Wednesday, September 05, 2007

Who's afraid of Ron Paul?

Yes, as promised, regular blogging is resuming after Labor Day.

Starting, for now, with my non-regular contribution to The Boston Globe -- a column on the intriguing candidacy of Ron Paul.

So far in Campaign 2008, the one contender who seems to have generated the most grassroots excitement isn't really a contender at all. Ron Paul, the Republican congressman from Texas, doesn't have much chance of winning.

When the mainstream media have noticed Paul at all, they have largely treated him as a curiosity or even a nuisance: After the first Republican debate in May, a Washington Post editorial suggested that the debates would be much better if they weren't "cluttered" by such nobodies. Perhaps the most media notice he attracted was when, in the second debate, he seemed to suggest that American foreign policy was responsible for the Sept. 11 attacks. This comment quickly became an opportunity for patriotic point-scoring by Rudy Giuliani, and led some GOP operatives to call for Paul's exclusion from future debates.

Yet Paul has a following that no other candidate can match in sheer dedication. His impressive performance in Internet polls has been supplemented with two landslide victories in Republican straw polls - in Strafford County, N.H., (with 208 of the 288 votes) and in Alabama.

What, then, is Ron Paul all about? While his views are decidedly unorthodox for today's Republican Party, they represent a venerable, oft-forgotten Republican tradition of small government at home and noninterventionism abroad. In some ways, he is an heir to Barry Goldwater, the Arizona Republican who ran for president in 1964. Paul, a 72-year-old physician, first ran for president in 1988 on the Libertarian Party ticket. Then, he decided to work from within the GOP. He won a House seat as a Republican in 1996, over strong opposition from the establishment.

On the campaign trail, Paul articulates a philosophy that recalls the famous dictum often attributed to Henry David Thoreau: "That government is best which governs least." "I want to be president mainly for what I don't want to do: I don't want to run your life, I don't want to run the economy, and I don't want to police the world," he told a potential supporter at the Strafford County straw poll. He wants to abolish the Federal Reserve and the income tax, to end the war in Iraq and the war on drugs, to dismantle the Department of Homeland Security and the Department of Education.

Unlike many libertarians, Paul is not a social-issues liberal: thus, he opposes abortion. However, he wants the issue to be decided by states, not on a federal level. And, in the first Republican debate, Paul gave the only principled libertarian response on the issue of funding for stem-cell research: "The trouble with issues like this is, in Washington we either prohibit it or subsidize it. And the market should deal with it, and the states should deal with it."

Paul's followers are a veritable rainbow coalition drawn from across the political spectrum. The most striking image from his campaign - the slogan "Revolution" with the letters "EVOL" reversed to spell "love" backward - is, to use a 1960s metaphor, more Beatles than Barry Goldwater. (The creator of this slogan, Arizona libertarian Ernie Hancock, explains in an online article that the "love" refers to love of liberty, but concedes that the visual was chosen mainly for its emotional impact.)

In a sense, Paul is the Ralph Nader of the right, attracting people who are deeply alienated by conventional politics. Inevitably, he attracts people from the lunatic fringe, such as Sept. 11 conspiracy theorists who believe the US government engineered the attacks. But it would be unfair to paint Paul as the candidate of crackpots. His message resonates with many people who don't fit into conventional categories of left and right.

In its pure form, Paul's libertarianism is not politically viable. Polls have shown that, at most, about 10 percent of Americans are in favor of reducing the scope of government, and domestic government services, to a minimum. Paul's case for noninterventionism abroad is problematic as well. He has contrasted our entanglements in Third World countries that cannot pose a military threat to the United States with the fact that "we stood up to the Soviets [who] had 40,000 nuclear weapons." But American foreign policy in the Cold War was an interventionist one, requiring massive and expensive commitments from the federal government. And there is a strong argument that, in today's globalized world, totalitarian movements rooted in religious extremism would inevitably threaten US interests and safety if left unchecked by American power.

Even if, by some miracle, Paul managed to win, it is unlikely he would be able to enact much of his libertarian agenda. But in an age of bipartisan Nanny Statism, his arguments provide a refreshing alternative, a bold and much-needed critique of a creeping loss of freedom at home and reckless adventurism abroad.

