An economics professor just destroyed the End the Fed crap at the Occupy Kansas City rally

[proud2BlibKansan]

It was beautiful. I wish I had taped it. He explained that ending the fed won't solve anything and the private corporations - the 1% - would just create their own fed without government regulations.

The libertarians in the audience are speechless.

[Pharaoh]

1. So you think we should

leave the Fed in the hands of private bankers and pay the interest on the money they print for us?

[proud2BlibKansan]

3. We need to watch what they do

His point was ending it won't really end it. It will be recreated.

[Pharaoh]

18. Why don't we just print our own money?

JFK was about to do that. We know what happened to him.

[Odin2005]

23. LOL, wut?

Gotta source for that nonsense> :rofl:

[tama]

38. Quick search, first hit:

On June 4, 1963, a virtually unknown Presidential decree, Executive Order 11110, was signed with the authority to basically strip the Bank of its power to loan money to the United States Federal Government at interest. With the stroke of a pen, President Kennedy declared that the privately owned Federal Reserve Bank would soon be out of business. The Christian Law Fellowship has exhaustively researched this matter through the Federal Register and Library of Congress. We can now safely conclude that this Executive Order has never been repealed, amended, or superceded by any subsequent Executive Order. In simple terms, it is still valid.

When President John Fitzgerald Kennedy - the author of Profiles in Courage -signed this Order, it returned to the federal government, specifically the Treasury Department, the Constitutional power to create and issue currency -money - without going through the privately owned Federal Reserve Bank. President Kennedy's Executive Order 11110 gave the Treasury Department the explicit authority: "to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury." This means that for every ounce of silver in the U.S. Treasury's vault, the government could introduce new money into circulation based on the silver bullion physically held there. As a result, more than $4 billion in United States Notes were brought into circulation in $2 and $5 denominations. $10 and $20 United States Notes were never circulated but were being printed by the Treasury Department when Kennedy was assassinated. It appears obvious that President Kennedy knew the Federal Reserve Notes being used as the purported legal currency were contrary to the Constitution of the United States of America.

"United States Notes" were issued as an interest-free and debt-free currency backed by silver reserves in the U.S. Treasury. We compared a "Federal Reserve Note" issued from the private central bank of the United States (the Federal Reserve Bank a/k/a Federal Reserve System), with a "United States Note" from the U.S. Treasury issued by President Kennedy's Executive Order. They almost look alike, except one says "Federal Reserve Note" on the top while the other says "United States Note". Also, the Federal Reserve Note has a green seal and serial number while the United States Note has a red seal and serial number.

President Kennedy was assassinated on November 22, 1963 and the United States Notes he had issued were immediately taken out of circulation. Federal Reserve Notes continued to serve as the legal currency of the nation. According to the United States Secret Service, 99% of all U.S. paper "currency" circulating in 1999 are Federal Reserve Notes.

More: http://www.john-f-kennedy.net/thefederalreserve.htm


*Executive Order 11110

AMENDMENT OF EXECUTIVE ORDER NO. 10289 AS AMENDED, RELATING TO THE PERFORMANCE OF CERTAIN FUNCTIONS AFFECTING THE DEPARTMENT OF THE TREASURY. By virtue of the authority vested in me by section 301 of title 3 of the United States Code, it is ordered as follows:

SECTION 1. Executive Order No. 10289 of September 19, 1951, as amended, is hereby further amended - (a) By adding at the end of paragraph 1 thereof the following subparagraph (j): "(j) The authority vested in the President by paragraph (b) of section 43 of the Act of May 12, 1933, as amended (31 U.S.C. 821 (b)), to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury not then held for redemption of any outstanding silver certificates, to prescribe the denominations of such silver certificates, and to coin standard silver dollars and subsidiary silver currency for their redemption," and (b) By revoking subparagraphs (b) and (c) of paragraph 2 thereof. SECTION 2. The amendment made by this Order shall not affect any act done, or any right accruing or accrued or any suit or proceeding had or commenced in any civil or criminal cause prior to the date of this Order but all such liabilities shall continue and may be enforced as if said amendments had not been made.

