[sigh] There have been a number of films and books which try to educate the masses about our national finances. The audience I sat with, though modest in number, really tried to concentrate and learn something from this particular exercise.
One overpowering question that popped into my mind as I watched: "Did the Fed itself produce this as a self-serving propaganda piece?" Whatever mistakes the Fed made - concerning, for example, its reaction to the 2008 meltdown due to the housing bubble - were explained away mainly along these lines: "Oh, mistakes were made because, even though correct theoretical options had been known in advance, the fed had decided instead to operate based on principles they were more comfortable with." That, coupled with a tendency of the Fed's board to vote in lockstep with whomever happens to be their current chairman, made this abundantly clear (at least to me):
Congress has to be ultimately responsible for decisions such as whether to adjust the prime interest rate and is abdicating its authority by pushing it off on this so-called independent operating agency. Throughout the entire movie, there is absolutely no case made in favor of abolishing the fed or intervening in its affairs, nor is even any proposal for a Congressional audit mentioned. The only scene (exactly one) that came close showed Ron Paul at a GOP function saying (without the film bothering to give any of the details of his arguments) that the Fed ought to be abolished. So you could say, "This film featured a cameo appearance by Ron Paul."
And there were no other dissenting voices to be heard proposing that the Fed be abolished or perhaps be subjected to Congressional overview or even an audit. Perhaps Congress should insist on full input of all of the deliberations of the Fed, as they occur, with access to whatever source materials the Fed backs up its decisions with.
And just in case you think the Fed isn't really that important, check out this partial mission statement:
QUOTE [http:/en.wikipedia.org/wiki/Federal_Reserve_System:
[The Federal Reserve System's] duties have expanded over the years, and today, according to official Federal Reserve documentation, include conducting the nation's monetary policy, supervising and regulating banking institutions, maintaining the stability of the financial system and providing financial services to depository institutions, the U.S. government, and foreign official institutions.
:UNQUOTE.
The Fed is too closely aligned with the interests of the banking community, which did not (for instance) want to see the highly-lucrative derivatives market regulated. That reminded me of the SEC failure to investigate the Bernie Madoff Ponzi scheme even though they had been contacted (for years!) by a man with solid evidence. This is the opening of a very good wikipedia article:
QUOTE [source: http://en.wikipedia.org/wiki/Harry_Markopolos ]
Harry M. Markopolos (born October 22, 1956) is an American former securities industry executive and an independent forensic accounting and financial fraud investigator investigator.
Markopolos discovered evidence over nine years suggesting that Bernard Madoff's wealth management business, Bernard L. Madoff Investment Securities LLC, was actually a massive Ponzi scheme. In 2000, 2001, and 2005, Markopolos alerted the U.S. Securities and Exchange Commission (SEC) of the fraud, supplying supporting documents, but each time, the SEC ignored him or only gave his evidence a cursory investigation. Madoff was finally uncovered as a fraud in December 2008, when his sons contacted the Federal Bureau of Investigation. After admitting to operating the largest Ponzi scheme in history, Madoff was sentenced in 2009 to 150 years in prison. In 2010, Markopolos's book on uncovering the Madoff fraud was published, titled No One Would Listen: A True Financial Thriller.
:UNQUOTE.
To this day, no heads have rolled at the SEC for their massive failure to follow up on Markopolos's charges. Frankly? I would call that not only collusion within the SEC but also collusion within the Obama administration itself. If the regulators don't, can't, or aren't competent enough to regulate, then we'll always be at the mercy of those financial manipulators who are all too willing to game their system. And their power is growing by leaps and bounds as the financial sector as a "contributor" to the national economy continues to post gains over services and manufacturers.
Sure, we'll continue to be treated to Congressional hearings featuring mouthpieces for the bankers. We'll see stern-faced legislators grilling industry representatives as to why things went south so badly. But what we won't see is any move for Congress to take direct responsibility as spelled out in Article I, Section 8 of the Constitution from which I'll now quote selectively with my comments in brackets:
QUOTE:
The Congress shall have power...to pay the debts and provide for the...general welfare of the United States...
[Instead of the word "power," I wish the word "obligation" would have been used instead. However, I don't think We-the-People will, for much longer, tolerate a Congress that had the "power" but didn't use it. And We won't tolerate an excuse like, "We in Congress delegated that power to regulate the banking system." During the Day of Reckoning, We will be asking Congress, "Why didn't the buck stop at your desks?" In order for the "power...to pay the debts" to have any meaning, debt payments cannot be forever delayed. For doing that actually harms the "general welfare of the United States."]
To borrow money on the credit of the United States;
[The unsupervised (by Congress) power of the Fed to increase or decrease the USA's money supply by its own machinations makes a mockery of Congress's power to "borrow money." For any amount Congress wishes to borrow could be reduced or increased in value depending on those machinations.]