Predictably, I have received some negative emails from Ron Paul supporters, complaining that there is nothing in my column that is different from "a hundred other 'inside baseball' article about why Paul can't win." One gentleman writes:

I found your article titled "A love revolution, Goldwater-style" to be unduly biased and critical of Ron Paul. Perhaps the irony is that you write for Reason Magazine and you fail to use your reason in writing. Reason would dictate a fair consideration of the facts. I don't see you doing that. You engage in predicting the future.

To say that Ron Paul doesn't have much chance is your personal opinion but surely not representative of what is going on. Would you say the same thing about McCain, who has less cash on hand than Paul? If so, then where is that article?

Reason magazine has strong libertarian roots such that REASON is a core value of the libertarian party in addition to FREE MINDS and MARKETS. It is unbelievable that you would write such an article. I think that the article is a disgrace to the magazine. If there would be some shred of support, I would have thought it would have been from REASON. Even a magazine that stands for much of what Ron Paul talks about, abandons him for some reason? Care to explain?

If you really want free minds, you should let people make there own assessment of Ron Paul and NOT try to influence them with subtle suggestions.

Well, I would point out that my column differs from a hundred others in the mainstream media simply by taking Ron Paul's ideas seriously, even I disagree with many of them (at least in degree). I will also point out that I don't speak for Reason magazine and that Reason does not speak for the Libertarian Party or for any candidates. As for whether Paul can win, I seriously doubt I can changed anyone's mind either way. (It's also just my personal opinion that a movie called Ghost Town, a reportedly excellent indie Western scheduled for release later this year, has no chance to become the top-grossing movie of 2007). Those who prefer to be enabled in their wishful thinking are welcome to it.

I would direct my critics to the (far harsher) article by Christopher Caldwell (a libertarian-leaning conservative) in the New York Times Magazine, and specifically to this:

Paul understands that his chances of winning the presidency are infinitesimally slim. He is simultaneously planning his next Congressional race. But in Paul’s idea of politics, spreading a message has always been just as important as seizing office. “Politicians don’t amount to much,” he says, “but ideas do.”

There's one Ron Paul position that gets my vote.


Revenant said...

Ron Paul's claim that he doesn't want to "run the economy" clashes pretty violently with the fact that he vehemently supports putting the us back on the gold standard -- an action which economists universally agree would be a disaster. Messing up the economy through government action in the service of a pet ideology might not technically qualify as "running the economy", but only in the sense that a person who seizes control of a plane and promptly crashes it isn't technically "flying the plane".

His claim last night that an American withdraw from Iraq wouldn't produce a bloodbath because the people who say it would have been wrong before also managed to be simultaneously illogical *and* factually wrong on both claims -- there are plenty of people who opposed the war but still recognize that withdraw would be a disaster.

It is bad enough that the Libertarian Party has to nominate a fruitcake every four years. Do we really need a Republican candidate making libertarians look bad, too?

Anonymous said...

Paul's position on the gold standard may be archaic, but his comments over the years on the blunders of the Federal Reserve, particularly the malign legacy of Al Greenspan are spot-on. Twenty years from now, people will be shaking their heads and wondering how we could have been so stupid as to believe that fractional reserve central banking, completely unregulated derivatives markets and an endlessly inflating currency were the Keys to Prosperity. Paul was one of the only members of Congress to grill Greenspan the way he deserved during the Fed chairman's royal visits to the Hill, and he earned a lot of brownie points from me for it. As for "messing up the economy through government action," I'd say that the GSEs like Freddie Mac and Fannie Mae are well on the way to doing just that - and what's George Bush doing bailing out subprime lenders and mortgage-holders via the FHA?

There probably will be a bloodbath when the Americans withdraw from Iraq - problem is, there's a bloodbath going on right now, and we're caught in the middle of it. Iraq will be a quasi-disaster whether we leave sooner or later, as there is no effective national government, the security forces are completely sectarian and utterly corrupt, and nobody trusts anybody else. Right now, there are people talking about leaving up to 100,000 American troops in-country for up to 20 years - and Paul is supposed to be the loony on this issue?

