End the Fed instead of just firing the chairman

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End the Fed instead of just firing the chairman

For more than six months Pres­i­dent Trump has been very crit­i­cal of Fed­eral
Reserve Chair­man Pow­ell. A rapidly
sink­ing stock marked caused, in part, by eight inter­est rate increases since
the pres­i­dent took office, is at the root of the con­flict. Pres­i­dent Trump has report­edly expressed a desire
to fire the chair­man
. Abol­ish­ing the
entire Fed­eral Reserve would be far more ben­e­fi­cial to the Amer­i­can
people.

Peo­ple often won­der why both par­ents now have to work in order to make ends
meet, and still that often is not enough. They con­trast it with the way things
were for pre­vi­ous gen­er­a­tions. Infla­tion
caused by the Fed­eral Reserve often escapes the blame, even though it is directly
respon­si­ble for most of their finan­cial ills. This infla­tion
cal­cu­la­tion web­site
doc­u­ments the dras­tic drop in value of the dol­lar since
the Fed­eral Reserve was cre­ated in 1913

Accord­ing to the Bureau of Labor Sta­tis­tics con­sumer price index, prices in 2017 are 2,375.96% higher than prices in 1913. The dol­lar expe­ri­enced an aver­age infla­tion rate of 3.13% per year dur­ing this period.

In other words, $1 in 1913 is equiv­a­lent in pur­chas­ing power to $24.76 in 2017, a dif­fer­ence of $23.76 over 104 years.

Pro­gres­sives have often blamed Pres­i­dent Calvin Coolidge for
caus­ing the Great Depres­sion. This Foun­da­tion
for Eco­nomic Edu­ca­tion arti­cle
places the blame exactly where it belongs,
with the Fed­eral Reserve as the chief insti­ga­tor, rather than Pres­i­dent
Coolidge.

Should Coolidge get any of the blame for the Great Depres­sion? The Fed­eral Reserve’s expan­sion of money and credit in the 1920s cer­tainly set the coun­try up for at least a mild fall, but that wasn’t Coolidge’s fault. He saw the Fed as the “inde­pen­dent” entity it was sup­posed to be and didn’t med­dle with it. At least once he expressed con­cern that the Fed might be fos­ter­ing a bub­ble but he oth­er­wise didn’t make a stink about it. “Not my baili­wick,” he believed.

The next four quotes from the same arti­cle doc­u­ments the
dif­fer­ent blun­ders that led to the Great Depres­sion. As you can see, the
Fed­eral Reserve played a major role.

…far worse than the Fed’s infla­tion was its defla­tion, which didn’t begin in earnest until the final weeks of the Coolidge admin­is­tra­tion. After years of depress­ing inter­est rates arti­fi­cially with easy money, the Fed by early 1929 was jack­ing them up and chok­ing off money and credit. It con­tin­ued to do so by either delib­er­ate intent or actual effect for the next three years.

Every good econ­o­mist con­cedes that erratic mon­e­tary pol­icy at the Fed was at least a minor cause of the 1920s boom and surely a major cause of the 1930s bust. You can’t blame that on Coolidge. You should point the fig­ure at the mon­e­tary “cen­tral plan­ners” that pro­gres­sives empow­ered and told the rest of us we could put our trust in.

Even six months after the Octo­ber 1929 stock mar­ket crash, the econ­omy wasn’t yet in a deep funk. Mar­kets were, in fact, mak­ing a come­back in the spring of 1930 and unem­ploy­ment had not yet hit dou­ble dig­its. Not until June 1930, when Con­gress and Pres­i­dent Hoover raised tar­iffs and trig­gered an inter­na­tional trade war, did reces­sion cas­cade into depres­sion. Two years later, they flat­tened just about every­body who was still stand­ing by dou­bling the income tax.

In 1932, Franklin Roo­sevelt beat Hoover on a plat­form promis­ing less gov­ern­ment, not more. He then deliv­ered just the oppo­site when he got to the White House. His absurd inter­ven­tions kept the econ­omy in depres­sion for another seven years.

Thomas Sow­ell is often crit­i­cal of the Fed­eral Reserve. Here are quotes from this Jew­ish
World Review arti­cle

Dur­ing the first hun­dred years of the United States, there was no Fed­eral Reserve. Dur­ing the first one hun­dred and fifty years, the fed­eral gov­ern­ment did not engage in mas­sive inter­ven­tion when the econ­omy turned down.

No eco­nomic down­turn in all those years ever lasted as long as the Great Depres­sion of the 1930s, when both the Fed­eral Reserve and the admin­is­tra­tions of Hoover and of FDR intervened.

The myth that has come down to us says that the gov­ern­ment had to inter­vene when there was mass unem­ploy­ment in the 1930s. But the hard data show that there was no mass unem­ploy­ment until after the fed­eral gov­ern­ment inter­vened. Yet, once hav­ing inter­vened, it was polit­i­cally impos­si­ble to stop and let the econ­omy recover on its own. That was the fun­da­men­tal prob­lem then– and now.

Ron Paul is per­haps the most vocal critic of that unelected
body, which has been uncon­sti­tu­tion­ally granted far too much power and
author­ity over the entire United Sates econ­omy.
Here is what he had to say dur­ing the intro­duc­tion of the Abol­ish the
Fed­eral Reserve Act

From the Great Depres­sion, to the stagfla­tion of the sev­en­ties, to the burst of the dot­com bub­ble, every eco­nomic down­turn suf­fered by the coun­try over the last 80 years can be traced to Fed­eral Reserve pol­icy. The Fed has fol­lowed a con­sis­tent pol­icy of flood­ing the econ­omy with easy money, lead­ing to a mis­al­lo­ca­tion of resources and an arti­fi­cial “boom” fol­lowed by a reces­sion or depres­sion when the Fed-​created bub­ble bursts.

