PoliticalAction.com Blog

Texas Straight Talk
Rep. Ron Paul (R) – TX 14

The remarkable confluence of recent events has brought unprecedented but very welcome attention to both U.S. monetary policy and the global political economy in general. First, Federal Reserve Board Chairman Ben Bernanke recently announced that the Fed would embark upon another round of monetary easing by purchasing $600 billion worth of U.S. treasury debt. This amounts to admission that markets have run out of patience with our profligacy and therefore our own central bank literally must serve as the buyer of last resort for treasury debt.

Second, World Bank President Robert Zoellick openly suggested that gold could play a helpful role in the global monetary system by serving as reference against more volatile fiat currencies. This is almost heresy coming from a neoconservative globalist like Mr. Zoellick. It hints at an obvious but unspoken truth that is anathema to politicians and central bankers alike, namely, that gold could be viewed as money.

Finally, Mr. Obama attended the G20 summit in South Korea last week and found a very chilly reception for his vision of American economic policy. Mr. Obama argued for continued worldwide stimulus via continued debasing of the U.S. dollar to bolster American exports. Several powerful European and Asian finance ministers however rejected this approach out of hand as nothing short of a currency war. They are committed to austerity measures at home and don’t want to let the U.S. simply monetize its past sins at their expense.

All these events culminated in a tremendous amount of political and media scrutiny aimed at the Fed. Ordinary Americans are demanding answers and accountability and they are putting heat on their political representatives in Washington to end the cozy independence from congressional oversight the Fed has enjoyed for so long.

In the 35 years I have been studying, speaking and writing about monetary policy I have never before seen Congress or the financial press pay much attention to the Fed. Monetary policy has always been considered boring on Capitol Hill, something left to remote policy wonks far away from the den of presidential or congressional politics. Congress always has been eager to leave Fed governors well alone with no oversight or accountability as long as they played along and papered over the growing budget deficits.

But it’s amazing what a global economic meltdown will do to the political and media landscape. In just two short years the Fed has become the hot topic and a lightning rod for criticism. While it is gratifying to see so many formerly uninterested politicians, economists, talk show hosts and pundits suddenly rally to attack the Fed, one can only wonder whether they truly understand that central banking is inherently incompatible with our Constitution and a free market economy.

In other words, it’s not enough to show outrage at the latest Fed action or argue about the relative merits of Mr. Bernanke compared to his predecessors. To reclaim our dollar and our economy Americans must oppose central banking per se. Fiat currencies cannot be reformed or managed. They are fundamentally subject to ruinous debasement courtesy of the political and ruling class. History shows that this is true in all nations, at all times.

Texas Straight Talk – A weekly column
Rep. Ron Paul (R) – TX 14

Last week politicians in Washington made a few things clear about how they really feel about the state of the union. First, they are beginning to hear the growing discontent with the size and scope of government and the broken promises that keep piling up. Certain events in Massachusetts recently made that statement loud, clear and unavoidable. In the face of those events, the powers that be made the determination that some populist rhetoric was in order, and the idea of a spending freeze in Washington was proposed, albeit with several caveats. These caveats to the proposed spending freeze ensure that we are not at any real risk of actually doing anything about spending.

First of all is timing. It wouldn’t go into effect until 2011, which allows plenty of time to increase spending levels quite a bit before they are frozen. If the administration really understood and cared about our spending problems they would not freeze spending a year from now, but cut spending immediately and significantly. But, spending cuts almost never happen in Washington, and they are not likely now or a year from now – if the politicians have anything to say about it.

The second caveat is the huge areas of the budget that are shielded from this freeze. The entire State Department budget is exempt, as are all entitlements, all military industrial spending and almost all foreign aid. Fully 7/8 of federal spending is excluded from this freeze, and some areas to be frozen were actually set to decrease, which means a freeze actually guarantees a higher level of spending.

Especially insulting is the idea that in spite of our own fiscal problems at home, taxpayer dollars will continue to be sent overseas in the form of foreign aid where it often does more harm than good. When need is demonstrated to Americans and they can afford it, they can be counted on for a tremendous outpouring of private, voluntary charity to worthy aid organizations, as we recently saw in Haiti. By contrast, government-to-government aid is taken from the poor by force and too often enriches the corrupt. It is counterproductive and wasteful. But the idea of eliminating, freezing, or reducing foreign aid is not up for serious debate any time soon.

The third caveat is what is included in the freeze that would make it politically impossible to pass Congress, for example air traffic controllers salaries, education, farm subsidies and national parks.

I do not necessarily want a cut in spending in this country – I just want to change who does the spending. The spending should be done by the people who earn the money, if they choose, and on what they choose, without any government interference. That is what makes the economy work. Politicians should stick to the very limited roles given them by the constitution instead of allocating such a sizeable portion of our capital and intervening through regulations and tax policy. But because politicians have disregarded the constitution, and the people have no idea what rule they will break next, there is already a very real spending freeze underway in this economy, by the people. If government would stick only to what it was authorized to do, and leave the rest to the people, most of these problems would resolve themselves.