I don't think Paul has any chance of winning, nor do I agree with his stands on issues such as abortion, but I appreciate his willingness to voice opinions that the GOP has been ignoring for far too long. Once upon a time, mainstream Republicans told us about the dangers of profligate spending, Wilsonian foreign policies and the nanny state - now, the guy sounding the alarm is the Official Flake of the 2008 campaign. I don't think Barry Goldwater would be too happy to see what his party has turned into.

Revenant said...

Twenty years from now, people will be shaking their heads and wondering how we could have been so stupid as to believe that fractional reserve central banking, completely unregulated derivatives markets and an endlessly inflating currency were the Keys to Prosperity

Twenty years from now, if we're very lucky, the last of the people who think that Greenspan's strategy was a bad one will have finally gotten a clue and learned something about economics. If we're very, very lucky, some of these people will be members of the Libertarian Party, and we'll finally see some candidates from that party whose economic pronouncements aren't embarrassingly ignorant.

There are several reasons why a tiny, stable amount of inflation -- i.e., what we've had during the Greenspan and post-Greenspan years -- is a good thing. The two big ones are (a) it wards off deflation, which is absolutely disastrous to an economy and for which there are no known cures, and (b) it helps deal with the problem of sticky wages in overvalued industries by giving everyone an automatic pay cut each year that must specifically be offset with a raise.

Paul is supposed to be the loony on this issue?

Yes. And if you think that the so-called "bloodbath" we're in now won't get dramatically worse once we leave then I see no reason to waste my time talking to you.

Unknown said...

Nice article. I found it to be well articulated, though I don't agree with the general reasoning why he can't win. It's my view that even among libertarians, very few actually understand and have the depth of knowledge required to "get" his positions.

Why is it that "The Government that governs the least governs the best"? Well, it's like any enterprise. Look at the corperate world, anytime a company starts to decline, it's usually because it's attempting too much with too few resources. So the first thing managers do is slim down the buisness, shed the access. So from a buisness perspective, it's actually a very common sense approach. Our government is doing a lot, and not doing those thing well, and it's hurting the "core functions".

Now, for the commentors:
Economists aren't in universal agreement on the gold standard. There are many with Nobel Prizes just as big as Friedman's that prefer it for the stability.

And I ask, why exactly is a long term trend of inflation preferable to long term trends of deflation? Yes, spikes, in either direction, are harmful. But a long term deflation induces wealth building, that is to say, people save money. Inflation is the opposite, it induces debt building, that is credit bubbles. Secondly, a tendancy towards deflation actually helps those on the lower economic spectrum as well as those in the middle and top by tending good prices down. Through that trend, you free up funds that were being used for welfare and put them back into the investor class because it's no longer needed at the bottom to keep the poor afloat. The reason why our economy nessesitates these features is because credit and inflation rewards early receivers of credit and punishes those that come after.

As far as Iraq, yes I agree, it's going to be bloody either way we go. He's just playing politics when he says "why listen". Now, as far as the actual merit of the Iraq War, I think the name itself is a misnomer. I prefer to think of Iraq as a battle in the larger War on Terror. And like any war, you don't fight to win each battle, you must know when to withdraw from one battle to win the war. The War is about keeping us safe, so anytime that we stalemate with the enemy, like in Iraq, we must assess if the stalemate helps us by stalling the enemy more than it stalls us, or if its the other way around. I believe the stalemate in Iraq hurts us more than it hurts our enemy, therefore we should withdraw to win the war.

Unknown said...


Even Greenspan recently admitted that his rate cut that created the credit bubble was a mistake that he didn't understand at the time.

So, if you really expect people to start seeing his actions in a better light, you're going to have to start with Al himself.

Anonymous said...

Revenant, I'm curious about how many Iraqis you think have been killed, maimed or displaced since the war began.


Revenant said...


So, if you really expect people to start seeing his actions in a better light, you're going to have to start with Al himself.

I don't recall saying that Greenspan never made a bad decision. What I was mocking was mabman's attacks on "fractional reserve central banking, completely unregulated derivatives markets and an endlessly inflating currency". Fractional reserve central banking and a steadily, very low rate of inflation (i.e., what we've had since the 90s) are only considered bad by the ignorant lunatic fringe at this point. There are many very good reasons why only a handful of fools and lunatics demand a return to the gold standard at this point.

