United Liberty

As mentioned in an earlier post, Congressman Ron Paul has introduced legislation (HR 1207) to demand an audit of the Federal Reserve System. No body or institution in the world has so much power over our economy as does the Federal Reserve System. Yet, this private institution has virtually no accountability to the general public.
As of latest reporting, HR 1207 has 190 co-sponsors. This includes a fair number of Democrats. Among Alabama Congressmen, HR 1207 is co-sponsored by Congressmen Mike Rogers (3rd district), Robert Aderholt (4th district, and Spencer Bachus (6th district). Pressure

In reading the daily commentary of the American Institute for Economic Research for April 29, 2009, my speculative little crystal ball began to light up.  AIER is the only serious business cycle analyst group that points out reality, and reality is that contraction is everywhere in the stats, in spite of the recent “good news” in the stock market.  (Desperate exuberance, anyone?)

So let’s think it over.

Dr. Paul explains why the Federal Reserve needs to go and why the free market and saving money (vs. printing money) is part of the solution to the current crisis.

Since the middle of the 20th Century, when the Federal Reserve started compiling this measurement of non-borrowed bank deposit reserves there has been little short term deviation from its normal levels. Long Story short - Bank reserves, other than those achieved through loans (usually FED funds market, or discount window) have evaporated.

H/T Fincial Ninja.

For years liberals, conservatives, independents, DC, Main Street and Wall Street seemingly defied all normality and not only embraced, but nearly worshiped the same individual, Alan Greenspan. After rising in 1987 to the position of Chairman of the Federal Reserve, the most powerful financial position in the world, he presided over the most sustained period of economic growth in the history of America. He rode the wave of private sector technological achievements that created abnormally high productivity growth. To many it was his greatness that brought about the increase in income, increase in homeownership, increase in credit, increase in all things material — while still maintaining price stability.

A fairly good and simple explanation of what the Federal Reserve is and the part it played in the current economic crisis and bailout.

Today the Federal Reserve invoked “Emergency Powers” in order to further expand its reach into the economy. There are many inherent problems with central banking. There are even more problems with central management of the day to day workings of the economy. Seeing the recent devastation in the credit markets - which was mostly created by the FED - the FED has been trying desperately to contain the situation, but its traditional policies are just showing little to no results.

Most of us have seen the passionate speech given by George Baily in It’s a Wonderful Life to the evil bank-owner, Mr. Potter, begging for leniency towards Potter’s delinquent homeowners and espousing why owning a home makes the residents of Bedford Falls better citizens and more productive members of society.

Mr. Potter is simply interested in making sure his payments are received on time and that foreclosures are issued to those who fall behind.  He believes, and rightly so, that if a man has overextended himself and cannot pay his bills, the mortgage owner has the right to claim the house and boot the residents out.

George Baily, however, is more interested in promoting the “American Dream”- home ownership- and has built his life and Savings and Loan business around helping families buy homes… even if they’re not quite ready to take on that financial responsibility.