January 25, 2010

Dear Pennsylvania Subscriber,

After a full year of rope-a-done and refusing to have his Federal Reserve audited, Ben Bernanke is on the ropes and could be knocked out for re-nomination.

Campaign for Liberty activists are in the lead insisting “No Audit, No Bernanke.” Please immediately call Senator Bob Casey and Senator Arlen Specter at the numbers below and tell them (again, if you’ve already called) “No Audit, No Bernanke.”

Here’s what’s going on:

Campaign for Liberty launced a nationwide fight against a bailout for Bernanke last week. Now we are following it up with phones, email and banner ads targeting over a dozen swing-vote senators.

The Senate is boiling over with outrage about the Fed’s abuse of the TARP program, bailouts, and money supply, as well as its refusal to submit to a full and complete audit.

Now is the time to deal the knockout blow!

Please call your senators at the numbers below and join in the fight:

Senator Bob Casey: 202-224-6324
Senator Arlen Specter: 202-224-4254

Tell them that Ben Bernanke must not be confirmed without an up or down roll call vote for Audit the Fed on the Senate floor.

This fight is really coming to a head, and the decision could will likely come in the next few days. Please call now.

In liberty,

John Tate

P.S. Thanks to the efforts of patriots like you, Ben Bernanke’s days of secrecy at the Federal Reserve may be numbered!

That’s because his confirmation is being held up until the Senate votes on Audit the Fed. Please call your senators at the numbers above and tell them plain and simple: “No Audit, No Bernanke.”

Texas Straight Talk – A weekly column

Rep. Ron Paul (R) – Texas Congressional District 14

Legalize Competing Currencies

Much has been made recently about the supposed economic recovery. A few blips in a few statistics and many believe our troubles are all over. Of course, they have to redefine recovery as “jobless” to account for the lack of improvement on Main Street. But the banks have money, Wall Street is chugging along, and the administration would like to get on with other agendae.

They have even set up a commission to investigate the crisis as if it were all in the past.

The truth is that Americans are still losing jobs, the Fed is still inflating, and more regulations are in the works that will prevent jobs and productivity from coming back. We are on this trajectory for the long haul. The claim has been made many times that this administration has only had a year to clean up the mess of the last administration. I wish they would at least get started! Instead of reversing course, they are maintaining Bush’s policies full speed ahead. They are even keeping the Bush-appointee in charge of the Federal Reserve! They are not even making token efforts at change in economic policy. And for all the talk of transparency, we hear that some powerful senators will do all they can to block a simple audit of the powerful and secretive Federal Reserve.

We have been on a disastrous course for a long time. The money supply has doubled in the last year, our debt is unsustainable, the value of the dollar is going to continue its drop, and those Americans who understand where we are headed feel helpless and held hostage by foolish policy makers in Washington. When the bills finally come due and the dollar stops working we are in for some real social, economic and political chaos. That is, unless we take some major steps now to allow for a peaceful transition in the future. These steps are laid out in my legislation to legalize competing currencies.

First of all, no one should be compelled by law to operate in Federal Reserve notes if they prefer an alternative. We should repeal legal tender laws and allow Americans to conduct transactions in constitutional money. Only gold and silver can constitutionally be legal tender, not paper money. Instead, it is illegal to conduct business using gold and silver instead of Federal Reserve notes. Simply legalizing the Constitution should be a no-brainer to anyone who took an oath of office. Consequently, private mints should be allowed to mint gold and silver coins. They would be subject to fraud and counterfeit laws, of course, and people would be free to use their coins or stay with Federal Reserve notes, as they see fit. Finally, we should abolish taxes on gold and silver, which puts precious metals at a competitive disadvantage to paper money.

The Federal Reserve is a government-sanctioned banking cartel that has held far too much power for far too long and is in the end stages of running the dollar into the ground, and our economy along with it. The very least Congress can do, if they are not willing to abolish the Fed, and perhaps not even conduct a serious audit of it, is to allow citizens the freedom to defend themselves from being completely wiped out by their monopoly power.

Jake Towne, independent candidate for US Congress in PA-15, today announced his support of HR 4248, the Free Competition in Currency Act of 2009, and urges the current incumbent to co-sponsor the bill. The short 374-word bill is inline with the campaign’s theme of sound money and would revoke legal tender laws enabling Americans to use other currencies if they so choose to compete with the unbacked script currency issued by the Federal Reserve.

Towne just released his “Sound Money and Jobs” campaign plank (attached in PDF) which explains to all residents the dire importance of sound money, and provides evidence linking the troubles of the American economy to the governments’ actions to devalue the dollar and suppress the gold price. While unknown to most Americans, gold is one of the world’s largest financial markets, trading over $20 billion USD per trading DAY on the London exchange alone.

