Jordy Blog

Federal Reserve: Financial Overlords

Check Baldwin was the Constitution Party’s 2008 presidential nominee. I voted for him because he is so dead right on so many issues. Here’s one of them:

President And Congress Grovel Before The Fed
By Chuck Baldwin
February 10, 2009

This column is archived at
http://www.chuckbaldwinlive.com/c2009/cbarchive_20090210.html

According to Bloomberg News (Monday, February 9, 2009), “The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages.

“The Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation have lent or spent almost $3 trillion over the past two years and pledged up to $5.7 trillion more. The Senate is to vote this week on an economic-stimulus measure of at least $780 billion. It would need to be reconciled with an $819 billion plan the House approved last month.

“Only the stimulus bill to be approved this week, the $700 billion Troubled Asset Relief Program passed four months ago and $168 billion in tax cuts and rebates enacted in 2008 have been voted on by lawmakers. The remaining $8 trillion is in lending programs and guarantees, almost all under the Fed and FDIC. RECIPIENTS’ NAMES HAVE NOT BEEN DISCLOSED. [Emphasis added]

“‘We’ve seen money go out the back door of this government unlike any time in the history of our country,’ Senator Byron Dorgan, a North Dakota Democrat, said on the Senate floor Feb. 3. ‘Nobody knows what went out of the Federal Reserve Board, to whom and for what purpose. How much from the FDIC? How much from TARP? When? Why?’”

Senator Dorgan is exactly right. No one oversees the Fed. The Fed is held accountable to absolutely nobody. But Senator Dorgan (as with everyone else in Congress) has no one to blame but himself. Ever since the Marxist, E. Mandell House, convinced President Woodrow Wilson to create the Federal Reserve in 1913, the Congress of the United States has had virtually nothing to do with the way our fiscal policies are managed. The Fed (which is not even a government agency, but rather a private corporation consisting of mostly foreign bankers) dictates America’s financial policies.

The reality of just how our civil magistrates have come to grovel before the Fed was revealed in a column written recently by Cal Thomas. Mind you, Cal was not trying to castigate President Bush in his column. Just the opposite: his column was full of praise and adulation for the former President. In recounting his last interview with President George W. Bush, however, Cal unwittingly revealed the almost limitless power that the Fed wields over even the President of the United States.

Here is what Cal wrote: “Bush defends himself against a charge by a member of the Republican National Committee that he has behaved like a ’socialist’ because of his massive bailout spending. He [Bush] says he still believes in less government spending, but when Henry Paulson, secretary of the U.S. Treasury, and Ben Bernanke, chairman of the Federal Reserve, tell him that if he doesn’t act, the result will be worse that the Great Depression, ‘you can sit there and say to yourself, “well, I’m going to stick to principle and hope for the best, or I’m going to take the actions necessary to prevent the worst.”‘”

In other words, when the Fed says, “Jump!” the President asks, “How high?” And, with the exception of Congressman Ron Paul of Texas (and maybe one or two others), the same is true for members of the House and Senate.

In other words, ladies and gentlemen, America is being run by a private banking cartel, the majority of whom are not even citizens of these United States.

Ever since the Fed was created in 1913, America has been subjected to recession after recession, not to mention one Great Depression. Some are even predicting that the United States is now actually entering a second Great Depression. Please understand this: the Federal Reserve has manipulated every bit of this financial crisis for the express purpose of enriching the international bankers on the backs (and bankruptcies) of the American taxpayers. And what does our illustrious Congress do? They continue to give billions and even trillions of taxpayer dollars to the very same group of gangsters who created and perpetuate this financial fraud. And, as with Congress, Presidents from both major parties likewise promote and defend this chicanery.

Yet, the U.S. Constitution, in Article. I. Section. 8. Paragraph. 5., clearly gives Congress the authority “To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.”

This constitutional requirement makes two obvious demands: 1) only the elected Congress, not some private foreign (or even domestic) banking interest, has the power to make monetary policy, 2) U.S. currency must be hard currency, i.e. gold and silver. Paper money–known as the Federal Reserve Notes–is not even legal tender under the U.S. Constitution.

In truth, the Federal Reserve Act of 1913 is itself unconstitutional. In simple terms, the Act did not amend or expunge Article. I. Section. 8. Paragraph. 5. of the Constitution; it merely ignored it. (And Congresses and Presidents have been ignoring the Constitution ever since.)

In fact, Article. I. Section. 10. Paragraph 1. of the U.S. Constitution specifically states, “No State shall . . . coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts.”