As for the supposed evils of unregulated deriviatives markets, do I really need to explain to a bunch of so-called libertarians why government restrictions on a free market are a bad thing?

Unknown said...


I never mentioned markets of anykind, and I wasn't calling for government regulation. I can't speak for mab, but you can't deny that the market didn't even regulate itsself, and that's the real problem, and they are learning from their mistakes.

As far as only lunatics not seeing the "good" of fractional reserve banking, and how everyone else recognizes it, well if everyone is punch drunk on easy credit, no I wouldn't expect them to denounce it. At that point, only sober people would point out that the punch is spiked.

Inflation is bad, period. It's something that should be, ideally, avoided just like deflation. Inflation discourages saving, and from that you nessesitate further taxation to "save them" via SS.

"Twenty years from now, if we're very lucky, the last of the people who think that Greenspan's strategy was a bad one will have finally gotten a clue and learned something about economics."

That's what I was countering. His entire management during the 90's was wrong and is what created this mess, and he even openly admitted this. So, for you to expect us to think as you stated above, you will need to tell Greenspan "Don't worry, you were right after all to create the credit bubble". Not to mention the period of selective 0% interest.

It's you who needs the lessons in economics my friend to learn how interest rates and inflation play into the micro-level decisions people make, and how they then translate back into macro trends.

Revenant said...

I can't speak for mab, but you can't deny that the market didn't even regulate itsself, and that's the real problem, and they are learning from their mistakes.

"Learning from their mistakes" is how markets regulate themselves.

if everyone is punch drunk on easy credit, no I wouldn't expect them to denounce it. At that point, only sober people would point out that the punch is spiked.

The sober people also recognize that fractional reserve banking is the intelligent way to run things. Eliminating it would have no effect other than causing all American banks to relocate outside of the country where the banking laws are more intelligent.

Inflation is bad, period.

Deflation is much worse. Since having an inflation/deflation rate of exactly zero is impossible (we've never had that, even under a gold standard), the intelligent thing to do is try to keep a small level of inflation so that fluctuations don't drop us into deflation. Deflation, once you're in it, is virtually impossible to get out of.

Inflation discourages saving

Inflation discourages saving of the "hide your money under the mattress" variety. Given that that's an idiotic way to handle your money in the first place I'm happy to see it discouraged.

Low rates of inflation *encourage* savings in the form of investments, because investing (even after accounting for inflation) increases your wealth while the Mattress Savings System (after inflation) decreases it. Since investment is the intelligent thing to do even if the inflation rate is exactly zero, all this means is that the existence of inflation encourages people to do what any intelligent person would be doing in the first place.

His entire management during the 90's was wrong and is what created this mess, and he even openly admitted this.

If you think Greenspan "admitted" that his "entire management was wrong" then you obvious didn't understand his remarks.

Furthermore, the "legacy" of Greenspan that mabman railed against was the same fractional reserve banking, low-but-positive inflation rates, and lax regulation that YOU are railing against. THAT is the Greenspan policy I was referring to. Greenspan still defends those polices, and people twenty years from now will too. But I have every confidence that the lunatic fringe will still be demanding a return to the 19th century.

Fortunately, the chances of anyone ever listening to you are indistinguishable from zero -- and if the day ever comes, I can simply move to another country and snicker while America reverts to impoverished third-world-nation status overnight.

Anonymous said...

Yes, it's true that Ron Paul probably isn't going to win. But I think the main reason that you received a negative reaction for saying so is that this can very easily become a self-fulfilling prophecy. Unfortunately, far too many Americans do seem to base their vote on who they think will win, rather than who they actually agree with the most. For that reason alone, I really wish that commentators would separate discussion of who they support from whose chances they think are best.

Unknown said...


Let me give you a nice clear example of exactly why I dislike the Fractional Reserve System. I had a conversation with my banker today on this exact matter.

He was trying to get me to put my $5,000 that I have in checking into a CD. I grant him that he didn't know I have an actual savings account and retirement account with a much better bank, but that's besides the point. He was trying to tempt me with a "gracious" 5% interest.

So say I did that. In exchange for $200 and not being able to touch my money for a year and the extra tax paperwork, they will loan out $50,000. Let's say they go for maximum return and turn that into short term loans at 10%. That's $5,000 they just brought in. I didn't win anything but a single days pay, they won the amount of my savings. Why should I go through the hassle so they can make more profits.

