What to Read on Ron Paul

Ron Paul: The Alternative Candidate Is a Force to Be Reckoned With — Joel Achenbach

He’s 76 — the only one in the race who was born during the Great Depression.

He’s by far the most radically anti-government candidate in the running. He’d boil the federal government down to a few, skeletal functions. He’d end the welfare state, cut every dime of foreign aid, halt overseas military action and bring home all the troops. He’d return to the gold standard and abolish the Federal Reserve.

Paul opposes not only recent government shenanigans but also stuff that happened 50 or 70 or 90 years ago, such as the creation of Medicare (1965), Social Security (1935) and the federal income tax (1913). He’s against national banks, the first of which was the handiwork of Alexander Hamilton in 1791.

Paul believes that powerful and secretive forces (the Fed being the best example) have manipulated human events and bankrolled wars. He fears that the nation is turning into an Orwellian police state.

He’s a stalwart opponent of the USA Patriot Act and regularly condemns post-Sept. 11 security measures, as well as the wars in Iraq and Afghanistan.

From modest ­beginnings he became a highly successful obstetrician/gynecologist, delivered about 4,000 babies, became the patriarch of a sprawling family and was elected to Congress 12 times.

He bemoans the decline of the dollar and blames the printing of money “out of thin air.”

He’s not a dealmaker and is not interested in forging bipartisan compromises.

When someone…asked him what he’d do to overcome the partisan divide in Congress, he said the gridlock was a blessing. […] In his view, the moderates are the most dangerous people in Washington.

G.O.P. Monetary Madness — Paul Krugman

[Ron] Paul…fiercely [opposes] the kind of monetary expansion [Milton] Friedman claimed could have prevented the Great Depression — and which was actually carried out by Ben Bernanke this time around.

After Lehman Brothers fell,…the monetary base more than tripled in size.

[Ron Paul was] sure about what would happen as a result: There would be devastating inflation.

So here we are, three years later. How’s it going? Inflation has fluctuated, but, at the end of the day, consumer prices have risen just 4.5 percent, meaning an average annual inflation rate of only 1.5 percent. Who could have predicted that printing so much money would cause so little inflation? Well, I could. And did. And so did others who understood the Keynesian economics Mr. Paul reviles.

And what will happen if [Ron Paul’s] doctrine actually ends up being put into action? Great Depression, here we come.

The Presidential Candidates on Taxes — Citizens for Tax Justice

A proposal that anti-tax radicals call a “Fair Tax” is basically a national sales tax that replaces all other federal taxes. …in order to maintain current revenue levels, this sales tax would have to be around 50 percent. It is also very regressive. Low-income households would pay more for everything they buy, while the wealthy would hit the jackpot with tax-free capital gains, dividends and interest. We are fairly confident that this proposal will go nowhere when people realize that a house that costs, say, $200,000 would cost $300,000 under this plan.

[Ron Paul has] expressed support for the “Fair Tax” proposal.

[Ron Paul is] in favor of abolishing the Internal Revenue Service. It’s not entirely clear who would administer the national sales tax [he supports] if there was no IRS.

Republican Debate Reality Check Shows Misfire — Bloomberg News

…Ron Paul saying he would close the Department of Interior in addition to [the Departments of Commerce, Education, and Energy.]

Why Libertarianism Fails in Health Care — Ezra Klein

…CNN’s Wolf Blitzer asked whether an uninsured 30-year-old who had chosen to go without insurance should be left to die if he falls unexpectedly ill. Ron Paul dodged the question. “What he should do is whatever he wants to do and take responsibility for himself,” Paul said. “That’s what freedom is about.” Blitzer pressed the issue. “But, Congressman, are you saying the society should just let him die?” “Yeah!” whooped the crowd. But Paul stammered out a “no.”

House Conservatives Contradict Themselves on Tax Increases — Suzy Khimm

[In November, Ron Paul and 71 other Republicans] sent a letter to the debt-reduction supercommittee that urged them to rule out any tax increases whatsoever as part of the deal…

But just two weeks [earlier, he was] among the 100-plus House members who signed a “go-big” letter that asked the supercommittee to keep everything on the table, including revenues.

Why Ron Paul Challenges Liberals — Matt Stoller

…while old newsletters bearing his name showcase obvious white supremacy, he is also the only prominent politician, let alone Presidential candidate, saying that the drug war has racist origins. You cannot honestly look at this figure without acknowledging both elements…

My perspective of Paul comes from working with his staff in 2009-2010 on issues of war and the Federal Reserve. Paul was one of my then-boss Alan Grayson’s key allies in Congress on these issues, though on most issues of course he and Paul were diametrically opposed. How Paul operated his office was different than most Republicans, and Democrats.

Paul’s office was dedicated, first and foremost, to his political principles, and his work with his grassroots base reflects that. Politics and procedure simply didn’t matter to him. My main contact in Paul’s office even had his voicemail set up with special instructions for those calling about HR 1207, which was the number of the House bill to audit the Federal Reserve. But it wasn’t just the Fed audit — any competent liberal Democratic staffer in Congress can tell you that Paul will work with anyone who seeks his ends of rolling back American Empire and its reach into foreign countries, auditing the Federal Reserve, and stopping the drug war.