JOHN F. KENNEDY THE WHITE HOUSE, June 4, 1963

[dixiegrrrrl]

32. You might be interested in a basic history of how banking developed in the USA

for therein lies the key to the problem.

http://en.wikipedia.org/wiki/First_Bank_of_the_United_States

http://en.wikipedia.org/wiki/Federal_Reserve
go down to the "history" section..very enlightening

[Scuba]

52. Thank you. My vast universe of ignorance is now a tiny bit smaller. n/t

[StarsInHerHair]

24. we DO need Public Owned Banks though, the private Banking Cartels are NOT

there for the Public's interests

[PETRUS]

4. Speaking only for myself.

I think we should consider making the Fed totally transparent, and insist that all the governors are appointed by democratically accountable people. Right now, the Fed is not required to disclose much of what it does and a substantial portion of the governors are appointed by (private) bankers.

[AverageJoe90]

5. The private bankers have hijacked the Fed, true.

You're right, let's take it all back.

[Hippo_Tron]

42. The board of governors is entirely appointed by the President and confirmed by the Senate

The Open Market Committee consists of some regional bank Presidents, who are nominated from the boards of directors of the member banks, but must also be approved by the board of governors.

There was also a substantial piece of legislation in the last congress to disclose much of the fed's activities. And once they were disclosed, they went pretty much unnoticed.

[banned from Kos]

12. The Fed pays the Treasury interest - $78 billion last year

http://latimesblogs.latimes.com/money_co/2011/01/federal-reserve-2010-record-profit-financial-crisis-intervention.html

I can't believe how many people buy the Ron Paul bullshit.

[Odin2005]

22. The fed is run by a commitee apointed by Congress, not "private bankers".

That is the lie about the nature of the Fed. I mentioned to the OP.

[pa28]

31. That's true of the board of governors but not regional FR banks.

Take a look at the powerful New York Fed and it's board of directors.

http://www.ny.frb.org/aboutthefed/org_nydirectors.html

Two thirds of it's members are elected directly by member banks. Remember, the New York Fed initiated massive banker bailout measures such as AIG/Goldman and the maiden lane programs on their own with public equity as the final backstop. Like Bernie Sanders I agree there is a massive conflict of interest that should be publicly exposed and reformed.

[Hippo_Tron]

43. That's actually a very legitimate concern about the Fed

Unfortunately it's not going to get much notice, because this thread will just be filled with people arguing about Ron Paul's bullshit.

[FarLeftFist]

2. The Ron Paul crowd reeks of desperation.

[midnight]

11. Many without jobs and food are desperate...

[proud2BlibKansan]

15. Desperation and simple platitudes

Drives me nuts.

[Odin2005]

20. No, just angry people whiped up into anger at the wrong thing.

Many of them are not even Libertarians, they are just furious at the financial system as are we, but they are going after the wrong target.

[rucky]

6. Isn't that sort of how it already works.

Our cause should be "Own the Fed"

[xchrom]

7. Problems w/ the Fed are simple - 1) regulate & 2) enforce. Nt

[PotatoChip]

8. Did you get his name?

Maybe he's got some material online. I'd like to find some talking points to use on a rabid Ron Paul "End -the-Fed" acquaintance, if they are not too complicated to explain. I need reasonably short and to-the-point facts w/this guy. You know the type probably...

How was the rally? Were there a lot of people there?

[proud2BlibKansan]

17. Yes. I'll post a link when I get home.

I've heard him speak several times before. He's wonderful.

[xmas74]

21. I'd love to know who it is too.

I'll keep an eye out for any public lectures, if I can ever afford a babysitter for a few hours.

[proud2BlibKansan]

25. Here

Frederic Lee, M.A. Advisor, Professor
Post Keynesian Production Models, History of Economics in the 20th Century, and Market Governance.
[e-mail]

[Lasher]

40. Frederic S. Lee, Professor of Economics @ UMKC

http://cas.umkc.edu/econ/economics/faculty/Lee/

I wish I could have been there with you to hear his speech.

