the responsibility of the government to enforce proper policies that allow the progress of a nation. A strong economy has been the integral factor into the definition of a strong nation. The current Fed policies have created this situation, in his opinion.

I understand his opinion about the cause of the financial meltdown, especially when Lenin has said that “...the best way to destroy the capitalist system was to debauch the currency. By continuing processes of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of its citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of law on the side of destruction, and it does it in a manner which one man in a million is able to diagnose.” (pg. 171)

Paul writes many reasons why the Fed is bad. He has philosophical reason (immortally), a constitutional reason (interpretation of “paper money”, a Hamilton vs. Jefferson dilemma), an economical reason (the instability of fiat money), and a libertarian reason (how money= freedom and personal liberty). He is only one voice of many. Just like any good question, as in philosophy, there are a myriad of answers. Philosophy would be boring and dead, like Latin, if the answer was so apparent.

Philosophy has brought us many things. Many times there are explanations that fit perspective. Aristotle explained the motion of things as: things moved to fulfill their purpose, i.e. smoke belongs in heaven, so it rises, or a stone, which is earth, falls to the earth when dropped. People liked this idea because it was simple and observable. People intuitively understand that things have a purpose and it is our duty to fulfill them. That was an accepted explanation of the motion of things and motivated people for a long time.

Galileo came along and changed that idea. He describes motion in a “cause and effect” way. He basically said that matter moves when it is affected by another piece of matter or physical body. He explained the observed motion of things as a causal relationship. His explanation motivated and proved successful.

Now, who really is right? Well, it is a matter of perspective; some people are happy with a purposeless world, others are not. I think it is a matter of ideas and how people use their ideas. Descartes had a criterion for the truth value of ideas. It is usually referred to the “clear and distinct criterion”. Basically he claims that ideas that are clear and distinct are true. He is famous for the “cogito” mantra; “I think therefore I am” illustrates that rationale.

Some things are clear and distinct, some aren’t. Is the Fed responsible for this mess or is the blame some place else? Paul claims one side and lays out an emphatic argument for his case. Is our current system bad? Defalcation does occur in our system, but that is because citizens have ceased holding politicians responsible for the decisions, good or bad.

What I think should come out of this is that people live the vision that Jefferson wanted for America; to live free and be able to make informed decisions. He wanted a responsible government that was limited. We sort of let government get out of control. In California, the will of the people is very limited; the government, unions, and state bureaucracies control every entity of government and business. It is the fault of the citizenry for letting the power slip away from them. We, as people need to ask the tough questions of politicians. What do you think about X, Y, and Z. Weather X, Y, and Z be economics, immigration, gay marriage, or cigarette taxes. We blame others for not being responsible, we need to be responsible and live the life that Captain America fought and died for.