Does learning about the Federal Reserve make your eyes glaze over? Yeah – pretty boring! But what it’s done, and HASN’T DONE has kept the country’s economy stuck in “Park” for the past five years. Welcome to “THE BIG PICTURE”
You might ask yourself why a small town local news website even thinks about dabbling in large scale macro-economic issues like the Federal Reserve. We do think about it, but not for the same reasons that Libertarian Ron Paul does.
There is a rising chorus of discussion going on across the country about how the American economy REALLY operates at all levels – from Main Street to Wall Street and now to a seldom examined institution on Constitution Avenue in Washington D.C. on which sits the U.S. Federal Reserve.
Most American citizens think that behind every American dollar there is a dollar’s worth of gold. No there isn’t. America got off the gold standard in 1933 when we ran out of gold and yet needed to keep printing money. So, you might ask, what makes the dollar worth anything today? Simply put, without any embellishment by your average patriotic parade, “The Full Faith and Credit of the United States.” In short, “We pay our bills.”
Regulating our country’s money supply so as to keep Americans working hard without suffering from too many dollars in circulation which produces inflation, the Federal Reserve was founded as a mostly independent government institution held at arms length by the President and the Congress. In fact, the President and the Congress have very little day-to-day say over how the Federal Reserve regulates our money supply. But suffice it to say there is a growing grumbling about the way it has been operating during the current recession. Critics say it’s taking really good care of the already super wealthy and their banks at the total expense of middle and lower class Americans. They contend that there is an ongoing program to replenish the battered reserve accounts of the country’s biggest banks which does practically nothing to pull the country out of the recession. It just stacks up money doing nothing. That’s why bank and corporate vaults are flush with cash while the economy remains in “park.”
The following are articles that have been long in coming that questions why the Federal Reserve has been really good at keeping down inflation (Primary Directive #1) while doing practically nothing to ensure high employment and a healthy economy (Primary Directive #2).
This criticism has now climbed the steep steps leading to the Federal Reserve’s front door. And if you put your ear up to it you can hear nervous whispering among the reserves board of governors wondering whether it’s time for a big change in course. Money for the people, not just for pumping up member banks.
The first article puts the issue in “plain talk.” The second article is an interview with Nobel Prize winning economist Paul Krugman and the third article is really reserved for economic “wonks” who enjoy reading insider treatises.
Article #1: “The Financial Instrument That Could Save the Economy – and Why It Hasn’t.” Ellen Brown, Chairman, Public Banking Institute Click here.
Article #2: Video of Bill Moyers interviewing Nobel Prize winning economist Paul Krugman on “Why jobs come first.” Click here.
Article #3: “Discussion of Crunch Time: Fiscal Crises and the Role of Monetary Policy” by Federal Reserve Governor Jerome H. Powell, Click here.