[IndyPragmatist]

50. A Keynesian would love the Federal Reserve

From my experience, the Keynesians in university settings are whackos. In my undergraduate and graduate economics degrees, very few would come out and endorse a specific economic policy. They may say they lean one direction, but a very small minority claimed to be a Keynesian or Austrian.

Saying that, those that did claim to be one or the other (or another view) were terrible. These were the professors that advisers told you to avoid. They are so stuck in their ideology that they learned decades ago that they fail to see the fallacies of their ideology in modern economics. It's most likely that he isn't a true Keynesian anyways. There are very few of them, because Keynes believed in a strict set of guidelines that went with the ideology, and very few follow these; instead they just pick and choose which theories they like and run with that.

Looking at his bio, he claimed to be a "Post-Keynesian". IMO, that is even worse. These type of people claim some of Keynesian theory doesn't work, but they still agree with other theory that is interlinked with the theory they don't believe in. It doesn't make any sense at all. I never had a Post-Keynesian in any of my studies, and I am glad I didn't. This guy sounds nuts from his bio.

http://cas.umkc.edu/econ/economics/faculty/Lee/docs/Bio.htm


From Pasinetti, Keynes and the Multiplier by ANDREW B. TRIGG & FREDERIC S. LEE
"That is, the paper shows that a scalar multiplier can legitimately be applied in a multisector economy."

About every economist I know would disagree with that statement, as would I. If you have 20 minutes to spare, read this paper http://cas.umkc.edu/econ/economics/faculty/Lee/courses/602/readings/model1.pdf. The arguements in this paper are very flimsy, but it gives a decent idea of how people who believe in things like a 1.75 multiplier come to their conclusions.

[Ichingcarpenter]

51. Thank you for your input and links

I think JFK had good reasons to want to get rid of the Feds.

[WillyT]

9. K & R !!!

:kick:

[midnight]

10. The Fed is a private bank and already operates independently of the U.S. Government..

The economist I would recommend everyone listen to who be Alan Grayson. http://dailybail.com/home/there-are-no-words-to-describe-the-following-part-ii.html


Alan Grayson (High Quality Version): Is Anyone Minding the Store at the Federal Reserve? http://www.youtube.com/watch?feature=player_embedded&v=cJqM2tFOxLQ#! In this video Grayson exposes the off balance sheets that seem to hide all the lending practices... And unless these criminals are held accountable... Shutting down the Fed Reserve could be the safest thing to do....

[chill_wind]

27. Something Greenwald wrote at the time

about the overwhelming House passage of the bipartisan Paul-Grayson Audit The Fed amendment, and the larger point around the politics of it seems truer than ever right now.

(1) Our leading media outlets are capable of understanding political debates only by stuffing them into melodramatic, trite and often distracting ”right v. left” storylines. While some debates fit comfortably into that framework, many do not. Anger over the Wall Street bailouts, the control by the banking industry of Congress, and the impenetrable secrecy with which the Fed conducts itself resonates across the political spectrum, as the truly bipartisan and trans-ideological vote yesterday reflects. Populist anger over elite-favoring economic policies has long been brewing on both the Right and Left (and in between), but neither political party can capitalize on it because they’re both dependent upon and subservient to the same elite interests which benefit from those policies.

For that reason, many of the most consequential political conflicts are shaped far more by an “insider v. outsider” dichotomy than by a “GOP v. Democrat” or “Left v. Right” split. The pillaging of America’s economic security by financial elites, with the eager assistance of the government officials who they own and who serve them, is the prime example of such a conflict. The political system as a whole — both parties’ leadership — is owned and controlled by a handful of key industry interests, and anger over the fact is found across the political spectrum. Yesterday’s vote is a very rare example where the true nature of political power was expressed and the petty distractions and artificial fault lines overcome.

(2) As Grim expertly describes, the effort to defeat the Paul/Grayson amendment came from all of the typical Washington power centers using all of the establishment’s typical manipulative tools:

Nov 20, 2009
http://politics.salon.com/2009/11/20/transparency_4/singleton/

[Hatchling]

13. How about nationalize the Fed? nt

[banned from Kos]

14. the Fed is an independent branch of goverment like the Supreme Court

but the Ron Paul propaganda is strong even here - few believe it.