It works against us guy, plain and simple. Yes, hiding it in a matress is stupid. What about a safe, or safe deposit box, like most people did before (unlike the stereotype of the poor of that time)? Perfectly legit.

BTW, deflation isn't "bad". In too much it's dangerous, but to no more of an extent that inflation. The difference is that deflation works against creditors and banks, inflation works for them.

Low deflation wouldn't "sink the ship" anymore than low inflation. The difference is you're not punishing people.

Now, lets go long term. $1M is a lot of money right now, and is very feasible to save over a career for someone who is 25 right now. But, what will that buy him? Assuming that person wants to be able to spend the equivilant of $2,000 of today's money, given that the same amount of inflation happens in the future as happened in the prior 30 years, he will need $11,000 a month. That million only gets him 7 years of full retirement.

And you tell me that you think that is much more preferable to a mild deflation? You can get out of high deflation, just like you can get out of high inflation, but to get out of either takes a long time. Simply put, low, controlled deflation would make Social Security unnessasary for the majority of people, and could be afforded for those that need it, unlike what inflation does.

And besides, a commodity based currency wouldn't "crash the economy", it just depends on how the transfer is done. And in the long term, investor's would come here to the US because they wouldn't have to fight inflation with their investments, and if everyone else is inflating, and hold positions in the US become worth even more in outside currency as time goes on. We'd actually ATTRACT investment.

Revenant said...

It works against us guy, plain and simple. Yes, hiding it in a matress is stupid. What about a safe, or safe deposit box, like most people did before (unlike the stereotype of the poor of that time)? Perfectly legit.

Legit, yes, but also moronic.

Take a step back for a minute and look at what you're saying. You would rather get *nothing* than get $250 -- for no reason other than that you're jealous that the Big Nasty Bank might make up to $4750 in profits on that money, assuming that your bank is located in a Fantasyland where no loans go bad. You would rather get 100% of nothing than get 5% of $5000. You're obviously not thinking rationally.

If you lock your money in a safe, the BEST case scenario is that you end up with as much money as you started with. The worst case scenario, of course, is that someone steals it and you're left with nothing. The overall average result is that putting your money in a safe or a safety deposit box is that you get out slightly more money than you put into it. Obviously any method of savings that results in you taking out less money on average than you put in is a stupid use of your money.

"Ah", you say, "but you can put the money in a safe IN A BANK". Yeah -- and pay the bank to guard it for you, which costs money. Again, you end up with less money than you started with. Flat-out stupid, no question about it.

BTW, deflation isn't "bad". In too much it's dangerous, but to no more of an extent that inflation. The difference is that deflation works against creditors and banks, inflation works for them.

That's exactly backwards. Deflation benefits creditors and banks and hurts debtors.

Let's say you borrow $1000 at 10% interest in 2010, to be repaid in one year. Inflation is 5% a year. 2011 rolls around. You owe the bank $1100 in 2011 dollars -- which is only $1048 in the 2010 dollars the bank originally lent you. Thanks to inflation, you actually *saved* $52 in interest. Now let's turn it around. You borrow the same amount of money, only inflation is at -5% -- we're in a deflationary economy. That $1100 in 2011 dollars that you owe the bank is worth $1158 of the 2010 dollars you originally borrowed. Thanks to deflation, the bank's profit off of you went up 58%!

In a deflationary economy, your salary drops every year. Your monthly mortgage and car payments, on the other hand, stay right were they were. Every year it gets harder and harder to make those payments, until eventually you can't.

And you tell me that you think that is much more preferable to a mild deflation? You can get out of high deflation

It is obvious that you don't actually understand anything about how the economy works (as your above remark about deflation being good for borrowers proves), but I'll give it one last shot:

The only known way to end deflation -- high or otherwise -- is to use force to get people to spend their savings. The two normal ways of accomplishing this are (a) to have a huge war (requiring big expenditures for the military and further expenditures to rebuild) or (b) for the government to confiscate the savings in question and spend them.