Can anyone not see that the Federal Reserve is an illegitimate system? I will even go so far as to say that the Federal Reserve should be regarded as a corrupt, criminal system! If I were President, not only would I do everything in my power to oppose any and all financial bailouts to these international banksters, I would instruct the Justice Department to pursue criminal charges of fraud, corruption, manipulation, and outright thievery against the Fed. Instead of padding their fat assets in a million-dollar penthouse, they should be serving most of the rest of their lives in the Big House.

In the meantime, Congressman Ron Paul has again introduced a bill in the House of Representatives to terminate the Federal Reserve. It is H.R. 833: To abolish the Board of Governors of the Federal Reserve System and the Federal reserve banks. The Bill was introduced on February 3 and, to date, has no cosponsors. That’s right. No cosponsors.

Until the American people demand that their elected members of Congress live up to their duties and responsibilities under the Constitution, they will continue to have their pockets picked clean by these corrupt banksters in New York City (and London) and their contemptible facilitators in Washington, D.C. Passing Dr. Paul’s bill would be a great place to start.

*If you appreciate this column and want to help me distribute these editorial opinions to an ever-growing audience, donations may now be made by credit card, check, or Money Order. Use this link:

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(c) Chuck Baldwin

If you don’t understand the history and the motives of the Federal Reserve System, you need to get informed. I believe that your very freedom depends on it.

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Economic Woes: Understanding the Cause and the Cure

Robert Lefevre observed that “Government is a disease that masquerades as its own cure.“

Obama’s “Economic Stimulus” package, like Bush’s and Bernanke’s banking bailouts, typify this statement. No sooner is the economic knife twisted in on our belly than our haggardly assailant disappears into the night. Immediately our saviour appears, riding on his white horse and swearing revenge. But how did he get here so fast?

Obama’s Economic Stimulus Package

Let’s just look at the Obama’s so called “economic stimulus” package logically.

Was our current economic situation really caused by a lack of green energy? Did we really just not have enough STD prevention education? Was it all this really because we didn’t have enough high speed internet in rural areas? Was it because our current highway system is inadequate? Did we just not have enough food stamps?

If none of these problems were part of the underlying problem, how does fixing them constitute a solution? Yet that’s literally what we’re being billed. Government simply changes out the labels in its pork processing plant, and all-of-a-sudden we can’t get enough. In government, just re-brand whatever your selling as “Economic Relief”, “Stimulus Package”, or “Cure to Whatever Happens to Ail You Today”, and it’s bound to sail right through.

Sure, there’s much more to Obama’s “Economic Stimulus” plan than funding STD prevention education, but it’s all crap because it all ignores the recessions’ underlying causes. Even the tax cuts are crap because, just like the Bush tax cuts, there is no associated cut in spending. In fact, to say that we’re getting quite the opposite of spending cuts is a remarkable understatement.

Cutting taxes without cutting spending requires either inflation or debt. The former (like taxation) steals from current citizens, while the latter steals from future citizens. Both payment vehicles are immoral. Should income taxes be decreased or even eliminated? Absolutely. But the only lasting way that government can stop stealing the wealth of its citizenry is to stop spending it!

Our Current Recession: the Cause and the Cure

If we really want to fix our economic problems, we need to fix them at the cause. But remarkably few people understand the cause –and that’s what makes us so vulnerable to government deception.

To understand the cause and the cure of our current recession, shouldn’t we look to the people with proven track records –you know, the people that actually foresaw the current crisis before it happened? Remarkably, the solutions offered by people like Peter Schiff and Ron Paul –people who were dead right about the economy even before the bubble burst– are still being relatively ignored. The alternative approach: what our economy really needs is more people teaching kids how to use condoms. Good grief!

If you want to understand the cause of recession, as well as its cure, Ron Paul says it pretty succinctly:

Cures for Our Economic Disease

I have recently had several opportunities on various news programs to discuss the economy and what is wrong with the so-called economic stimulus package. I have said over and over what we shouldn’t be doing, and now I’d like to explain what we should be doing.