…when considering questions about Ron Paul, you have to ask yourself whether you prefer a libertarian who will tell you upfront about his opposition to civil rights statutes, or authoritarian Democratic leaders who will expand healthcare to children and then aggressively enforce a racist war on drugs and shield multi-trillion dollar transactions from public scrutiny. I can see merits in both approaches, and of course, neither is ideal. Perhaps it’s worthy to argue that lives saved by presumed expanded health care coverage in 2013 are worth the lives lost in the drug war. It is potentially a tough calculation (depending on whether you think coverage will in fact expand in 2013). When I worked with Paul’s staff, they pursued our joint end goals with vigor and principle, and because of their work, we got to force central banking practices into a more public and democratic light.

Marginalizing Ron Paul — Robert Scheer

[Ron] Paul marshaled bipartisan support to pass a bill requiring the first-ever public audit of the Federal Reserve. That audit is how [Americans] first learned of the Fed’s trillions of dollars in secret loans and aid given to the banks as a reward for screwing over the public.

…his is a rare voice in challenging irrationally high military spending. At a time when the president has signed off on a cold war-level defense budget and his potential opponents in the Republican field want to waste even more on high-tech weapons to fight a sophisticated enemy that doesn’t exist, Paul has emerged as the only serious peace candidate. As the Wall Street Journal reported, Paul last week warned an Iowa audience, “Watch out for the military-industrial complex — they always have an enemy. Nobody is going to invade us. We don’t need any more [weapons systems].”

Paul said: “Little by little, in the name of fighting terrorism, our Bill of Rights is being repealed…. The Patriot Act, as bad as its violation of the 4th Amendment, was just one step down the slippery slope. The recently passed [National Defense Authorization Act, would allow the president to order indeterminate military imprisonment without trial of those accused of supporting terrorism,] continues that slip toward tyranny and in fact accelerates it significantly…. The Bill of Rights has no exemption for ‘really bad people’ or terrorists or even non-citizens. It is a key check on government power against any person. This is not a weakness in our legal system; it is the very strength of our legal system.”

Reader Requests: Is the Fed Really That Stupid?

In response to my op-ed on the Federal Reserve, a reader says: You claim that banks are not lending due to non-creditworthiness of potential customers. I say they don’t lend because they really don’t have to anymore because the Fed pays them interest on their reserves. That translates to unprecedented interest spreads on the loans that they do fund, as well as unreasonably low interest rates paid to depositors, many of whom are retired and rely upon bank interest for much of their income. In addition, these super-size banks are holding onto bad mortgages and not refinancing them as they are supposed to do. They would rather foreclose or wait until the market gets better so they can make more money on them. Also, what about TARP, which was supposed to get these bad properties off the banks’ books in order to strengthen their capital financial strength? The banks kept the bad assets, and the Treasury gave them money to boot.

The Fed pays 0.25% interest on reserves. In a healthy economy, banks should have no trouble finding borrowers who will generate a higher return than 0.25%. As you said, borrowing at 0.25% from the Fed “translates to unprecedented interest spreads on the loans that they do fund.” That’s an incentive to make more loans, not fewer. The problem is finding creditworthy borrowers. Remember, banks don’t need to lend the excess reserves from the Fed if they find creditworthy borrowers. They can find cash elsewhere. Interest on excess reserves isn’t holding them back.

I completely agree with your second point, re bad mortgages, refinancing, and TARP. However, most of these problems don’t fall under the Fed’s purview. TARP was a terrible deal for taxpayers, but it was administered by the Treasury, not the Fed. It also falls outside the purview of my op-ed, which was supposed to address actions taken during the recovery, not the recession.   Continue reading “Reader Requests: Is the Fed Really That Stupid?”

Don’t Blame the Fed for Holding Back the Recovery

Rick Perry must not spend much time in banks.

How else can you interpret his accusation that Ben Bernanke, the Chairman of the Federal Reserve, “is almost treasonous” for “printing money”?

He must think that banks spend every dollar they get from the Fed. He must think that banks depend solely on the Fed for funding. Because that’s the only way that “printing money” — if that’s even what you could call what the Fed does — could result in any damage for the United States.

Rick Perry lives in the Bizarro World of Banking.

Here on Planet Earth, U.S. banks are holding $1.6 trillion in excess reserves. That’s $1.6 trillion that they’re not spending or loaning or investing. It’s just sitting there. Not doing anything for the economy.

Just to give you a little context, before this recession, excess reserves had never been higher than $20 billion.

In other words, most of the money that Perry is so angry about is just minding its own business. Nobody is spending it. Nobody is borrowing it. It’s not contributing to inflation or the depreciation of the dollar. It’s not eroding your purchasing power.   Continue reading “Don’t Blame the Fed for Holding Back the Recovery”