To regulate commerce with foreign nations, and among the several states...;
[The actions of an uncontrolled, unaudited, unaccountable Fed reduce the power of Congress to regulate this commerce.]
To establish...uniform laws on the subject of bankruptcies throughout the United States;
[How are bankruptcy laws "uniform...throughout the United States" if some enterprises are allowed to be bailed out at taxpayer expense because they're deemed "too big to fail?" Sounds to me like any enterprise that big was allowed to get that big by a Congress that failed to legislate or regulate appropriately.]
To coin money, regulate the value thereof, and of foreign coin...;
[Congress should never have been allowed to delegate its authority to "regulate the value thereof" to an unaccountable and independent Fed. That's too similar to another power Congress has chosen to delegate - the option of making war if, in the judgment of the President, that's what ought to be done. Only Congress has the power to declare war.]
To make all laws which shall be necessary and proper for carrying into execution the foregoing powers...
[One would hope that any laws that avoid "carrying into execution" (because Congress chose to abdicate its authority) would be considered unconstitutional. Some would argue that Congress simply can't be bothered with the day-to-day governance of our financial system. However, that's where my two plans come in, detailed in links immediately following this QUOTE.]
:UNQUOTE.
The aforementioned links
This link includes a section called "My vision for a Streamlined Congress":
http://ind4prez2012.blogspot.com/2011/04/long-arm-of-law.html
http://ind4prez2012.blogspot.com/2011/09/pro-democracy-amendment.html :This link includes Section 4 of my Pro-Democracy Amendment:
QUOTE:
Section 4.
If a legislator, at any place or time, publicly declares his vote in favor of any measure pending or not-yet-introduced in his legislative body, his vote shall be considered valid toward passage, unless he should publicly withdraw his vote prior to passage. If the number of legislators making such publicly-declared votes in favor of any particular measure exceeds half the number of legislators in that body, the measure shall be deemed to have been passed by that body.
:QUOTE.
Some questions inspired by the film
- Why can't we borrow all we want? I'm sure a lot of average voters, unschooled in finance, wonder if there is really any upper limit to how much debt we can absorb. More than that, suppose there is such a limit, we violate it, and all hell breaks loose. I'm sure many of these same voters, at least in the backs of their minds, are thinking: "Since the USA has the strongest military in the world, couldn't we simply use that force to impose our will on the rest of the world should the financial system collapse due to our own excesses?" The answer to that question, of course, is a resounding "Yes!"
- What if the Fed and Congress hadn't intervened during the 2008 housing bubble crisis? There was vague and overgeneralized talk about how intervention prevented a crisis of profound and international proportions. But did it really, at least compared to what will happen because we still haven't fixed any of the underlying problems? I would like to see a doc film showing what could have happened if the government or the Federal Reserve System (not the same thing, by the way) hadn't intervened. My personal view? Future events will show that we would have had a net gain if we'd allowed our financial system to take the hit it deserved due to its own irresponsible actions.
Ah, yes. Herman Cain. Former candidate for the GOP nod to face Barack Obama in 2012. He of the sex scandals, which made him the butt of a lot of late-night comedians' jokes. Maybe I'm a simple man - too simple - but I can't help but shake the feeling that much of what we need to know about the Fed could determined if we could answer one simple question:
How on earth did an idiot like Herman Cain manage to become chairman of one of the 12 Federal Reserve Banks?
QUOTE [http://en.wikipedia.org/wiki/Herman_Cain:
Cain served as Chairman of the Board of the Federal Reserve Bank of Kansas City Omaha Branch from January 1, 1989 to December 31, 1991. He became a member of the board of directors of the Federal Reserve Bank of Kansas City in 1992. He served as deputy chairman from January 1, 1992 to December 31, 1994, and then as its chairman until August 19, 1996, when he resigned to become active in national politics.
:UNQUOTE.
Afterword
Today, I'm going to see yet another doc film concerning the larger financial picture - this one called Inequality for All. It got a pretty good write-up on Rotten Tomatoes at http://www.rottentomatoes.com/m/inequality_for_all_2013/
Hopefully, I'll be joined by legions of the USA's citizens who are as profoundly ignorant of finance as I am and, together, we will try to march forward, however gradually, toward a more complete understanding of this subject.
As a side note: One source that I found succinct, revealing, and very readable is the (gasp!) book by Matt Taibbi bearing this intriguing title:
Griftopia:
Bubble Machines, Vampire Squids,
and the Long Con That Is Breaking America
* * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Steven Searle, former candidate for US President (in 2008 and 2012)
Founder of the Independent Contractors' Party
"Educate yourself now or pay the price later" - Steve.
Contact me at bpa_cinc@yahoo.com