But to improve the situation, you must first have a solid grasp of how we got here. Government policies and central planning created the housing bubble, now going bust. About a decade ago the government made expanded homeownership and affordable housing a public goal. Through Fannie Mae, Freddie Mac and the secondary mortgage market the government incentivized creative, low down-payment, more widely available mortgage products, and discouraged the market-proven lending standards of the past. The Federal Reserve kept interest rates artificially low, which added more fuel to this fire. Many related sectors temporarily flourished because of this, and many people got into homes they otherwise could not have afforded. The increased demand for housing sent prices soaring until in many markets housing became even more unaffordable, necessitating even more creative mortgages, and impossibly leveraging homeowners. Many risky investment vehicles such as mortgage-backed securities, derivatives, credit default swaps grew out of this unsustainable situation. As the foreclosures began, the house of cards started to tumble. Too many people have confused the symptoms and the pain of the bust with the problematic policies that caused the bubble, which is really what needs to be treated.

First of all, just as the best cure for a hangover is not to drink so much, the best cure for a recession is a recession. It is time to sober up and return to free market sanity, risk and reward, supply and demand, without political intervention. Politicians are good at catering to the needs of special interests, but very bad at determining what needs to take place in the market. Government should stick to punishing fraud and enforcing contracts. When they use the tax code, bureaucratic departments and their manipulative rules and regulations to dictate social and economic behavior, we end up with distortions and malinvestments. Bailing out banks, continuing failed Fed policies and strapping the taxpayer with toxic debt will worsen the pain, and punish the innocent.

If Congress really wanted to do something helpful, it would cut taxes. Ideally, we would repeal the income tax altogether and get the IRS off the economy’s back, which would be a huge boon. We should also cut spending. Cut every unconstitutional department and program, every wasteful governmental encroachment on the people’s liberty and money, starting with our massive overseas empire. The cost of our empire is bringing us to our knees, just as the Soviets’ empire did to them. Congress should also abolish the Federal Reserve and take back its responsibilities to ensure sound money, safe from the manipulations of powerful banking interests.

These things would constitute real change, real economic stimulus. The plans being bandied about Washington are just more of the same. As long as no one seriously considers the cure, we are unfortunately destined to prolong the disease.

There it is, refreshingly simple.

Now that we’ve identified our assailants as big government and central banking, maybe we can go after them! Or wait, here come a couple brave knights who seems more than willing to do that for us. Hold on a second… Don’t we know you?

Debauching the Currency

I really like Glenn Beck when it comes to the economy:

This uncontrolled spending (and it’s underlying debasement of the currency) may well destroy us.

Inflation, as a means of overthrowing the free market:

Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens … Lenin was certainly right. There is no subtler, no surer means of over-turning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose. – John Maynard Keynes (via quoty)

Inflation, as a means of overthrowing our nation and our liberties:

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] 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. – Thomas Jefferson (via quoty)

Sadly the “change” mantra was nothing more than a seductive lie, because when it comes to the policies of spending and inflation, Comrades Obama and Bush (not mention McCain) are exactly the same.

Meet the new boss. Same as the old boss. :(

Republican Party Bones Up?

Now we’re talking:

EXCLUSIVE: RNC draft rips Bush’s bailouts
Ralph Z. Hallow (Contact)

Republican Party officials say they will try next month to pass a resolution accusing President Bush and congressional Republican leaders of embracing “socialism,” underscoring deep dissension within the party at the end of Mr. Bush’s administration.

Those pushing the resolution, which will come before the Republican National Committee at its January meeting, say elected leaders need to be reminded of core principles. They said the RNC must take the dramatic step of wading into policy debates, which traditionally have been left to lawmakers.

“We can’t be a party of small government, free markets and low taxes while supporting bailouts and nationalizing industries, which lead to big government, socialism and high taxes at the expense of individual liberty and freedoms,” said Solomon Yue, an Oregon member and co-sponsor of a resolution that criticizes the U.S. government bailouts of the financial and auto industries. Republican National Committee Vice Chairman James Bopp Jr. wrote the resolution and asked the rest of the 168 voting members to sign it.

I hope this resolution passes. It would be a clear sign (to me) that the Republican party is worth saving.

Selective Constitutionalism

I don’t do this very often; but this article by Chuck Baldwin, the Constitution Party’s presidential nominee, is so good that I decided to re-post it in its entirety:

Selective Constitutionalism
by Chuck Baldwin
December 9, 2008

Many conservatives are up in arms regarding the charge that President-elect Barack Obama may not have been born in the United States and is, therefore, not qualified under the U.S. Constitution to be President of the United States.

Article. II. Section. 1. of the U.S. Constitution states, “No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President . . . .” Some accuse Mr. Obama of not being born in the State of Hawaii as claimed, but in Kenya, Africa. Several people have filed various lawsuits challenging Mr. Obama’s U.S. citizenship.