The campaign’s last “Towne” Hall was well attended by many newcomers, and the next event open to the public at no cost is Monday, February 1, 2010 at the Bethlehem Township Community Center, 2900 Farmersville Road at 7 PM. (Details here.)

Towne is not endorsed by nor affiliated with the sponsor of HR 4248, Pennsylvania-born Dr. Ronald Paul. Paul also recently introduced HR 1207, a bill to audit the Federal Reserve – which has never been thoroughly audited since its founding in 1913. Towne successfully petitioned the incumbent Congressman for several months before he agreed to co-sponsor this no-brainer piece of legislation and hopes the same can be done here. (The incumbent’s fundamental lack of understanding on monetary policy is demonstrated in this question I asked at a town hall.)

January 21, 2010

Contact: Jake Towne

Email: TowneForCongress@gmail.com

Website: TowneForCongress.com

Full Page Article

Trillion-dollar interventions in the economy merit scrutiny by taxpayers and their representatives.

By RON PAUL AND JIM DEMINT

For nearly a century the Federal Reserve has operated in the shadows, away from the prying eyes of Congress, journalists and the American people. Created in 1913, the Fed was given enormous responsibility to protect the value of our currency. Yet in the last 96 years the U.S. dollar has lost more than 95% of its purchasing power. The Fed’s unprecedented actions over the past year in attempting to stabilize the financial system have now forced it into the spotlight, and caused millions of people around the country to question the opacity of the Fed’s financial transactions.

While the Fed is more transparent now than it was 20 or 30 years ago, there is still a long way to go. If the Fed were fully transparent, organizations such as Bloomberg and Fox News wouldn’t have to sue its board of governors to receive materials that should be available through Freedom of Information Act requests. These include information on which banks and companies received loans and for what amounts after the 2008 financial meltdown.

One puzzling assertion made by the Fed and its supporters is that the Federal Reserve has some sort of independence from the government and independence in undertaking monetary policy. Nothing could be further from the truth. The Federal Reserve is a government-created banking monopoly, and its top decision makers are appointed by the president and confirmed by the Senate. If they do not perform satisfactorily in the eyes of politicians, they will not be renominated.

The Fed has also, for the past three decades, been required to engage in monetary policy with the goal of maintaining stable prices and full employment. Since the natural trend over time is for prices to decrease, a mandate to maintain stable prices is a mandate to pursue an expansionary monetary policy and inflate the money supply to counteract the lower prices we would expect from increased productivity.

The Fed chairman is required to appear twice a year before Congress to explain the Fed’s actions, and how the Fed is complying with its mandates of stable prices and full employment. However, the idea that this constitutes any sort of oversight is laughable.

Each congressman who questions the chairman receives only a few minutes in which to ask questions and receive answers. Having been on the receiving end of Alan Greenspan’s notoriously obtuse “Greenspan-Speak” answers and Ben Bernanke’s similarly convoluted statements, we can assure you that the process is completely ineffective at getting any real answers.

No matter how direct the questions are, Fed chairmen answer with a vagueness common to bureaucrats. The whole process is window dressing for public consumption, not any sort of attempt to exercise oversight or gain any real insight into the Fed’s actions.

What is needed is a full audit of the Fed, something that has never happened. We need to know who the Fed is giving money to, what types of securities are being purchased and what backs those securities, how much money is being paid for those securities, etc.

While Rep. Mel Watt’s (D., N.C.) efforts to audit the new lending facilities authorized to bail out private firms such as AIG is a step in the right direction, it is still just a first step. These facilities have the same effect on the money supply as securities purchased through open market operations. Why should securities placed on one line of the Fed’s balance sheet be subject to audit while the exact same securities placed elsewhere on the balance sheet are not subject to audit? The loopholes need to be closed.

In coming weeks we plan to offer companion amendments to legislation already before the House and Senate that will open the Fed up to a complete audit. The amendments set a six-month time lag on the publication of previously unreleased audit data to address the Fed’s concerns that actions undertaken in support of monetary policy would immediately be politicized. The transcripts and minutes of the Federal Open Market Committee meetings would continue to be made public at the Fed’s discretion, with unpublicized details of meetings not subject to any additional scrutiny. Finally, the amendments make clear that the purpose of the audits is not to interfere with or dictate monetary policy.

As strong opponents of government intervention into the economy, we do not want to see Congress directly dictate monetary policy. But while the Fed is involved so heavily in monetary policy and its actions so heavily influence the future of our economy, it is necessary that it be fully transparent. Interventions into the economy on the order of trillions of dollars cannot continue to escape public scrutiny. American taxpayers deserve better.

Mr. Paul is a Republican congressman from Texas. