his is a voice crying in the wilderness.....too late for enlightened reform of bad habits....people are too busy, and too thick with their own contrived and programmed perceptions to take another direction....There have been coop attempts before, some got closer than others, but the game is played on many levels, all interdependent in search of autonomy.....

Ron Paul: Vote for the man who has a rat's chance in hell, for president.....Vote Ron Paul...

Libertarians have no friends in high places, they are too close to where a country like the U.S.'s roots are, and that's like holy water on a vampire's dick....it stings. Liberals ,moderates, and repubs, are becoming the same, fucked-up animal like a coral snake with 3 different combinations of the same poisonous color.....business as usual till the empire falls again I'm afraid......we need some planetary disasters to bring the world together.....asteroid, volcano, SOmething!!! Humans will go on putting up with the bullshit, only until the survival circuit kicks that head out of the collective ass......we are predictable, constant...easy reads.....

true, choggie - but you and I do hold some power to let other people know. If he gets the nomination, I'd vote for him. If he doesn't, I'll pen him in when I go to vote.

Either way, let people know, y'know? Don't just see him as the "man who has a rat's chance in hell" because seeing him that way means that you might not take him as seriously as you really should.

Hopefully, you and I and others may be able to change that.

the United States government is not supposed to be a democracy, but rather a democratic Republic

James Madison, Alexander Hamilton, and John Jay articulated this conception of a republic in their 1788 essays that were later compiled as The Federalist Papers. These essays, intended to support the ratification of the federal Constitution in New York, distinguished a republic from a pure democracy, describing the latter as "a society consisting of a small number of citizens, who assemble and administer the government in person." In the context of The Federalist Papers, a republic differed from a pure democracy only in that it was "a government in which the scheme of representation takes place." According to this interpretation, a republic was a representative democracy. As Madison pointed out, the representative principle militates against the irresponsible exercise of majority power, for it makes a large republic possible, and it is difficult in a large republic for any faction to become a majority. According to these authors, a large republic would foster the formation of many factions, and this sheer multiplicity of interests in turn would create shifting coalitions, which would hinder the formation of an oppressive or irresponsible majority. Furthermore, because of the checks and balances and separation of powers between different branches and levels of government, any upstart tyrannical faction would encounter many legal and institutional roadblocks.

Actually, I meant what I said.

While there was a debate as to whether this country should have been a Democracy or a Republic, there were no second thoughts - it was a democratic decision that chose and debated the form of government we have, today, even.

It was democratically decided that, since a Republic guarantees certain rights that can not be taken away for any reason(just by being a citizen of the country in which the Republic is founded), and a Democracy, as you say, gives the "average joe" the ability to make laws, a Democracy is quite easier to abuse.

I'll let you in on a little secret - in a democratic Republic, the "average joe" CAN make laws(just as in a democracy), but those laws must be subject to the same scrutiny that every other law must - they must not violate the Constitution or its amendments, and they will be voted on, just like every other law.

In other words, a Republic was chosen not to prevent the "average joe" from making laws, but to be sure that there would be a process in place when the "average joe" WANTED to make a law, that they must not violate the rights of others that should have the same rights as he does.

Not really sure what the Latin and Greek referenced, as the OED shows that the English settlers of this country already had an ENGLISH definition for both of the words "Democracy" and "Republic" that extended the meanings far beyond their original Latin and Greek meanings, but ok.

I just think it's funny that when people think of "Republic" they immediately think of "Democracy," as the two have obvious differences - none of which detract from the power of the people, as they do the power of the government OVER the people.

I.e. - In a Democracy, if the majority of people(not necessarily 51%, statistically) agreed with O'Reilly that someone should shut up, that person would be subject to public prosecution and the public would execute on that prosecution quite swiftly. In a Republic, that person may be CRITICIZED by others, but those others would have to try that person in a court of law under existing laws, with regards to his rights as a citizen of the country.

I certainly do not want to see this country end up American Idol-voting for or against laws and prosecutions.

[EDIT]
Well then, we're speaking in two different contexts - you're speaking in context of The Federalist Papers, themselves(which applied themselves toward the ratification of the Constitution in New York State) - I'm speaking in context of the Constitution, itself. I apologize for not recognizing that, but I do believe that the member states of this country ratified the Constitution, and not The Federalist Papers, even though The Federalist Papers DID play a part in it's ratification(and therefore must be read and interpreted especially for New York).

New York State(and Alexander Hamilton), at the time, was a big proponent of the same central and private banking that dominated over the people in other countries, and led to individual rights being curtailed as a result, so it's quite understandable that they would be least likely to ratify, as there were attempts made, within the body of the Constitution, to limit that power here in the states.

Like I said - limit. Nowadays there exists in the United States a much more powerful private central bank, simply because of what good people failed to recognize(namely, Woodrow Wilson, himself), and that's what Ron Paul, in this video, helps to explain.

What "upstart tyrannical group" is the most threatening, outside of a private central bank?

The problem is that Democracy is failing across the board. The idea that the people's voice has influence is rapidly becoming worth naught.

The majority of the people in all 3 countries involved in NAFTA were against it, it got passed anyway.