Historically, “natural born Citizen” has always been understood to mean someone born in the United States of America. If Barack Obama was not born in the United States, he is absolutely unqualified to be President. Hawaii’s secretary of state says Obama was indeed born in that state. However, to date, Obama’s actual birth certificate has not been publicly released, which only serves to add fuel to the accusations that he was not born in Hawaii.

Many conservatives seem to be obsessed with this controversy, calling it a “constitutional crisis.” The fact is, however, we have been in a “constitutional crisis” for years! The problem is, most conservatives only get worked up over a potential abridgement of constitutional government when it serves their partisan political purposes. In other words, when a Democrat appears guilty of constitutional conflict, conservatives “go ballistic,” but when Republicans are equally culpable of constitutional conflict, they yawn with utter indifference.

For example, the one man who has the notoriety and political clout to actually bring about some meaningful investigation and resolution to the Obama citizenship brouhaha is none other than Senator John McCain. After all, he was Obama’s principal opponent in the race for the White House. Plus, as the standard-bearer for the only other major political party, he has the attention of the national media, as well as the national legislative and judicial branches of government. So, why is John McCain not at all interested in the Obama citizenship issue?

Perhaps one reason that John McCain is so uninterested in where Barack Obama was born is because he, John McCain, was not born in the United States. He was born in the country of Panama. So, let me ask readers a question: Does anyone believe if John McCain had been elected President instead of Barack Obama that any notable conservative would have been distressed about a “constitutional crisis”? Get real!

Yes, I know McCain was born to a naval officer serving in Panama at the time. That fact changes nothing. John McCain was still born in a foreign country, and under a strict interpretation of the U.S. Constitution, is not qualified to be President of the United States. Even our current State Department policy (7 FAM 1100) reads: “Despite widespread popular belief, U.S. military installations abroad and U.S. diplomatic or consular facilities are not part of the United States within the meaning of the 14th Amendment. A child born on the premises of such a facility is not subject to the jurisdiction of the United States and does not acquire U.S. citizenship by reason of birth.”

Does anyone not remember the controversy surrounding the potential Presidential campaign of California Governor Arnold Schwarzenegger? Born in Austria, Schwarzenegger is a naturalized citizen of the United States and is now Governor of California. However, since Schwarzenegger is a naturalized citizen, but not a natural born citizen, he is considered unqualified to run for President.

But, again, most conservatives care little about the Constitution’s requirement that a President be a “natural born Citizen.” Like liberals, most conservatives are afflicted with a very debilitating disease that I call Selective Constitutionalism. They only want to apply constitutional government when it helps Republicans or hurts Democrats. Most of them really could not care less about adherence to the Constitution. If they did, they would have been up in arms for the last eight years as President George W. Bush repeatedly ignored–and even trampled–the U.S. Constitution.

Where were these “constitutional” conservatives when George W. Bush was assuming dictatorial-style powers and contravening Fourth Amendment prohibitions against warrantless searches and seizures? Where were they when Bush was ordering our emails, letters, and phone calls to be intercepted by federal police agencies without court oversight? Where were they when Bush was obliterating the Fifth and Eighth Amendments? Where were they when Bush overturned Posse Comitatus by Executive Order? Where were they when Bush dismantled the constitutional right of Habeas Corpus? Where were they when Bush lied to the American people about the invasion of Iraq and took the United States to war without a Declaration of War from Congress? Where were conservatives when Bush turned nine U.S. military installations over to the United Arab Emirates? Where were they when Bush ordered his Department of Transportation to open up America’s airlines to foreign ownership? Where were they when President Bush nullified (using “signing statements”) over 1,100 statutes he did not like? Where were they as President Bush and his fellow Republicans reauthorized one of the most egregiously unconstitutional pieces of legislation in modern memory: the USA Patriot Act? Where were they when Bush signed the blatantly unconstitutional McCain/Feingold Act? I could go on and on.

Ladies and gentlemen, the Republican Party has been just as culpable in violating constitutional government as the Democrat Party has–maybe more so! If the Republican and Democrat parties had any allegiance to the U.S. Constitution, neither John McCain nor Barack Obama would have been chosen as their respective Presidential nominees.

While we are on the subject, if anyone cared about constitutional government, Hillary Clinton (or any other U.S. Senator or House Member) would obviously be determined as ineligible to be given any appointment in the Obama administration under Article. I. Section. 6. of the U.S. Constitution. Why? Because the Constitution prohibits House or Senate members taking Presidential posts if the salary of the job they would take was raised while they were in Congress.