Economies need two things in order to thrive: they need people to spend money, and they need investment. A deflationary economy punishes spending (because a dollar today buys less than it will buy tomorrow, so people buy less and put off purchases longer -- which worsens deflation) and discourages investment (because nobody, whether a person or a business, wants to borrow money or spend money on this like new factories or equipment). In a deflationary market the smart thing to do with your money is bury it in the backyard. That's death for any economy. Inflation, on the other hand, encourages spending (because a dollar today buys more than a dollar will tomorrow) and encourages investment (because you HAVE to invest just to keep up).

As for your scenario in which a 25-year-old saves $1 million, you're ignoring the fact that in a deflationary economy he won't be saving nearly as much money. His salary will decline every year, for starters, bonds and banks will offer negative interest rates on deposits, and stocks will grow at a much lower rate (or even drop in price, if the deflation rate exceeds growth -- which it will, since deflation kills economies ten times out of ten).

So instead of having a million bucks that only buys seven years of retirement, he'll have a hundred thousand bucks that buys six years of retirement. Not an improvement.

Anonymous said...

i think there is clarity regarding the campaign - as you will find it on the link attached. the very basis for this disingenuousness is just a mere reflection of the core of his candidacy.

you don't have a 'love' revolution and not condemn racism.

and no one ever has run for the president of the united stated preaching 'love' as the theme.

Anonymous said...

Revenant could use some economics basics:

"Deflation is generally regarded negatively, as it is a tax on borrowers and on holders of illiquid assets, which accrues to the benefit of savers and of holders of liquid assets and currency. In this sense it is the opposite of inflation (or in the extreme, hyperinflation), which is a tax on currency holders and lenders (savers) in favor of borrowers and short term consumption."

-Wikipedia- (Deflation)

Sourcing the Truth said...

There are other ways to run economies that don't have to involve giving private banks a license to create money from promises to pay (and create obligations which can never be paid off unless the system is changed!). Our founding fathers, and many other great men throughout history have advocated such systems. The economic system of today would be abhorrent to the man who wrote the declaration of independence, in fact it is just what he feared. Perhaps if you read and digest the following quotes you will understand what I am talking about.

"If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good, makes the bill good, also. The difference between the bond and the bill is the bond lets money brokers collect twice the amount of the bond plus an additional 20%, where as the currency pays nobody but those who contribute directly in some useful way. It is absurd to say that our country can issue $30 million dollars in bonds and not $30 million in currency. Both are promises to pay, but one promise fattens the usurers and the other helps the people." --Thomas Edison

"I have two great enemies, the southern army in front of me and the financial institutions, in the rear. Of the two, the one in the rear is the greatest enemy..... I see in the future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of the war." - Abraham Lincoln in 1863, at the height of the Civil War

"The government should create, issue and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of consumers..... The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government's greatest creative opportunity. By the adoption of these principles, the long-felt want for a uniform medium will be satisfied. The taxpayers will be saved immense sums of interest, discounts and exchanges. The financing of all public enterprises, the maintenance of stable government and ordered progress, and the conduct of the Treasury will become matters of practical administration. The people can and will be furnished with a currency as safe as their own government. Money will cease to be the master and become the servant of humanity. Democracy will rise superior to the money power." -Abraham Lincoln Senate document 23, Page 91. 1865

"We have come to be one of the worst ruled, one of the most completely controlled governments in the civilized world- no longer a government of free opinion, no longer a government by ... a vote of the majority, but a government by the opinion and duress of a small group of dominant men. Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it." --President Woodrow Wilson (after regretting his role in allowing the federal reserve and the income tax to be established)

"I believe that banking institutions are more dangerous to our liberties than standing armies." - President Thomas Jefferson

"I wish it were possible to obtain a single amendment to our constitution - taking from the federal government their power of borrowing." President Thomas Jefferson, 1798

"If the American people ever allow private banks to control the issue of their currency, first by inflation then by deflation, the banks and the corporations will grow up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." - President Thomas Jefferson, The Debate Over The Recharter Of The Bank Bill, (1809)

"All of the perplexities, confusion, and distress in America arises, not from the defects of the Constitution or Confederation, not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit, and circulation." -- President John Adams