The majority of the people in all but one country involved with the "Coalition of the Willing" were against their host countries being involved, (some as high as 90% opposed), yet their countries willingly joined.

The majority of people in the US want transparency in the budget process, (they simply want to know where THEIR money is being spent), and the government repeatedly shuts down any legislation that increases that.

The majority of the people in both the US and Iraq, (both have democratic governments mind you), want the US out of Iraq and the US remains with no end in sight.

So many other examples. I know that it's not majority rules, but sheesh. The majority has been right in EVERY case I can think of off the top of my head and the majority is continually ignored.

I do not believe that democracy is failing, quite simply, because we're not a pure democracy - it is the free exchange and debate of ideas that brings us to conclusions, after all - when we do actually get the vote in a matter, we are more willing to accept the responsibility, and thus the consequences, for our actions.

How did the majority handle slavery? How does the majority currently handle privatized banking, or even retailer-driven imports from other countries that lower the value of their own currency?

The answer, from my point of view, is that they can't. The details of such functions of systems as tyrannical often go unperceived by those participating, and for those that DO perceive the tyranny of such a system, they are more often than not powerless to stop it, are even slaves to it, in many cases.

This is just one reason(from my POV, mind you - there are many debates on this, as seen above in this thread) that the founders of this country chose that this be a democratic Republic, rather than a democracy. In a pure Democratic form of government, the people would directly judge, and prosecute, others, without the benefit of the people they prosecute being guaranteed certain rights.

In a democratic Republic, however, everybody(including the President of the United States) is SUPPOSED to be required to follow a protocol - the same protocol - to get laws passed and to judge and prosecute others.

What has happened, I believe, is that much of that protocol is not being followed - that too many people are being far too lenient on the people they see as their leaders - putting them on a pedestal, if you will - when the people they see as their "leaders" are just supposed to be ordinary citizens, that should be required to go through the protocols set forth in the Constitution.

If you are able to convince the public to give you the right to bypass the law of the country under which you govern, I do not doubt that whatever form of government you govern will be corrupted, and thus the public, the people, will not be listened to.

Well, that's basically what's happened here...from my point of view.

The next administration will show us the true colors of an oligarchy's dominance over another....semantics and their roots aside, what we have in America in a failure to communicate....this is due greatly to a calculated re-wiring of semantics by a dedicated and persistent effort on the part of Newspeakers.....constant barrages until phrases become implanted in order for tolerance, justice, and meaning to be programmed and manipulated....try these on for size, and decide what meaning they have for you:

Hate Speech
Right to Life
Millitant Fundamentalist
Necessary Downturn

So many on the left are quick to describe right as using Orwellian Newsspeak tactics and on the right they do the same, they are both using it to affect and to sell, agendas that are out of touch with all men, and the continuing battle of ideas and words grounded in contrived sensibilities and reasoning, is the box the people in the middle are kept in.....quite insidious, really, give people a team to root for, a coliseum to showcase and unite in a common arena...... the diversion to keep the rabble happy and fucking and making new meat-bots....and paying their bills with monopoly monies,happy to perform when whipped.....up....and diversion will keep them together.....



"The Rectification of Names consists in making real relationships and duties and institutions conform as far as possible to their ideal meanings.... When this intellectual reorganization is at last effected, the ideal social order will come as night follows day - a social order where, just as a circle is a circle and a square a square, so every prince is princely [and] every official is faithful..."

Confucius (as described by Hu Shih)

how about Orwell describing what is being done today, the young energetic minds sucking it up and spitting it out.....(Lot of it around here)
...."Its vocabulary was so constructed as to give exact and often very subtle expression to every meaning that a Party member could properly wish to express, while excluding all other meaning and also the possibility of arriving at them by indirect methods. This was done partly by the invention of new words, but chiefly by eliminating undesirable words and stripping such words as remained of unorthodox meanings, and so far as possible of all secondary meaning whatever."

When I smell shit, I say it stinks and demand it be dealt with, and look for the perpetrator now-a-days, to whine and wonder why they would possibly be expected to clean it up.......

oh, absolutely choggie - newspeak definitely contributes to it - NLP, man...seriously. Humans know more and more about NLP - how do you think the military/corporate media/etc. can take advantage of that?

'it's funny that when people think of "Republic" they immediately think of "Democracy," as the two have obvious differences'

Ok, I guess you failed to see the definition of the words. One means "rule by the people" And the other means "the people rule". So in terms of vocabulary there no difference. You are trying to say True Democracy (major rule, ie. 51% of the population make the decisions) and Representative Democracy (elected offcials make decisions for the people they represent).

You are equating "Democracy" and "Republic" with those concepts, but go look up the "English" definitions of both those words. They were more careful with word meanings that the modern dictionary versions where "republic" implies the current form of US and French "Republics"

From the OED Online:

Democracy
1. Government by the people; that form of government in which the sovereign power resides in the people as a whole, and is exercised either directly by them (as in the small republics of antiquity) or by officers elected by them. In mod. use often more vaguely denoting a social state in which all have equal rights, without hereditary or arbitrary differences of rank or privilege.
    b. A state or community in which the government is vested in the people as a whole.
    c. fig.
2. That class of the people which has no hereditary or special rank or privilege; the common people (in reference to their political power).
3. Democratism. rare.
4. U.S. politics. a. The principles of the Democratic party; b. The members of the Democratic party collectively.

Republic
1. The state, the common weal. Obs.
2. a. A state in which the supreme power rests in the people and their elected representatives or officers, as opposed to one governed by a king or similar ruler; a commonwealth. Now also applied loosely to any state which claims this designation.
    b. Applied to particular states having this form of constitution.
    c. Without article: Republican constitution or government. rare{em}1.
3. fig. and transf. a. Any community of persons, animals, etc., in which there is a certain equality among the members.
    b. the republic of letters, the collective body of those engaged in literary pursuits; the field of literature itself.
4. attrib. (passing into adj.) Of the nature of, characteristic of, pertaining to, a republic or republics; republican. Now rare or Obs.

You're right.

"Often more vaguely denoting a social state in which all have equal rights" is not represented in the etymology of the 1776 definitions, which is what I was picking apart before(from the 1979 edition of the printed OED, even), but you are right - I must have meant True Democracy and Representative Democracy, as "Republic" implies the organization of the state, and democracy implies the form of government.

Thank you for correcting me.

It never hurts to have more transparency, although his arguments are somewhat abstract. Sure, dollar fell in value since 1920, but such inflation is normal, just look at any other country. In fact, if an inflation is too low, it'll cause economical problems. Other countries have adopted inflation targeting in recognition of this fact --
http://www.federalreserve.gov/Boarddocs/speeches/2005/20050526/default.htm

This is one reason why we need some separation between the Congress and Fed that determines monetary policy -- Congress decisions can be largely short-term because they have to answer to their constituency, whereas goal of the Fed is long term stability, which can be in conflict with short term benefits to the people who elect the Congress.

Sure, 0 inflation may be good for the consumers right now, and people might pressure the Congress to institute 0 inflation policies if Congress had control over it. But in the long term, 0 inflation now would cause harm to the economy. Luckily, because of the separation between Congress, and the Fed, such decisions are made based on impartial long-term economic planning, rather than on the current whim of the constituency.

"goal of the Fed is long term stability"

Pre-Fed
-------
Panic of 1819-1824(4/5 years)
Panic of 1837-1843(6/7 years)
Panic of 1857-1860(3/4 years)
Panic of 1873-1879(6/7 years)
Panic of 1893-1896(3/4 years)
Panic of 1907-1908(1/2 years)
1776 to 1914(137.4 years[July 4 founding]) Total = 23 to 29 years - 21% of our time(max) spent in economic turmoil
OR(if you want to be technical) 1819 to 1914(95 years) - 24%(min) to 30.5%(max)of our time spent in economic turmoil

Post-Fed
--------
Post WW1 Recession - 1918-1921(3/4 years)
Great Depression("The Great Contraction") - 1929-1937(8/9 years)
Post Korean War Recession - 1953-1954(1/2 years)
1973 Oil/Energy Crisis - 1979-1980(1/2 years)
1982 - 1983(1/2 years)
1988 - 1992(4/5 years)
2000 Recession - 2001 - 2003(3/4 years)
1914 to 2007(93 years) Total = 21 to 28 years - 22.5% of our time(min) spent in economic turmoil

How has the Fed helped us establish "long term stability?"

Sure, not ALL of them were CAUSED by the Fed, but they haven't exactly PREVENTED any of them, either.

As a matter of fact, the very fact that they purposely CAUSED at least one of them should be enough for our government to deny their charter and to repeal the Federal Reserve Act.

"How has the Fed helped us establish "long term stability?"

By ensuring that the instability that we do experience, is not as severe. It's the severity, not the duration, that is the important factor.

Here's an interesting article on history of the Fed and how it cured the stagflation of the 80's by deliberately causing a recession
http://www.huppi.com/kangaroo/L-carterreagan.htm

The important point in the story above is that Fed Reserve chairman induced a recession in an effort to combat stagflation. It was highly unpopular at the time, and Congress even considered bringing the Fed under it's direct control. But in the end, Volcker's medicine worked, and he was renominated with overwhelming public and Congressional support. The fact that the Fed was independent from Congress, saved the Congress from their own myopic policy making

But wait...

According to the Encyclopedia Brittanica, at least two of the United States' MOST severe recessions/depressions happened AFTER the creation of the Federal Reserve(the closest thing I've found to a study that deals with the severity of economic turmoil):
http://www.britannica.com/eb/article-234440/Great-Depression

As per the OED...well, I'll let you read it for yourself(let me know if you'd like the full definitions posted, as these are exclusive, and the only parts of the definitions that I see that pertain to economics):
Panic
b. A condition of widespread apprehension in relation to financial and commercial matters, leading to hasty measures to secure against possible loss.

Recession
4. Econ. A temporary decline or setback in economic activity or prosperity.

Depression
5. a. A lowering in quality, vigour, or amount; the state of being lowered or reduced in force, activity, intensity, etc. In mod. use esp. of trade; spec. the Depression, the financial and industrial ‘slump’ of 1929 and subsequent years. Also attrib.

And this site lists all but two of the times of the economic turmoil occurring BEFORE the creation of the Federal Reserve as "Panics(and go into pretty interesting detail about how they lacked in severity)," with the other two being the "Long Depression" that(they note) did not affect - and actually raised production in - the United States - they EVEN compare it to the Great Depression itself, as such: "The Long Depression was not a particularly deep one, unlike the more famous Great Depression."

The other being the "Post WWI Recession," which is noted as "Sharp but brief":
http://www.answers.com/topic/list-of-recessions

So again - I ask - How has the Fed helped us establish "long term stability?"

The examples of recessions you give are minor compared to the instability experienced by some countries without a strong establishment like the Fed behind their monetary policy. The Argentinian currency collapse and Yugoslavian currency collapse are recent cases.

There's a natural cycle of growth and recession in large economies. The period of growth and optimistic investment is inevitably followed by recession/stagnation. The Fed is tasked with "taking away the punch when the party gets going". That's not to say that the Fed is responsible for the recession when they "take away the punch", the real cause is the overheating of the economy. Overheating of the economy eventually results in a recession, whether or not Fed intervenes.

We can only speculate how much better off we'd be without the Fed but Europe provides a better comparison. During the reconstruction after WWII, German central bank system was organized in the image the US Federal Reserve -- independent of the government to a large degree. Germany now has the most robust economy in Europe, better than France and England that choose to tie their central banks to the government.

My point is - we didn't NEED the Fed, in the first place, and it most certainly did NOT help the United States to get it.

Also, the examples you cite are somewhat flawed:
Argentine Currency Board - Based on the design of the Federal Reserve, and even linked the peso with the USD at a rate of 10,000:1

Economy of the Socialist Federal Republic of Yugoslavia - "Despite Belgrade's non-alignment and its extensive trading relations with the European Community and the US, the Reagan administration targeted the Yugoslav economy in a "Secret Sensitive" 1984 National Security Decision Directive (NSDD 133), "Us Policy towards Yugoslavia." A censored version declassified in 1990 elaborated on NSDD 64 on Eastern Europe, issued in 1982. The latter advocated "expanded efforts to promote a 'quiet revolution' to overthrow Communist governments and parties," while reintegrating the countries of Eastern Europe into a market-oriented economy. [2]

Western trade barriers, dramatically reduced its economic growth. In order to counter this, Yugoslavia took on a number of International Monetary Fund (IMF) loans and subsequently fell into heavy IMF debt. As a condition of receiving loans, the IMF demands "liberalisation" of Yugoslavia. By 1981, Yugoslavia had incurred $19.9 billion in foreign debt. However, Yugoslavia’s real concern was the unemployment rate, at 1 million by 1980."

Wow, man, you're really making me realize how much the United States Government has used it's economic influence and power to mess up other countries - with organizations like the IMF and World Bank backing us the entire time.

Your arguments, while trying to show how the Federal Reserve benefits us, only seem to show that, once organizations like the IMF and World Bank(and, subsequently, some of the richest people in the world that ARE invested in our Federal Reserve) start pulling their money out, we're screwed - I don't doubt(after researching the countries you mention), that this country will suffer a worse fate - I mean, how could our Federal Reserve possibly PROTECT our currency from the same fate as that of the Argentinian currency?...especially when it WAS the same system that caused their collapse?

Again - I ask - If everybody else around the world is following a "fad," why argue for that international "fad," especially by ignoring the signs of damage that said "fad" has caused?

Without the Fed, who is going to be the lender of last resort? We could revert to the situation to what it was before the Fed was created, which would mean that a handful of big banks, like JP Morgan, would be the lenders of last resort, and with that, in charge of the monetary policy. In fact, the Fed was created in part to break that clique of power.

At least now the government has some kind of check on the central bank system, by being able to appoint the governors, set their salaries, and impeach them.

Or we could bring the Fed under direct government control, but that would mean that politics would play a greater role in the monetary policy. Congressmen and the president realize that economy experiences cycles, and they could use the interest rate "lever" to make the cycles of boom correspond to election times.

Not that they don't try -- both Carter and Nixon both appointed "team players" as chairmen, loyal supporters that tried to lower interest rates when the president was in trouble. The 14 year appointment terms reduce those effects.

The reason Friedman Milton's book is out of date on the Fed is because since the 60s, Milton's "monetarist" philosophy has grown more accepted in the economic community, and even tried by the Fed. Milton was essentially saying that instead of complicated deliberations on when to speed the economy up, and when to cool it down (something that the Fed governors allegedly did just to make themselves feel important), the Fed should be there to make sure that money supply grows at fixed rate, so to take more of an accounting role. In fact, when Reagan was elected, and Milton Friedman became the president's economic advisor, the Fed did just that -- instead of working to "take away the punch when the party gets going", it changed it policy to that of a passive guardian of money supply, changing interest rates automatically to make sure there's a stable amount of money in the system. The whole account of what happened is long and fascinating, which you can read in the book "Secrets of the Temple: How the Federal Reserve Runs the Country", but the bottom line is that it backfired, and the Fed reverted back to the old mode of operation. Friedman's monetarist philosophy proved too simple for the real world. He later aknowledged "I was wrong. And I have no good explanation as to why I was wrong"

Yugoslavian scenario won't happen in US because the hyperinflation (quintillion of percent per year) was caused by the government issuing money to cover it's own fiscal deficit. In US, the Federal Reserve has the authority of issuing money, but not the government. The US government can pressure the Fed to loan it money, which in essence results in more money being printed, but within limits. By having to go to the Fed to ask for more money, it creates a balance on the government's control over spending, as opposed to Yugoslavia's case, when the government itself could quietly print more currency on demand.

As far as Argentina goes, one of the things that happened in the financial crisis was a bank run in 2001. The Fed, with their capacity to print currency, would not let a bank run happen in US. For instance the 1929 stock market collapse was not accompanied by a banking panic due to the quick action of the Federal Reserve Bank of New York.

United States uses IMF and the World Bank to lend money to developing countries, not the other way round. A more realistic scenario is if the Asian countries lose faith in US treasury bills and stop buying them. That would mean the current trade deficit would go unfunded, dollar would fall in value, and Americans would no longer be able to afford to buy chinese goods. That would be bad for China just as it's bad for US, in fact, it would probably cause a world-wide recessions, so the whole world would work to prevent this from happening.

The Fed could mess up the economy by flooding the streets with fed banknotes without limit, or by refusing loan requests at it's Discount window. However that can be said of anybody in charge of the monetary policy. A more relevant question is what what they are realistically expected to do. In retrospect, they've made some mistakes, but who could've made those choices better?

Firstly - the concept of a "lender of last resort" is one created by JP Morgan, himself. Secondly - you do know that JP Morgan helped to write the Federal Reserve Act, right?

Oh yeah, I guess it's fortunate that the government has just "some check" on the central banking system - not like they're supposed to be printing the money themselves or anything. Not like they ever have appointed anybody that wasn't already rich by inheritance(not by knowledge, mind you) to be governor, or lowered their salaries, or ever impeached anybody.

As for politics playing a greater role in monetary policy - what would be the difference? On the one hand, you have the politics of a small group of people controlling the monetary policy of the masses versus the politics of people who have to DIRECTLY answer to the people of the United States. Who currently benefits from the politics of a small group of people running the Federal Reserve?...Oh yeah, that's right - they aren't going to do something that is not in their best interests...if the government took direct control, whose best interests would they be required to answer for?

I think you maybe assume that the President would control the Fed if it came under direct governmental control - that's precisely the problem here - the only person that appoints the Chairman IS the President - neither the Congress NOR the Senate have any say in it. I am most certainly NOT suggesting that the President take direct control - I am suggesting that, what is stated in the Constitution, that the Congress and the Senate takes direct control.

It's very interesting that you've read "Secrets of the Temple(as you defend the value of the Federal Reserve so adamantly)," but, as you'll note - I do not reference Milton Friedman's monetarist theories - I reference his "Monetary History of the United States," more specifically his account of what caused the Great Depression, or, as he notes, the Great Contraction.

Have you by any chance read "The Creature from Jekyll Island?" Yet another interesting diatribe on the Federal Reserve that you might like.

We can extensively debate the causes of Yugoslavia's economic troubles, but I would hope you'd recognize the economic role that the United States played in their demise. In other words - what is stopping us from racking up the same amount of debt that they racked up with the IMF? As the IMF increases our credit to fund our various wars, they also retain the power to require that the loans we made with them be paid back, at any time of their choosing. Last I checked, that would equal what?...about $80,000 per American? I'll let you find the details of that on your own, but I hope that you do realize that most Americans do not have $80,000 to pay back the IMF loans that this country has taken out to fund our various wars.

So many things you say interest me - like why do you think it was a GOOD thing that the Fed didn't allow bank runs? I ask this mainly because, well, by doing so they didn't exactly curtail the spread of economic depression, as evidenced by the following 8 years - essentially they just held onto the little bit of money the people HAD earned instead of letting the people trade it as they would have otherwise - probably even lessening the devastation of the Great Contraction, but, well, we'll never know, because the Federal Reserve didn't do that.

Who could have made better choices? That's a good question - practically, a group of people that had closer ties to the caste of citizens that make up the working foundation of this country, and not a group of people that were neither a citizen of this country, or represented the caste of society that manages the working foundation indirectly.

In other words, I'd consider it a safe bet that the Congress and the Senate could have done a better job of managing the money supply - at least if and when the Great Depression happened, the people would have been required to take responsibility for it themselves, instead of theorizing about WHAT or WHO caused it, as we have done for almost the past 100 years.

Long and short of it - Americans have become complainers, mostly because they do not have responsibility over the various systems that affect them, and therefore they can NOT exercise any rights they DO have to make their own situations better - they can't take their cases to the Fed, they can't even petition for the Congress or the Senate to exercise control of the Fed, because both the Congress AND the Senate would just note the status of the Federal Reserve as a corporation, and, as such, it is not within their legal abilities to regulate a system that people themselves have prescribed to(by using Federal Reserve Notes).