The founders of this nation were also very crit­i­cal of the
type of cen­tral bank­ing that the Fed­eral Reserve rep­re­sents. Here is an excerpt from a let­ter from Thomas Jef­fer­son to
John Tay­lor 1816

The sys­tem of bank­ing we have both equally and ever repro­bated. I con­tem­plate it as a blot left in all our con­sti­tu­tions, which, if not cov­ered, will end in their destruc­tion, which is already hit by the gam­blers in cor­rup­tion, and is sweep­ing away in its progress the for­tunes and morals of our cit­i­zens. Fund­ing I con­sider as lim­ited, right­fully, to a redemp­tion of the debt within the lives of a major­ity of the gen­er­a­tion con­tract­ing it…I sin­cerely believe, with you, that bank­ing estab­lish­ments are more dan­ger­ous than stand­ing armies; and that the prin­ci­ple of spend­ing money to be paid by pos­ter­ity, under the name of fund­ing, is but swin­dling futu­rity on a large scale.

The first steps in restor­ing our econ­omy are abol­ish­ing the
uncon­sti­tu­tional Fed­eral Reserve and return­ing to the gold standard.

For more than six months President Trump has been very critical of Federal Reserve Chairman Powell.   A rapidly sinking stock marked caused, in part, by eight interest rate increases since the president took office, is at the root of the conflict.  President Trump has reportedly expressed a desire to fire the chairman.  Abolishing the entire Federal Reserve would be far more beneficial to the American people. 

People often wonder why both parents now have to work in order to make ends meet, and still that often is not enough. They contrast it with the way things were for previous generations.  Inflation caused by the Federal Reserve often escapes the blame, even though it is directly responsible for most of their financial ills. This inflation calculation website documents the drastic drop in value of the dollar since the Federal Reserve was created in 1913

According to the Bureau of Labor Statistics consumer price index, prices in 2017 are 2,375.96% higher than prices in 1913. The dollar experienced an average inflation rate of 3.13% per year during this period.

In other words, $1 in 1913 is equivalent in purchasing power to $24.76 in 2017, a difference of $23.76 over 104 years.

Progressives have often blamed President Calvin Coolidge for causing the Great Depression. This Foundation for Economic Education article places the blame exactly where it belongs, with the Federal Reserve as the chief instigator, rather than President Coolidge.

Should Coolidge get any of the blame for the Great Depression? The Federal Reserve’s expansion of money and credit in the 1920s certainly set the country up for at least a mild fall, but that wasn’t Coolidge’s fault. He saw the Fed as the “independent” entity it was supposed to be and didn’t meddle with it. At least once he expressed concern that the Fed might be fostering a bubble but he otherwise didn’t make a stink about it. “Not my bailiwick,” he believed.

The next four quotes from the same article documents the different blunders that led to the Great Depression. As you can see, the Federal Reserve played a major role.

…far worse than the Fed’s inflation was its deflation, which didn’t begin in earnest until the final weeks of the Coolidge administration. After years of depressing interest rates artificially with easy money, the Fed by early 1929 was jacking them up and choking off money and credit. It continued to do so by either deliberate intent or actual effect for the next three years.

Every good economist concedes that erratic monetary policy at the Fed was at least a minor cause of the 1920s boom and surely a major cause of the 1930s bust. You can’t blame that on Coolidge. You should point the figure at the monetary “central planners” that progressives empowered and told the rest of us we could put our trust in.

Even six months after the October 1929 stock market crash, the economy wasn’t yet in a deep funk. Markets were, in fact, making a comeback in the spring of 1930 and unemployment had not yet hit double digits. Not until June 1930, when Congress and President Hoover raised tariffs and triggered an international trade war, did recession cascade into depression. Two years later, they flattened just about everybody who was still standing by doubling the income tax.

In 1932, Franklin Roosevelt beat Hoover on a platform promising less government, not more. He then delivered just the opposite when he got to the White House. His absurd interventions kept the economy in depression for another seven years.

Thomas Sowell is often critical of the Federal Reserve.  Here are quotes from this Jewish World Review article

During the first hundred years of the United States, there was no Federal Reserve. During the first one hundred and fifty years, the federal government did not engage in massive intervention when the economy turned down.

No economic downturn in all those years ever lasted as long as the Great Depression of the 1930s, when both the Federal Reserve and the administrations of Hoover and of FDR intervened.

The myth that has come down to us says that the government had to intervene when there was mass unemployment in the 1930s. But the hard data show that there was no mass unemployment until after the federal government intervened. Yet, once having intervened, it was politically impossible to stop and let the economy recover on its own. That was the fundamental problem then– and now.

Ron Paul is perhaps the most vocal critic of that unelected body, which has been unconstitutionally granted far too much power and authority over the entire United Sates economy.  Here is what he had to say during the introduction of the Abolish the Federal Reserve Act

From the Great Depression, to the stagflation of the seventies, to the burst of the dotcom bubble, every economic downturn suffered by the country over the last 80 years can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial “boom” followed by a recession or depression when the Fed-created bubble bursts.

The founders of this nation were also very critical of the type of central banking that the Federal Reserve represents.  Here is an excerpt from a letter from Thomas Jefferson to John Taylor 1816

The system of banking we have both equally and ever reprobated. I contemplate it as a blot left in all our constitutions, which, if not covered, will end in their destruction, which is already hit by the gamblers in corruption, and is sweeping away in its progress the fortunes and morals of our citizens. Funding I consider as limited, rightfully, to a redemption of the debt within the lives of a majority of the generation contracting it…I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.

The first steps in restoring our economy are abolishing the unconstitutional Federal Reserve and returning to the gold standard.