[ThomWV]

26. Really? Which Article of the Constitution mentions it? The Supreme Court is in there, Article III.

What on earth do you mean its a branch of Government "like the Supreme Court? The court is a Constitutionally mandated branch of Government and the Fed is not only not like that - its absolutely nothing like that. It exists under no Constitutional authority what so ever.

[banned from Kos]

33. Same for the EPA and DOE then, right?

There are plenty of branches of government not mentioned in the Constitution. That means nothing. Congress formed the Fed in 1913 just like the EPA in - 1970ish.


And - its like the SCOTUS in that its decisions are independent of Congress and the President. The President appoints the Fed Board/SCOTUS and Congress confirms each Governor/Judge.

[WinkyDink]

29. Except not.

[Selatius]

35. Yes and no.

It was created by a law passed by Congress, but it isn't specified at all in the US Constitution. Only the US Treasury was established under the auspices of the Constitution with the ability to create money. The Board of Governors at the Fed is appointed by the president, with the consent of the Senate, but the regional branches of the Federal Reserve are chaired and operated by regional banks.

[EdMaven]

16. Certainly. Before the Fed was the robber baron era -- concentrated wealth, bank failures,

ten-year depressions, etc.

Things were little different.

The only thing the Fed changed (my guess) is to channel higher-up control over the banking sector into fewer hands.

Banking used to be more of a free-for-all before the Fed. If you had the capital you could start a bank; best way to make bank is to own one.

[Odin2005]

19. A lot of folks here on DU believe that same ignorant nonsense about the Fed.

It's not just a Libertarian thing, it's widespread among fellow Progressives because of the constant repitition of the lie that the Fed is somehow a private corporation, it isn't. It's a national bank run by a committee appointed by the federal government.

[WinkyDink]

30. Now, which part of the following do you think are the operative words?

The Federal Reserve System has both private and public components, and was designed to serve the interests of both the general public and private bankers.

http://en.wikipedia.org/wiki/Federal_Reserve_System

[banned from Kos]

34. RESERVE is the operative word - By law the private bankers must

place a certain % of their deposits on reserve with the Fed (currently $1.6 trillion). This is to protect the public from bank runs where depositors lose all their money (common in the 1840-1913 time period). The final piece of the puzzle was the FDIC in 1932.

So, there is PRIVATE money in the PUBLIC Reserve.

[provis99]

46. the regional feds have the power, not the national committee.

You're the one guilty of believing nonsense, not those you accuse.

[WinkyDink]

28. The Federal Reserve IS private.

n Lewis v. United States,<3> the United States Court of Appeals for the Ninth Circuit stated that: "The Reserve Banks are not federal instrumentalities for purposes of the FTCA , but are independent, privately owned and locally controlled corporations."
http://en.wikipedia.org/wiki/Federal_Reserve_Bank#Banks

[krabigirl]

44. Yep.

[RegieRocker]

36. Yea right. The corporations are going to print the money?

LOL yea they would all agree on that one I bet. The federal reserve needs to be taken back by the government to it's status before 1917. I guess he thinks that the fed didn't work back then.

Woodrow Wilson
A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men ... e have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world—no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men.
http://www.archive.org/details/NationalEconomyAndTheBankingSystemOfTheUnitedStates

John Adams, one of our founding fathers: "All of the perplexities, confusion, and distress in America arises, not from the defects of the Constitution or Confederation, not from want of honor or virtue, so much as from DOWNRIGHT IGNORANCE OF THE NATURE OR COIN, CREDIT, AND CIRCULATION.'"*** Sounds like this professor is ignorant of the fed and money or he has ulterior motives.

[tama]

39. Not professor of economics

in the true sense of the word, just a professor of money interests.