Check this out: http://smallbusiness.dnb.com

Go there and search for "State of <state>" and pick the state. You'd be surprised at what is registered as a corporation these days.

"the only person that appoints the Chairman IS the President - neither the Congress NOR the Senate have any say in it."

On the contrary, presidential nominees have to be confirmed by the Senate
http://www.federalreserve.gov/kids/

"Not like they ever have appointed anybody that wasn't already rich by inheritance(not by knowledge, mind you) to be governor, or lowered their salaries, or ever impeached anybody."

In fact Paul Volker's father was a civil engineer, and later served as a town manager in two small towns. It is said that this tradition of public service is what drove Paul Volcker to become the chairman of the Fed in 1979. It's a public role, because in addition to being entrusted with nation's economy, the chairmen get paid considerably smaller amounts that they could in private sector. Alan Greenspan earned $180 grand per year at the Fed chairman, but someone with his qualifications can earn over a million in private banking industry.

"It's very interesting that you've read "Secrets of the Temple(as you defend the value of the Federal Reserve so adamantly),""
I don't deny that the Fed controls the monetary policy, I just don't think Congress could do it's job better. The Congress would always be pressured to lower the interest rates and stimulate the economy, regardless of long-term consequences.

"So many things you say interest me - like why do you think it was a GOOD thing that the Fed didn't allow bank runs?"
Because bank run is a very bad thing. It makes the people lose faith in the banking industry, and store their wealth under the pillow instead of banks. This means that pooling of large capital becomes hard, and investment dwindles. Without large investment there's no growth.

FDIC and the Fed provide a an unprecedented degree of protection to the banks. Because of bail-outs, only a dozen banks fail each year, compared to tens of thousands of productive enterprises. It may seem strange that the Fed and the government would agree to bail out a small bank in trouble, but won't lift a finger if a large airline or an auto-maker goes under.

However, such imbalance is there because banks are essential to the very essence of American way of life -- capitalism. Without the availability of investable capital that the trust in the banking structure provides, US would either have to the way of USSR/China and tax the heck out of it's citizens, or give up on economic growth.

"In other words, I'd consider it a safe bet that the Congress and the Senate could have done a better job of managing the money supply"

Can you imagine the Congress tightening down interest rates and causing recession? That would be political suicide, yet, such an action may be necessary, for instance to put an end to stagflation. The Congressmen are directly accountable to their constituencies, but you can hardly expect common voters to understand the nature of sacrifices that have to be made.

"I hope that you do realize that most Americans do not have $80,000 to pay back the IMF loans that this country has taken out to fund our various wars."

USA debt is financed by the sale of government securities, not loans. The government sells T-bonds and T-bills when it wants to increase the debt. They could in theory buy back the bonds to decrease the debt, but there are economic arguments against doing that, and since WWII the debt has only been growing larger. The bottom line is even though it's called "debt", US doesn't actually have to pay it back, and will likely not ever pay it back http://en.wikipedia.org/wiki/U.S._public_debt


"they can't take their cases to the Fed, they can't even petition for the Congress or the Senate to exercise control of the Fed,"
The Congress can exercise control over the Fed. All the have to do is enact a bill to lower interest rates, or raise them. Such bills were introduced before, but failed to be enacted. Such a bill would be a bad idea politically. It would render the Congress directly responsible for the necessary sacrifices that have to be made. Because the public can't understand the need for sacrifices, the Congress that does what's good for the economy in the long-term by causing an immediate recession, would be quickly voted out, and replaced by people who lower interest rates no matter what.

Ah yes - my bad - forgot about Senate confirmation.

I apologize - maybe I have not made this clear, but I will not discount the fact that there will be exceptions to every statement made. Paul Volcker is one such exception, but as you yourself pointed out - Greenspan made 180k per year. I don't know if you quite get this, but the average American makes around 33k per year. While he most certainly could have made more money, he is still quite out of touch with those that he ultimately affects, which was more the point of what I was saying.

"The Congress would always be pressured to lower the interest rates and stimulate the economy, regardless of long-term consequences."
Here's one question for you - assuming the Congress took over control of the monetary system(as they have the right to do), what would be the purpose of an interest rate? The interest rate only sustains the profits and dividends of member shareholders of the Fed - operating costs are covered by the budget of money the Fed has allotted itself to print. So why would there be a need for an interest rate?

FYI - I do not sustain any faith for the Capitalist system, as the end result of Capitalism is ultimately Plutocracy(which is what we are currently living under today - people that represent the richest 5% of the population control 95% of the population) - so, just so you know, I would have no qualms with abandoning the Capitalist system entirely.

Bank runs are only a bad thing for the banks in most cases, because it shows, to their clients, exactly the level of corruption of a central banking system. Yes, people will lose faith - and they should. Yes, people will take what little money the bank has left for them out of the bank - AND THEY SHOULD. They should be able to, as an exercise of power over the banks. In what is professed to be an ultimately Capitalist system, where is the competition to the banking industry that, should they mess something up, the public will exercise power over them?