However, several past Presidents have skirted this constitutional prohibition (including Presidents Taft, Nixon, and Carter) by lowering the salary of the job back to what it was so the nominee could accept the job without receiving the pay increase that was approved while the appointee was in Congress. In fact, this sleight of hand actually has a political name. It is called “the Saxbe fix,” after Nixon’s appointment of Senator William Saxbe to be attorney general.

Do we have a “constitutional crisis”? You bet we do; but it is not limited to Barack Obama or the Democrat Party. The real constitutional crisis is the manner in which the American people have, for years, allowed civil magistrates from both major parties to routinely violate their oaths to preserve, protect, and defend the Constitution of the United States. God help us!

*If you appreciate this column and want to help me distribute these editorial opinions to an ever-growing audience, donations may now be made by credit card, check, or Money Order. Use this link:

http://www.chuckbaldwinlive.com/donate.php

© Chuck Baldwin

This column is archived as http://www.chuckbaldwinlive.com/c2008/cbarchive_20081209.html

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Ask Congress to Stop Socialist (Fascist) Bailouts

Today the US House of Representative is very likely to pass one of the most stupid pieces of legislation I have ever seen. They’re getting MAJOR pressure by the president, majority and minority leaders in congress, both major party presidential nominees, the Federal Reserve, and everyone else you can think of to pass an “emergency” bill that does NOTHING to help people stay in their homes.

Instead the proposed bill introduces liquidity into the market by purchasing garbage mortgage-backed securities from private companies, thereby socializing their risks while privatizing their profits. Warren Buffet described the derivatives we are to buy as financial weapons of mass destruction. Incidentally, they’re the same kind of stuff that brought Enron down, but do you see anybody going to jail from our current scandal? No, instead we reward them purchasing these bad assets at above-market prices.

Believe me, if these things had real value, the free market would be forking out the dough for themselves. Ask yourself, “Why in the world should you and I be forced to purchase ’securities’ that cannot sell on an open market?” It’s analogous to having congress force you to buy every car in the junkyard and then have the nerve to tell you it might actually be a good investment.

“But surely,” you ask, “people who are upside-down in their homes will finally get some much-needed relief?” Absolutely not! This bill does nothing for them –not that it should. But since the whole seductive point of socialism is supposedly to benefit the working class, you would think they would make some effort at it. This bill actually hurts upside-down buyers because it reduces their bargaining power by flooding the coffers of their debtors.

“You mean that congress might not be acting in our best interests?,” you ask.

The Center for Responsive Politics, a Washington nonprofit group that studies money and politics, reports that on average, lawmakers who voted in favor of the bailout bill have received 51 percent more in campaign contributions from sources in the finance, insurance and real estate industries.

Hmmm… Could congress possibly be acting in their own interests? Might those be directly opposite yours? One commenter hits it right on:

Why wouldn’t America, the greatest nation on earth, have the best congress money can buy?

This is especially true considering the sheer amount of pork added to the bill to insure that it passes in the house.

Wait, you thought the a motivated Senate might insuring passage by actually adding something substantive to the bill, or maybe cutting out some of it’s blatant threatening verbiage? Nope, too hard. Just throw on a bunch of tax-credits from a completely unrelated bill to make sure it has enough earmark grease to squeak through. Tax credits for green appliance manufacturers? That should get some Democrat votes. Oh NASCAR needs some tax credits? Republicans will like that. Tax rebates for Puerto Rican rum duties? Sure, throw it in. All of a sudden the bill is 451 pages of meaningless pork, which by the way our maverick hero John McCain swore to veto. Can you say double-speak?

Seriously, any house member who changes to an approval vote this time around has clearly been bought and sold. There are almost no differences whatsoever that relate to the main subject matter at all. Just more grease.

Want more?

This bill rewards companies that behaved foolishly (and probably dishonestly). It consolidates unprecedented power to the Federal Government, the Treasury, and the Federal Reserve. It increases the average American citizen’s tax burden. It grants unprecedented power (with no oversight whatsoever) to a consummate banking insider. And it undermines our so-called “Free Market” system at every step of the way.

And just in case you thought I was kidding that there’s no oversight whatsoever in how the $700 billion is spent, here’s the verbiage directly from the bill:

“Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”

By the way, how did they come up with the $700 billion figure in the first place? The answer: it had to be a lot. Now that’s good math in action. What’s it for? Well, if we knew we could have come up with a real number by now.  Besides, wouldn’t you rather leave that up to one man with no recourse to the American people whatsoever. He alone decides who wins and who looses. Checks and balances be damned!