"You are a den of vipers and thieves and I intend to rout you out, and by the eternal God, I will rout you out. If Congress has the right to issue paper money, it was given them to be used by themselves, and not to be delegated to individuals or corporations.." -- Andrew Jackson's address to Congress 1829 On January 8, 1835, Jackson paid off the final installment on our national debt, and it was the only time in history that our national debt was reduced to zero, and we were able to accumulate a surplus, $35 million of which was distributed to the States. Nicholas P. Trist, the Presidents personal secretary, said: This is the crowning glory of A.J.s life and the most important service he has ever rendered his country. The Boston Post compared it to Christ throwing the money-changers out of the Temple

"In the Colonies, we issue our own paper money. It is called 'Colonial Scrip.' We issue it in proper proportion to make the goods and services pass easily from the producers to the consumers. In this manner, creating ourselves our own paper money, we control its purchasing power and we have no interest to pay to no one. In this manner, by creating ourselves our own paper money, we control its purchasing power, and we have no interest to pay, to anyone. You see, a legitimate government can both spend and lend money into circulation, while banks can only lend significant amounts of their promissory bank notes, for they can neither give away nor spend but a tiny fraction of the money the people need. Thus, when your bankers here in England place money in circulation, there is always a debt principal to be returned and usury to be paid. The result is that you have always too little credit in circulation to give the workers full employment. You do not have too many workers, you have too little money in circulation, and that which circulates, all bears the endless burden of unpayable debt and usury." - Benjamin Franklin, founding father, the man on the $100 federal reserve note, Autobiography

"If this mischievous financial policy, which has its origin in North America, shall become endurated down to a fixture, then that Government will furnish its own money without cost. It will pay off debts and be without debt. It will have all the money necessary to carry on its commerce. It will become prosperous without precedent in the history of the world. The brains, and wealth of all countries will go to North America. That country must be destroyed or it will destroy every monarchy on the globe." - Hazard Circular - London Times 1865 speaking of the colonies monetary system which would unshackle the colonies from the british yoke

"The division of the United States into federations of equal force was decided long before the Civil War by the high financial powers of Europe. These bankers were afraid that the US, if they remained as one block, and as one nation, would attain economic and financial independence, which would upset their financial domination over the world." - Otto von Bismark, Chancellor of Germany 1876

"The death of Lincoln was a disaster for Christendom. There was no man in the United States great enough to wear his boots and the bankers went anew to grab the riches. I fear that foreign bankers with their craftiness and tortuous tricks will entirely control the exuberant riches of America and use it to systematically corrupt modern civilization." - Otto von Bismarck, German Chancellor (1815-1898), after Lincoln assassination.

"Whosoever controls the volume of money in any country is absolute master of all industry and commerce... And when you realise that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate." - James Garfield (assasinated within weeks of release of this statement during first year of his Presidency in 1881)

"The earth, in its natural, uncultivated state was, and ever would have continued to be, the common property of the human race." As the land gets cultivated, "it is the value of the improvement, only, and not the earth itself, that is in individual property. Every proprietor, therefore, of cultivated lands, owes to the community a every person, rich or poor...because it is in lieu of the natural inheritance, which, as a right, belongs to every man, over and above the property he may have created, or inherited from those who did" - Thomas Paine 1796, p. 611; 612-613

"When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes... Money has no motherland; financiers are without patriotism and without decency; their sole object is gain." -- Napoleon Bonaparte, 1815

"Money plays the largest part in determining the course of history" - Karl Marx (Communist Manifesto)

"Let me issue and control a nation's money and I care not who writes the laws." - Mayer Amschel Rothschild, 1790

"Those few who can understand the system (check book money and credit) will either be so interested in its profits, or so dependent on it favors, that there will be little opposition from that class, while on the other hand, the great body of people mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear it burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests." - The Rothschild Brothers of London

"Every gun that is made, every warship launched, every rocket fired signifies in the final sense a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of it laborers, the genius of its scientists and the hopes of its children" President Dwight D. Eisenhower

"Banking was conceived in iniquity and was born in sin. The Bankers own the Earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a happier and better world to live in. But if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create deposits." - Sir Josiah Stamp, President of the Bank of England in the 1920's, the second richest man in Britain

"Because of 'fractional' reserve system, banks, as a whole, can expand our money supply several times, by making loans and investments. Commercial banks create checkbook money whenever they grant a loan, simply by adding new deposit dollars in accounts on their books in exchange for a borrower's IOU." - Federal Reserve Bank, New York

