Ron Paul: Fed Stealing From The Poor, Giving To The Rich

Last Thursday the Senate Banking Committee held hearings on Janet Yellen’s nomination as Federal Reserve Board Chairman. As expected, Ms. Yellen indicated that she would continue the Fed’s “quantitative easing” (QE) polices, despite QE’s failure to improve the economy. Coincidentally, two days before the Yellen hearings, Andrew Huszar, an ex-Fed…

Last Thursday the Senate Banking Committee held hearings on Janet Yellen’s nomination as Federal Reserve Board Chairman. As expected, Ms. Yellen indicated that she would continue the Fed’s “quantitative easing” (QE) polices, despite QE’s failure to improve the economy. Coincidentally, two days before the Yellen hearings, Andrew Huszar, an ex-Fed official, publicly apologized to the American people for his role in QE. Mr. Huszar called QE “the greatest backdoor Wall Street bailout of all time.”

As recently as five years ago, it would have been unheard of for a Wall Street insider and former Fed official to speak so bluntly about how the Fed acts as a reverse Robin Hood. But a quick glance at the latest unemployment numbers shows that QE is not benefiting the average American. It is increasingly obvious that the Fed’s post-2008 policies of bailouts, money printing, and bond buying benefited the big banks and the politically-connected investment firms. QE is such a blatant example of crony capitalism that it makes Solyndra look like a shining example of a pure free market!

It would be a mistake to think that QE is the first time the Fed’s policies have benefited the well-to-do at the expense of the average American. The Fed’s polices have always benefited crony capitalists and big spending politicians at the expense of the average American.

By manipulating the money supply and the interest rate, Federal Reserve polices create inflation and thereby erode the value of the currency. Since the Federal Reserve opened its doors one hundred years ago, the dollar has lost over 95 percent of its purchasing power —that’s right, today you need $23.70 to buy what one dollar bought in 1913!

As pointed out by the economists of the Austrian School, the creation of new money does not impact everyone equally. The well-connected benefit from inflation, as they receive the newly-created money first, before general price increases have spread through the economy. It is obvious, then, that middle- and working-class Americans are hardest hit by the rising level of prices.

Congress also benefits from the devaluation of the currency, as it allows them to increase welfare- and warfare-spending without directly taxing the people. Instead, the increase is only felt via the hidden “inflation tax.” I have often said that the inflation tax is one of the worst taxes because it is hidden and because it is regressive. Of course, there is a limit to how long the Fed can facilitate big government spending without causing an economic crisis.

Far from promoting a sound economy for all, the Federal Reserve is the main cause of the boom-and-bust economy, as well as the leading facilitator of big government and crony capitalism. Fortunately, in recent years more Americans have become aware of how the Fed is impacting their lives. These Americans have joined efforts to educate their fellow citizens on the dangers of the Federal Reserve and have joined efforts to bring transparency to the Federal Reserve by passing the Audit the Fed bill.

Auditing the Fed is an excellent first step toward restoring a monetary policy that works for the benefit of the American people, not the special interests. Another important step is to repeal legal tender laws that restrict the ability of the people to use the currency of their choice. This would allow Americans to protect themselves from the effects of the Fed’s polices. Auditing and ending the Fed, and allowing Americans to use the currency of their choice, must be a priority for anyone serious about restoring peace, prosperity, and liberty.

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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Smirks November 19, 2013 at 9:26 am

You mean, the guy that decided to keep Bernanke in place last time wants to put up someone who will keep doing the same shit Bernanke was doing? And that endless QE for the benefit of huge financial institutions isn’t actually going to do anything positive for the little guy?

I did want to post this in response to Paul talking about the value of $1 in 1913 as compared to today:


tomstickler November 19, 2013 at 11:19 am

I would feel better about your linked article if it compared the median income, rather than the average, or per-capita, income.

Income inequality is a major problem today that may not have been so extreme in 1913. This inequality, where some people make (not earn) more than a billion dollars yet millions barely scrape by, can give a false impression of the “average American” making $46,000/year. For example, the top 0.1% of Americans earned 8.1% of total US income in 2006. It has gotten worse since then.

The median household income in the United States for all house-holds in 2006 was $48,451, according to the American Community Survey of the US Census Bureau. That is household income, not for the “average American” individual.

EJB November 19, 2013 at 12:41 pm

You act as if income is a zero sum proposition. What Warren Buffet makes has no impact on what I make, or Donald Trump or any other “rich” person. They make their money and I make mine. There are inherent income gaps depending on how people apply themselves. I don’t believe an income “gap” is a bad thing or a good thing, it just is. Also, I would suggest that our current “welfare” and government gimme programs contribute more to income “gaps” than any kind of nefarious dealings by the 1%. Get over the jealousy that 0bama wants you bring into the voting booth

In this article read down to number 8;


“income gaps” are pure BS, just a string that is used to lead you around with.