Oh yeah, and did I mention that nobody is saying that this thing will work? It’s always pitched as a “band-aid” at best. But when this $700 billion band-aid is saturated with blood, it will need to be ripped off so another one can be applied. This is a slippery slope, a terrible precedent. Bad companies need to be allowed to fail so that markets can adjust gracefully, and so that basic market principles can be reinforced.

Make no mistake: this is power grab, a consolidation of wealth, and a giant step toward socialism. Furthermore, it does NOTHING to address the actual problems at their source. This bill actually prolongs the problem by side-stepping the free market with heavy-handed government intervention. And on top of everything it’s blatantly unconstitutional! No wonder everyone is in such a hurry to get it passed! But seriously, if people took time to read and think about this, it would never pass; thus the rush.

Please tell your congressmen that failure to honor their oaths to uphold the defend the constitution will disqualify them from every getting your vote again. They already know that this bill is vastly unpopular, but they need to hear it from you. They actually do keep a tally, and letting them know how you feel really can work –so long as their phones are ringing off the hook.

For background, here’s how House members voted last time around (when it failed). Here’s how the Senate voted on the bill that they will try to jam through the House today.  Here’s a list of House members that may change their vote. Here’s a list of all congressmen with their contact info.

Please contact House members first since this bill has already sailed through the Senate.  A simple 2-line email will do. This legislation is insideously dangerous, so please contact them right away.

Big Government Responsible for Housing Bubble

 I wish more people understood the substance of this recent article from Ron Paul:

Big Government Responsible for Housing Bubble

The House passed two bills attempting to rehabilitate the housing and mortgage market this week.  There doesn’t seem to be any shortage of criticism and blame for the bad decisions, and rightly so.  Lenders and banks do share much of the blame for the overheated market.  Lending standards were relaxed, or even abandoned altogether, creating an exaggerated pool of homebuyers that led to ballooning home prices that many, especially real estate investors, expected to continue forever.  Now that the bubble has burst, the losses are staggering.

However, many in Washington fail to realize it was government intervention that brought on the current economic malaise in the first place.  The Federal Reserve’s artificially low interest rates created the loose, easy credit that ignited a voracious appetite in the banks for borrowers.  People made these lending and buying decisions based on market conditions that were wildly manipulated by government.  But part of sound financial management should be recognizing untenable or falsified economic conditions and adjusting risk accordingly.  Many banks failed to do that and are now looking to taxpayers to pick up the pieces.  This is wrong-headed and unfair, but Congress is attempting to do it anyway.

These housing bills address the crisis in exactly the wrong way, by seeking to hide the problem with more disastrous government bail-outs and interventions.  One measure, HR 5830 the Federal Housing Administration (FHA) Housing Stabilization and Homeowner Retention Act would allow the FHA to guarantee as much as $300 billion worth of refinanced home loans for those facing threat of foreclosure.  HR 5818 the Neighborhood Stabilization Act, would provide $15 billion in loans and grants to localities to purchase and renovate foreclosed homes with the object of then selling or renting out those homes.  Thankfully, President Bush has vowed to veto both of these bills.  It is neither morally right nor fiscally wise to socialize private losses in this way.

The solution is for government to stop micromanaging the economy and let the market adjust, as painful as that will be for some.  We should not force taxpayers, including renters and more frugal homeowners, to switch places with the speculators and take on those same risks that bankrupted them.  It is a terrible idea to spread the financial crisis any wider or deeper than it already is, and to prolong the agony years into the future.  Socializing the losses now will only create more unintended consequences that will give new excuses for further government interventions in the future. This is how government grows – by claiming to correct the mistakes it earlier created, all the while constantly shaking down the taxpayer.  The market needs a chance to correct itself, and Congress needs to avoid making the situation worse by pretending to ride to the rescue.

The only change I would make is to note that, despite its intentionally misleading name, the Federal Reserve is not a government entity; it’s a privately owned bank.

By the way, if everybody wants “change”, and everybody is worried about the economy, why does the Utah GOP (and the GOP in general) go out of their way to ensure that the only presidential candidate that is talking about meaningful change at the very root of our financial problems gets no serious consideration from the mainstream.  Ron Paul has been talking about sound monetary policy for years; and even thought the bubble has burst (making the validity of his tenets even more painfully obvious), he still gets no love from the powers that be at the Utah Republican Party Convention.

Be sure to follow Ron Paul’s weekly columns. They really are excellent.