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Ron Paul: New Fed Boss “Same As The Old Boss”

The news that Janet Yellen was nominated to become the next Chairman of the Board of Governors of the Federal Reserve System was greeted with joy by financial markets and the financial press. Wall Street saw Yellen’s nomination as a harbinger of continued easy money. Contrast this with the hand-wringing…

The news that Janet Yellen was nominated to become the next Chairman of the Board of Governors of the Federal Reserve System was greeted with joy by financial markets and the financial press. Wall Street saw Yellen’s nomination as a harbinger of continued easy money. Contrast this with the hand-wringing that took place when Larry Summers’ name was still in the running. Pundits worried that Summers would be too cautious, too hawkish on inflation, or too close to big banks.

The reality is that there wouldn’t have been a dime’s worth of difference between Yellen’s and Summers’ monetary policy. No matter who is at the top, the conduct of monetary policy will be largely unchanged: large-scale money printing to bail out big banks. There may be some fiddling around the edges, but any monetary policy changes will be in style only, not in substance.

Yellen, like Bernanke, Summers, and everyone else within the Fed’s orbit, believes in Keynesian economics. To economists of Yellen’s persuasion, the solution to recession is to stimulate spending by creating more money. Wall Street need not worry about tapering of the Fed’s massive program of quantitative easing under Yellen’s reign. If anything, the Fed’s trillion dollars of yearly money creation may even increase.

What is obvious to most people not captured by the system is that the Fed’s loose monetary policy was the root cause of the current financial crisis. Just like the Great Depression, the stagflation of the 1970s, and every other recession of the past century, the current crisis resulted from the creation of money and credit by the Federal Reserve, which led to unsustainable economic booms.

Rather than allowing the malinvestments and bad debts caused by its money creation to liquidate, the Fed continually tries to prop them up. It pumps more and more money into the system, piling debt on top of debt on top of debt. Yellen will continue along those lines, and she might even end up being Ben Bernanke on steroids.

To Yellen, the booms and bust of the business cycle are random, unforeseen events that take place just because. The possibility that the Fed itself could be responsible for the booms and busts of the business cycle would never enter her head. Nor would such thoughts cross the minds of the hundreds of economists employed by the Fed. They will continue to think the same way they have for decades, interpreting economic data and market performance through the same distorted Keynesian lens, and advocating for the same flawed policies over and over.

As a result, the American people will continue to suffer decreases in the purchasing power of the dollar and a diminished standard of living. The phony recovery we find ourselves in is only due to the Fed’s easy money policies. But the Fed cannot continue to purchase trillions of dollars of assets forever. Quantitative easing must end sometime, and at that point the economy will face the prospect of rising interest rates, mountains of bad debt and malinvested resources, and a Federal Reserve which holds several trillion dollars of worthless bonds.

The future of the U.S. economy with Chairman Yellen at the helm is grim indeed, which provides all the more reason to end our system of central economic planning by getting rid of the Federal Reserve entirely. Ripping off the bandage may hurt some in the short run, but in the long term everyone will be better off. Anyway, most of this pain will be borne by the politicians, big banks, and other special interests who profit from the current system. Ending this current system of crony capitalism and moving to sound money and free markets is the only way to return to economic prosperity and a vibrant middle class.

ron paul

Ron Paul is a former U.S. Congressman from Texas and the leader of the pro-liberty, pro-free market movement in the United States. His weekly column – reprinted with permission – can be found here.

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33 comments

tomstickler October 13, 2013 at 2:06 pm

Still has no clue about the Fed’s mission.

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Centrist View October 13, 2013 at 4:04 pm

The NY Fed made a comic book about it.

The Story of the Federal Reserve System
http://www.newyorkfed.org/education/addpub/Comic_FRS.pdf

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Frank Pytel October 13, 2013 at 6:06 pm

Hey, download links screw up my por… Uh download qouta. Weiner.

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A Comic book? October 14, 2013 at 9:32 am

“The NY Fed made a comic book about it.”

I thought that you were joking at first. Then I realized that there are no bounds of decency when it comes to spending a combination of taxpayer money and money created from nothing when it comes to those that are helping to take/create it.(naturally)

The idea that the Fed, which identifies itself as a “governmental entity” yet also “independent” feels the need to create a comic book to educate “the people” on what it does tells you exactly what they think of those very people.

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Frank Pytel October 13, 2013 at 6:04 pm

Mr. Paul knows ecactly what the feds mission is. Keep the rich rich enough to keep, not the poor but, the lemmings happy.

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MashPotato October 13, 2013 at 2:56 pm

The MSM echo chamber will herald Yellen’s chairmanship as a victory for gender equality. But the same regressive inflation tax will continue to erode the real value of your savings.

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Frank Pytel October 13, 2013 at 6:00 pm

Yeah, but but but stocks, the stocks??? Stocks are up, right? Fed is good, right. But but???? #ObamaFailsAgain

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SCBlues October 13, 2013 at 3:40 pm

New Ron Paul still the same as the Old Ron Paul. Still a Fraud.
Do people really care what Ron Paul thinks? I mean that Revolution was such a success . . . how many times did he run for POTUS? How many times was he even a factor? How much money did all of those Paulies throw at his campaigns?

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CNSYD October 13, 2013 at 5:24 pm

Wonder what the per vote donation average was.

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Frank Pytel October 13, 2013 at 6:01 pm

You will never have that many tip jars.