[quaker bill]

47. They used to print "script".

[Xolodno]

37. The problem is this....

...weather you like it or not, "banking" has evolved into a fourth branch of government due to advancing of economies. Kill the Fed and banks will print their own money...who wants to trust that? No one and we'll go back to trading gems, gold, silver and other useless minerals. Not to mention, create a run on strip mining. Right now the Fed is a pseudo-government entity. Yes it needs to be void of political influence, but at the same time, it can't be excluded of public oversight. I don't believe anyone, including Thomas Jefferson knew what the banks would become, that being an evil but unfortunate neccesary evil. What we need is a system that includes lifetime appointments to avoid the political flavor of the day...but at the same time have oversight to make sure they are not following pure ideaology and are adjusting to economic changes. Easier said than done sadly.

[tama]

41. Kill the Fed

And order Treasury to print money. Preferably created as citizens salary, if you ask me, not as debt and interest.

[RegieRocker]

48. Yes that is the problem "Money as debt". If most only had some clue

as to w what had is going on.

[krabigirl]

45. they've already done that. nt

[rgbecker]

49. Could Bitcoin be the answer?

http://www.newyorker.com/reporting/2011/10/10/111010fa_fact_davis

[tama]

54. Partial answer, yes.

The technology works and proves functioning monetary community can be created by grass roots activism and participation - but IMHO Bitcoin "first come first" launching strategy still lacks in issue of social justice. Very valuable example of how new global/local socially just and sustainable monetary systems can be created, but leaves the social justice part still to be evolved. Citizen's salary is my best answer to the social justice question of money creation.

[Bucky]

53. Interesting. The Fed was invented by Progressives to control Gilded Age boom/bust cycles

To a certain extent, it's been co-opted by large financial institutions. They tried to hijack it back in the 1910s when the Fed was cooked up by populist Dems. But it still performs a necessary function in controlling monetary supply. Getting rid of it is more Libertarian lunacy. Such a cure is akin to fixing an alignment problem by removing your axel.

[banned from Kos]

55. Exactly - many so called progressives here parrot the Ron Paul 'End the Fed' nuttery

and want a return to "sound money" - a code for a gold standard where banks printed their own paper currency like in the 19th century.

[Ichingcarpenter]

63. And some people just post nuttery

without backing up their claims.

[tama]

56. Obviously

Fed has failed in controlling boom/bust cycles, just created the hugest most humongous debt balloon boom ever that has been bursting and busting big way since 2008. So there goes that justification...

If monetary economics is real science and not dogmatic ideology/Mammon religion, the empirical experiment of Fed has been falsified by empirical data. (Told ya so, Marxist etc. economy would say and said, but... not very polite or constructive to remind that "told ya so" when youre standing in your own puddle after your monetary diaper failed and leaked and need someone to help wipe your mess)

[banned from Kos]

57. one simple graph to prove you are wrong

http://en.wikipedia.org/wiki/File:US_household_and_nonproft_net_worth_1945-2007.gif

(And its over $60 trillion today)

Now the fact that wealth is distributed poorly is a political matter that needs correction.

[Name removed]

58. Deleted message

Message removed by moderator. Click here to review the message board rules.

[dd2003]

59. The fed has been so helpful

They have printed tons and tons of money so that the dollar has been completely devalued. They give billions in secret loans to their banker friends in Europe. They pound the table and give more QE when banker friends are at threat of losing their bonus's and Americans are scraping the grounds for scraps. Tell me what value does the Fed give?

[proud2BlibKansan]

60. That's not the point

The point is ending it would just be worse. It won't go away. At least in its present form there is some oversight. Perhaps not enough but better than none.

[yella_dawg]

61. Interesting idea there

Two distinct economies. One for corporate terrorists, and one for ordinary folk. Tight government controls on the interface between the two. Congress controls the money supply as intended by the constitution and the wealthy little boys can play to their heart's content.


Glass-Steagall indeed.

[lib2DaBone]

62. The problem with the FED is that it's a PRIVATE bank. Nationalize the Fed.

Nationalize the Fed Banks. Bring control of our money back to the American people.


Woodrow Wilson said after creating the Federal Reserve...



I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world. No longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men.
~ Woodrow Wilson