"The actual process of money creation takes place in commercial banks. As noted earlier, demand liabilities of commercial banks are money...confidence in these forms of money also seems to be tied in some way to the fact that assets exist on the books of the government and the banks equal to the amount of money outstanding, even though most of the assets themselves are no more than pieces of paper...commercial banks create checkbook money whenever they grant a loan, simply by adding new deposit dollars in accounts on their books in exchange for a borrower's IOU...the 12 regional reserve banks aren't government institutions, but corporations nominally 'owned' by member commercial banks." - Federal Reserve Bank of Chicago

"The bank hath benefit of interest on all moneys which it creates out of nothing." - William Patterson (founder of Bank of England)

"Banks lend by creating credit. They create the means of payment, out of nothing." - Ralph M. Hawtery (Former Secretary of the British Treasury)

"Money is a new form of slavery, and distinguishable from the old simply by the fact that it is impersonal -- that there is no human relation between master and slave." - Leo Tolstoy

"There does exist and has existed for a generation, an international Anglophile network which operates, to some extent, in the way the radical Right believes the Communists act. In fact, this network, which we may identify as the Round Table groups, has no aversion to cooperating with the Communists, or any other groups, and frequently does so. I know of the operations of this network because I have studied it for 20 years and was permitted for two years, in the early 1960s, to examine its papers and secret record." - Carroll Quigley, Georgetown University professor (deceased), in Tragedy and Hope: A History of the World in Our Time, 1966, p.950

"The greatest enemy of mankind is his ignorance of the inherent money power in all of us. When the realization of this comes to man, he will like Samson, push down the walls of his prison." - E.C. Riegel

"While economic textbooks claim that people and corporations are competing for markets and resources, I claim that in reality they are competing for money - using markets and resources to do so. Greed and fear of scarcity are being continuously created and amplified as a direct result of the kind of money we are using. For example, we can produce more than enough food to feed everybody, and there is definitely not enough work for everybody in the world, but there is clearly not enough money to pay for it all. In fact, the job of central banks is to create and maintain that currency scarcity. Money is created when banks lend it into existence When a bank provides you with a $100,000 mortgage, it creates only the principal, which you spend and which then circulates in the economy. The bank expects you to pay back $200,000 over the next 20 years, but it doesn't create the second $100,000 - the interest. Instead, the bank sends you out into the tough world to battle against everybody else to bring back the second $100,000."- Bernard Lietaer, Former Central Banker

"I went to America in the winter of 1872-73, authorised to secure, if I could, the passage of a bill demonetising silver. It was in the interest of those I represented - the governors of the Bank of England - to have it done. By 1873, gold coins were the only form of coin money." - Ernest Seyd, agent of Bank of England

Revenant said...

Revenant could use some economics basics:

You could use some English lessons. The Wikipedia article you quoted agreed with me on every point. Deflation is bad for debtors ("borrowers", as Wikipedia calls them), inflation is bad for people who keep their savings in cash. Which part of that confused you?

Revenant said...
This comment has been removed by the author.
Revenant said...

Our founding fathers, and many other great men throughout history have advocated such systems.

A good portion of our founders, George Washington among them, supported Hamilton and the Federalist Party, which advocated a central bank and many of the other policies you wrongly abhor.

The economic system of today would be abhorrent to the man who wrote the declaration of independence, in fact it is just what he feared.

"The man who wrote the Declaration of Independence", a.k.a. Thomas Jefferson, spent most of his adult life plagued by financial problems and died deep in debt. Don't let hero worship cloud your judgment. Jefferson had many admirable traits, but he was an idiot when it came to finance.

"All of the perplexities, confusion, and distress in America arises, not from the defects of the Constitution or Confederation, not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit, and circulation." -- President John Adams

The amusing thing about your decision to quote Adams is that he was talking about people like you. Adams favored the Federalists and the idea of a central bank. Anyway, that's all the time I have for you. I'll close with just one question -- do you agree with many of the founders, such as Thomas Jefferson, that black people are inherently inferior to whites?

If not, you might want to ponder the notion that there are a lot of subjects where our knowledge and understanding dwarfs that of the men who founded America.

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