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Frank Pytel October 13, 2013 at 6:15 pm

Seriously. I’ve seen you bag paul countless times, with absolutely zero to say that is reasonable at attacking his beliefs or character. I get in those moods as well, but generally come around and exact vengeance via strong unassailable fact. So please, enlighten us. Mr. Paul is Jefferson incarnate. Were I buddhist or Hindi I would no longer be at ??church?? Ild be in Texas, with the balance of this planets sane citizenry. So please. Enlighten at least me

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SCBlues October 13, 2013 at 9:54 pm

I think Paul is a fraud as he presents himself as such a big libertarian and also such a big Libertarian (notice the little L and big L). One needs to look no further than his position on abortion to see what a fraud he is in both respects. And I know – I’ll again be called every name in the book by the Paulies as I have been before on this site – go ahead – I find it amusing. As amusing as I find the little nut, Rand. I mentioned before about wondering how much the Paulies had given to his many failed POTUS campaigns – actually, I bet it is not much. Their allegiance to the Revolution probably goes no further than those fading “Join the Ron Paul Revolution” bumper stickers and perhaps some noisy clamor on blogs. Frank – I think Texas suits you – and needs you – I have no doubt that you would fit right in. And if they follow through on one of their many threats to secede, well, guess you’d be a happy camper. Guess I’ll just stick around and support the good old USA – but don’t let the door hit you on the way out . . . “sane citizenry” indeed.
You may now consider yourself enlightened, Frank!

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A correction October 13, 2013 at 10:17 pm

“I think Paul is a fraud as he presents himself as such a big libertarian
and also such a big Libertarian (notice the little L and big L). One
needs to look no further than his position on abortion to see what a
fraud he is in both respects.”

Actually, the issue of abortion is still one debated within the little “L” community on the basis that it violates the non aggression principle.

Carry on.

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TontoBubbaGoldstein October 13, 2013 at 10:54 pm

How much money did all of those Paulies throw at his campaigns?

For the record, TBG self identifies as a “Ronulan”, not a “Paulie”.

TBG is too lazy to GOOGLE it, but will wager that the GOPers spent exponentially more on the Romney and McCain campaigns, with *coughs* the same result.

Also, TBG believes that Ron Paul’s “rEVOLution” has been a positive influence on our politics. TBG credits it with influencing the 80% of the population that were against Obama/Graham/McCain’s bipartisan Syrian warmongering, for one example.

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Frank Pytel October 14, 2013 at 2:55 am

Finally something coherent. He ran for president too many times, and his position on abortion. Hmmmm.

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trem jim October 14, 2013 at 10:05 am

U socialist pussy your as sheepled as they get . The world is laughing at you kid hah

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efjfdjddfeggfv43 October 22, 2013 at 9:24 pm

James Tremaglio?? it can’t be…

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trem jim October 25, 2013 at 8:48 am

???

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efjfdjddfeggfv43 October 25, 2013 at 12:54 pm

is that you? lol

trem jim October 25, 2013 at 5:37 pm

this is who ?

efjfdjddfeggfv43 October 26, 2013 at 6:33 pm

Jim B… maybe that dunkin donuts coffee you threw in my face before you cracked me in the face back in middle school will help you remember better

trem jim October 27, 2013 at 2:17 pm

lol damn that was like almost 10 years ago

trem jim October 28, 2013 at 5:14 am

is this pat ? lol

efjfdjddfeggfv43 October 28, 2013 at 7:45 pm

HAHAHAHAh how’d you know??!! I just like f**ckinggg with people on here and came across your name and didn’t think he could really be you! lol

trem jim October 29, 2013 at 5:21 am

lol ya I just get bored man , lot of retards on these posts . ur profile invisible but it still says ur name on top . I thought Jim B was like stalkin me or some shit haha that be funny . hmu next weeken or something man

trem jim October 28, 2013 at 5:15 am

pat I just like to get high and yell at people about politics u kno that lol , hmu tho man

idcydm October 13, 2013 at 6:06 pm

Love him or hate him, he doesn’t care about polls and you know where he stands, which is more than I can say for most politicians.

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Frank Pytel October 13, 2013 at 6:07 pm

Than all other politicians. XP Stupid spell check. WTF is a pititician

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Frank Pytel October 13, 2013 at 6:27 pm

Its trully frightening that so many, here and elsewhere, have little to zero comprehension regarding the balance sheet the fed has created. Further that said balance is a part of our national debt, but not a part of the 17+/-T you read about on the various news outlets. Even FitsNews merely regurgitates that figure (no disrespect.).

#SocietyFailsAgain

Shit

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Frank's Mama October 13, 2013 at 9:42 pm

Most of them have a clearer understanding than you, Frankie.

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Smirks October 13, 2013 at 9:08 pm

The Fed serves who it serves well, it just doesn’t serve the American people. Neither party has thus far showed enough interest in changing how it runs. At this point, what happens happens.

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hack October 14, 2013 at 9:31 am

So we will have two historical firsts overseeing the collapse of the imperium: Barry the affirmative action Ivy Leaguer, and Yellen the first woman to helm the SS Federal Reserve. What fitting irony to show that mandating eqaulity can’t change reality.

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Donald Dimmick October 14, 2013 at 11:10 pm

There is one dictator in the world who is more powerful than all other dictators in the world: Money.

While I would love to ‘End the Fed,’ I don’t view it as a realistic goal in the next five years. I agree with Ron Paul on this obviously, but that’s kind of a moot point. I continue to support him monetarily and ideologically hoping someday fools will listen to wisdom.

What I do wonder is – What is it about Janet Yellen that made the current Administration not as keen on her as Summers. So we are getting a fact profile and the fact profile looks like Yellen is the same economist as any other likely economist friendly to this Administration. However, those who didn’t make her their first choice rub shoulders with her everyday and there has to be something she privately doesn’t strongly support that they want strongly supported.

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