If there is to be a central bank, it must be addressable by the people themselves, SOMEHOW. The public themselves must be able to exercise some form of power over the bank in order to keep that very system in check...otherwise, the public is not responsible for what happens, and must not be legally bound to abide by such a corrupt system.

Ultimately, if the banks are to be private, as the Federal Reserve currently is, the people should be allowed - encouraged, even, to create their own forms of currency to challenge the private form of currency. At the very least, that would still result in one form of currency being chosen over the rest, but the people themselves would be responsible for what happens with that form of currency.

T-bonds/bills - what is a bond? The OED essentially defines it as an "Obligation," or a "promise to pay."

That would make a bond essentially a letter by the issuer to whoever was "buying" the bond to, at a later date, pay it back - how is that NOT a loan?

Legally, that would make us obligated to pay that money back, or exchange for something of equal value - personally I'd rather give the Fed back everything it ever gave me - because essentially it's worthless - than have them exchange for resources and land equivalent to what we owe them....but neither I, nor most Americans, could afford the bill...so if we ever want to rid ourselves of the Federal Reserve System, well, we're going to have to give THEM the land we've fought for. Funny how that will work.

Can you imagine a form of currency that is not interest-bearing, that the people themselves CAN be held responsible for the rise or the fall of?

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> Paul Volcker is one such exception, but as you yourself pointed out - Greenspan made 180k per year. I don't know if you quite get this, but the average American makes around 33k per year.
Average American doesn't have Greenspan's qualifications. The point is that someone like Greenspan could make over a million per year by accepting a position in private sector. And a quick google search shows that Greenspan's family wasn't rich either.
http://www.nytimes.com/books/first/m/martin-greenspan.html



> "The Congress would always be pressured to lower the interest rates and stimulate the economy, regardless of long-term consequences."
> Here's one question for you - assuming the Congress took over control of the monetary system(as they have the right to do), what would be the purpose of an interest rate? The interest rate only sustains the profits and dividends of member shareholders of the Fed - operating costs are covered by the budget of money the Fed has allotted itself to print. So why would there be a need for an interest rate?

The Fed could loan money at 0% interest rate. Since the Fed can print money, that means it would hand out free money to any bank that asks. Surely you don't think that would be a good idea?


> FYI - I do not sustain any faith for the Capitalist system, as the end result of Capitalism is ultimately Plutocracy(which is what we are currently living under today - people that represent the richest 5% of the population control 95% of the population) - so, just so you know, I would have no qualms with abandoning the Capitalist system entirely.

Abandoning the system for what? Soviet-style Gulags? A lot of the inventions you are using right now are here thanks to capitalism. Take your computer for instance. Proof of concept transistor was developed in Bell Labs, and brought to the masses through capital ventures Shockley Semiconductors and Fairchild Semiconductors. Intel was one of the the child ventures. Those were all possible because of large investment. You need to have a workable alternative to capitalism, or admit that you don't care about progress. Neither communism, nor anarchy have proven themselves workable over long term.


> Bank runs are only a bad thing for the banks in most cases, because it shows, to their clients, exactly the level of corruption of a central banking system. Yes, people will lose faith - and they should. Yes, people will take what little money the bank has left for them out of the bank - AND THEY SHOULD.

It's not the banks that are hurt the most by bank runs, but the people who keep money in the banks. Banks are required to only keep 1/6th of the money it loans out on hand. So if everyone decides to take their money out, 83% of the people will be left holding an empty bag.

And when the people lose faith in banks and stop depositing money there, all the loan-takers will be hurt. How will someone get a mortage for a house? Or take an inventor with a bright idea who needs a large loan to develop it?

A worse thing would happen if public loses confidence in the Fed itself. The currency that we use are the Fed promissory notes. Without confidence in the currency, how will people continue their economic transactions? We could go back to barter, but that is annoyingly inefficient. Imagine having to find 2 goats, a hub-cap and a pile of dirt that someone wants in exchange for a new coat.


> They should be able to, as an exercise of power over the banks. In what is professed to be an ultimately Capitalist system, where is the competition to the banking industry that, should they mess something up, the public will exercise power over them?

What is the competition to the banking industry? The role of banking industry is to accumulate a large amounts of resources to direct into various areas of development. The capital is amassed because of people volunteering to store their capital is the banks. The main advantage of banking is that capital formation is done through volunteer means. One competition to this system is the Soviet-style system -- the government amasses resources through forceful means -- ie, by telling a million people to come together and dig a hole here and there. And if they don't want to dig a hole? Too bad, they should've been born in America.


> If there is to be a central bank, it must be addressable by the people themselves, SOMEHOW. The public themselves must be able to exercise some form of power over the bank in order to keep that very system in check...otherwise, the public is not responsible for what happens, and must not be legally bound to abide by such a corrupt system.


> Ultimately, if the banks are to be private, as the Federal Reserve currently is, the people should be allowed - encouraged, even, to create their own forms of currency to challenge the private form of currency.