2+2+=4 November 19, 2013 at 1:41 pm

Don’t be daft. When you print money, it devalues. Plain & simple. No need for rocket science:


Halfvast Conspirator November 19, 2013 at 9:32 am

Wonder if there is a deal to launder a good part of the $85bil a month to the Dem party

idiotwind November 19, 2013 at 9:33 am

so why not correct this with tax policy? tax the rich and build the infrastructure and education that will level the playing field. oh wait, libertarians don’t solve problems, they just point at them.

Perfect name for you November 19, 2013 at 9:50 am

This “solution” to the problem isn’t some form of central planning, that’s what people like you don’t get.

It’s the friggen pols controlling everything & everyone that creates the problem in the first place.

Leave everyone the fuck alone and the problems work themselves out.

“tax the rich” eventually cause the rich to go away via a multitude of ways.

idcydm November 19, 2013 at 10:24 am

Here’s one for you, tax all income at the same rate with no deduction. Once everyone has skin in the game they may think twice how politicians spend their tax dollars.

Leveling the playing field only works when everyone wants to play in the field.

Sal20111 November 19, 2013 at 3:29 pm

idiotwind, you aren’t really paying attention to recent history or what Ron Paul has just explained. Your taxes are being used for bank bailouts and handouts to large corporations. QE is just another form of taxation on you: the Fed printing money that causes an inflation tax (hitting the poor the hardest), and giving it to the banks who in turn dish some of it out to their cronies.

Who decides how and where taxes are spent? Politicians and their lobbyists. The solution is not more taxes but no more Fed bailouts to the banks and devaluation of the US dollar causing a stealth inflation tax on the poor. Ron Paul has pointed out both the problem and the solution. Rather than boxing in people, left/right and progressive/libertarian, and forming knee-jerk opinions accordingly, learn to think about the issues analytically from first principles.

ThreePalms November 19, 2013 at 10:55 am

What a bunch bull. My favorite is the dollar losing 95% of its purchasing power over the last 90 years. (I started laughing as I was typing it here.) Ron Paul is still trying to stir up less informed people about subjects that are complicated and difficult to understand. Anyone who believes that the fed stimulus (The strategy of Quantitative Easing) has not greatly benefited our economy (and every participant in it, albeit not equally) is in denial of how badly things had gotten in 2007 and 2008. If you are troubled by the debt that has been created, stop supporting strategies to cut federal revenues.

Lord Keynes November 19, 2013 at 2:01 pm

Why would anyone be troubled? As Krugman and other followers of me have said, the debt is meaningless.

Press the debt accelerator if anything.

Max Frisch November 20, 2013 at 1:59 pm

Printing money is good. Adds more value to the toilet paper.

so tired November 20, 2013 at 8:08 pm

(I started laughing as I was typing it here.)
what an idiot you are.
(Ron Paul is still trying to stir up less informed people about subjects that are complicated and difficult to understand.)
As if you understand them jackass.

QE will ultimately ruin our economy by trashing the dollar.
I will feel very good when this falls apart.

Centrist View November 19, 2013 at 11:56 am

“Far from promoting a sound economy for all, the Federal Reserve is the main cause of the boom-and-bust economy…”

Not to praise the Fed, but there has never been a “sound economy.” It is called the “business cycle.”

The NBER has been dating business cycles since 1854.

The Federal Reserve System was created in 1913. What caused all those cycles prior to then?

The 1%, well to do & crony capitalists have always done better than the average citizen because the former knows how money works, and the latter does not. Making money is a skill, and some people are just much better at it than others.

Scratchin da head November 19, 2013 at 1:50 pm

Your link doesn’t establish nor explain the depth of the peak to troughs, so it is in effect almost worthless.

Additionally, you don’t even reference the the Bland-Allison Act or the influx of money from the silver boom in the same period.

So while I agree with your later statement that some people are better at making money than others, you don’t seem to recognize the role of expanding money supply and government manipulation of the money supply dating back to post civil war pre Federal Reserve days or its role in business cycles.

Sal20111 November 19, 2013 at 12:01 pm

Ron Paul is right on the money again: bullseye on the Fed, QE, crony capitalism, and the economic rape of the poor to maintain the wealthy, inefficient status quo. Terrific thinker and straight talker, if only politicians like him were allowed to represent the people. Don’t agree with him on everything though, the exception being gun control.

Patriot1 November 20, 2013 at 12:41 am

So in other words you’re a gun grabber. Ron Paul is 100% gun rights. Another reason to like Ron Paul besides his monetary and foreign policy views.

Steve Svensson November 20, 2013 at 10:33 am

Obama needs to give Ron Paul the presidential medal of Freedom.


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