Identity Crisis: So who exactly are the Libertarians?
“Rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others.”
“Rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others.”
SUMMARY: Tom Vendittelli, candidate for Congress in New York’s 13th Congressional district, rips apart the recently-passed financial reform bill.
This week the U.S. House of Representatives passed a financial “reform” bill. Unfortunately, the bill will do nothing to avoid a future financial collapse, because it does not address the core problems of our economic system.
The legislation that has passed the House this week is only distracting and, ultimately, further destructive to our already fragile economy. If we want to be serious about financial reform in this country, we need to concern ourselves with the Federal Reserve. As long as we have a bank that operates outside the oversight of the people’s representatives in Congress, and which acts as a lender of last resort for banks and politicians, we can expect more of the same.
The Federal Reserve Bank acting as a lender of last resort is what creates the moral hazard that makes excessive risk seem so appealing. When there is a Federal Reserve that will create credit out of thin air for a “too big to fail” bank, there is no real risk of failure. The only real risk is the public anger that arises when average Americans realize they have been swindled by politically-connected organizations in collusion with their supposed “representatives” in Congress.
Artificially low interest rates set by the Fed under Alan Greenspan caused massive over-investment in housing and other sectors of our economy, which resulted in a bust that really signaled the end of an economic era. Under the new financial reform bill, the Fed will be further empowered, with even greater oversight and influence over the economy than they already possessed.
Considering the Fed was in no small part responsible for the bad investment and excessive risk that led to the collapse of our economy in 2008, why are they now being given even greater powers? This is akin to having the fox guard the hen house. To make matters worse, in an act of brazen mass hypocrisy, 114 Congressmen who had previously cosponsored legislation to audit the Federal Reserve (H.R. 1207), voted to strip the audit out of the financial reform package at the last minute. So much for oversight.
If we want true financial reform, for the sake of our freedom and liberty, we need to examine the Federal Reserve in depth and find out what they are doing behind closed doors. This week the United Nations announced that they should dump the dollar as a world reserve currency because it has been “unable to safeguard value.” A move like this would have direct negative consequences on the value of our currency. This is yet another signal that the Fed has failed, with disastrous results not only to the economy at large, but to our personal finances as well.
The Federal Reserve, at best, didn’t see the collapse coming; at worst, they are in collusion with some of the most powerful money interests in the world. Neither is a situation that warrants giving them greater influence over the economy.
This huge mistake of a bill is now moving onto the Senate. If anything, this has been instructive, as it shows us exactly whom the politicians in Washington work for. Rather than grant greater powers to the Federal Reserve, it is time to declare the 100-year experiment in American central banking to be a dismal failure, and return to the sound money of our Constitution. The future of freedom and prosperity demands it.
[The author, Tom Vendittelli, is a candidate for Congress in New York’s 13th district. This is the first of a three part series on financial reform.]
According to figures released today by the Commerce Department, Americans have experienced a 2% price increase in the last three months. Without accounting for food and energy prices, inflation is at an overall 1.3 % in the last three months. Interestingly, when looking at food and energy prices, we see there has been a price increase of 18.7 % when viewed against March of 2009. This means you are paying almost a fifth more for food and energy from last year.
What does all of this mean? For one, it means the cost of living is on a sharp rise. It would normally be hard to explain in a weakened economy how we are seeing such a sharp rise in prices. People are spending less overall than they were in previous years, as many struggle with the effects of a down economy. This should have the effect of lowering prices and the cost of living, and it would, if not for the inflation factor.
Many in the mainstream like to define inflation as a rise in prices. This assessment ignores the cause and identifies the symptom. Inflation is more accurately defined as an increase in the supply of money. As laws of supply and demand dictate, when there is more money competing for the same amount of goods, prices rise. So we actually see rising prices as a result of inflation. Simply put, the Federal Reserve, our nation’s central bank, prints more money, and we in turn have to pay more to feed our families, heat our homes, and fuel our vehicles.
This is by no means a new phenomenon in American history. Since the Federal Reserve bank opened for business in 1914, the dollar has lost 95% of its value. This is a confusing track record for a “quasi-government” agency who is mandated to maintain low inflation and stable prices. All Americans can likely attest to the fact that cost of living is on the rise, while wages struggle to keep up, if they keep up at all. For many Americans, jobs have been lost and wages have actually decreased as part of employer austerity measures. Small businesses are disappearing. How are Americans supposed to keep up with the harmful effects of inflation, such as an 18.7% price increase in food?
The truth is, though the Federal Reserve might be inflating the currency, (printing more money), so they can bail out Wall St. and help our government fund trillion dollar wars and entitlement programs without raising taxes, the people who are harmed most by inflation are the poor and middle class. Whereas a wealthier family might not have a great deal of trouble adjusting spending habits to accommodate a 20% price rise in food, a family with a strict budget or on a fixed income might now find themselves unable to meet their other monthly obligations. A family in the lowest income brackets might find themselves suddenly unable to make ends meet. This family may be confused, and rightly so, as they haven’t lived more extravagantly – they just find the prices to provide for daily needs have skyrocketed. Such are the hidden and insidious effects of inflation. Inflation is nothing less than a hidden tax on the people, harming those most vulnerable in our society.
Inflation also punishes people who save and invest by diluting the value of the dollar. Why should you save your money in a bank account, likely bearing under 1% interest, when through inflation, the dollar is becoming less valuable? If you save money, you literally lose money. Americans find themselves in a situation of spend, invest, or lose money. The higher the rate of inflation, the faster money is being devalued. At what point does even the wisest of investments fail to keep up with inflation? Through a reckless Federal Reserve monetary policy, we can only expect inflation to be on the rise.
Even more startling than the 18.7% price increase reported by the Commerce Department today are the numbers that show the United States money supply, M3. These figures are no longer published by the Federal Reserve on their website, perhaps because they are “the best description of how quickly the Fed is creating new money and credit”, according to Congressman Ron Paul. According to Shadowstats.com, a website which still estimates M3, in the below chart, you will see M3 hit 18% between 2009 and 2010. Meaning, the total money supply was at times increasing by 18+% monthly. It has been estimated that the monetary base has more than doubled through Fed action. Although inflation can be unpredictable in proportion to the money supply, it can come as little surprise that we have experienced an almost 19% price increase between this year and last year.