What's stopping you from creating your own currency? Fed notes started by being promissory notes -- it was a note that you could exchange for a certain amount of gold if you brought to the bank. So likewise, you could hand out slips of paper, in promise to exchange them for something tangible if a person brings it back. In essence, shops handing out gift certificates are in essence issuing their own currency. There was a period of time in US when there was no universally accepted paper money. Each bank would issue their own promissory notes. However, because banks failed often, people would trust notes from bigger banks more. Eventually the "currency" from the biggest banks would outcompete everyone else.

> T-bonds/bills - what is a bond? The OED essentially defines it as an "Obligation," or a "promise to pay."

That's not the kind of bonds that government issues. The bonds are that the government issues are papers that US government promises to pay interest on. They don't promise to buy it back, and in fact, it's unlikely that the government will EVER buy it back. The government hasn't bought back any bonds since WWII.

> Can you imagine a form of currency that is not interest-bearing, that the people themselves CAN be held responsible for the rise or the fall of?

You really put a lot of trust in "the people". If people were so responsible, we could give each person a printing press and let them be directly in charge of the monetary policy. They would then rely on their superior knowledge of monetary policy and print more money exactly when it is needed. However, the reality of it is that people are greedy and irresponsible. In the scenario above, everybody would start cranking out money with no regard to economic harm that causes. That's a prime instance of the "tragedy of the commons"

The ideas you are advocating are far from new. People are by nature suspicious of rich people, especially bankers, and there have been many instances in the history when "the people" stepped in to "reign in their power of bankers." For instance, when Lenin carried out the revolution in then-capitalist Russia, his first targets were to take control of the railroads, the telegraph and the banks. The banks became the "property of the people", but that didn't help the people much when their savings have evaporated. My uncle worked as a pilot in Soviet far north for a decade and saved up an equivalent of $60,000 over the years, the savings that disappeared through governments mismanagement. Good politicians make bad bankers.

Or look at early American history. The ideas you are advocating are the credo of the Populist party, whose main ideal is to represent the rights of "the common people." Andrew Jackson was elected on the populist platform, and when he came to power, he destroyed the Central Bank by vetoing the renewal of it's charter. The government's money was then taken out of the bank, and distributed among various private banks. Needless to say it didn't work out too well, and US was back with a national bank 30 years later. You can read more about immediate effects here: http://www.maths.tcd.ie/local/JUNK/econrev/ser/html/destruction.html. Or read about "1837-1862: Free Banking Era" on "history of central banking" in Wikipedia.

The bottom line is that populist philosophy looks good in theory, but doesn't work well in practice, mainly because "the common people" are greedy and stupid. The current system isn't perfect, but it's better than the alternatives.


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you need to read this: http://www.gold-eagle.com/editorials_05/petrov011606.html

Apologies for not responding to your full post yet - I've been quite busy. I'll get to it soon enough, though.

That's a fairly sensationalist article, making sweeping claims without providing justification. For instance this part

"If, for any reason, the dollar lost its oil backing, the American Empire would cease to exist."

The world's second largest economy -- Japan relies on yen, which isn't backed by gold, oil, etc, yet it functions just fine. In fact, most of the world's currencies aren't backed by anything.

If the world switches to another currency for international transactions, that will probably make the dollar weaker. However, there are indications that current dollar is too strong, so it needs to be weaker.

Weaker dollar makes American products more competitive abroad, hence giving a boost to domestic industry. So weaker dollar might cure current trade deficit that America is facing -- since weaker dollar means US will be exporting more and importing less.

I've read the other essay by that guy, and despite claiming a PhD from Ohio State, he shows a lack of understanding how US monetary policy works. For instance in his inflation article he promises more US inflation ahead and writes

"As a result, the government will aggressively pursue inflationary monetary policy because it clearly stands to benefit from it"

However, monetary policy is not controlled directly by the government, but is controlled by the Fed. In fact, in the past it happened that the government was telling the Fed to relax monetary policy, and the Fed refused (in 1982 the Congress tried to convince the Fed to lower it's rates)

Agree that it's sensationalist, but one must note that a large amount of international demand for USD comes from other country's need to pay for oil with it.

The dollar will probably slide in value as countries move away from the dollar, but that's just what's needed to fix the current trade deficit. Weaker dollar means domestic products will become more competitive internationally, and foreign products will become less competitive domestically, hence reducing imports, increasing exports.

The downside is that it will drive up the costs of things like gas, but keep in mind that European countries are paying over $5 for a gallon of gas right now.

(p.s. - don't really care about things like gas, here, as I walk or bike everywhere and don't really mind it, but I get what you're saying. I do feel obliged to inquire to you what a weaker dollar will NOT drive up the price of - please keep in mind that very many domestic manufacturers have moved their manufacturing operations to other countries due to a strong dollar for so long, so unless the dollar's slide in value happens VERY VERY slowly, we're in for quite an increase in the cost of almost everything.

If you have an idea of how it would happen as slowly as would be needed [considering we're going to have to re-build factories, and re-train incredible amounts of people in things that we currently no longer know...probably by having people from other countries train them], please enlighten me.

Oh, and no I don't walk or bike everywhere because I'm super-concerned about my health or the environment - I do so because everything I need to do, I can walk or bike to quite easily, and car insurance/etc. prices suck .)

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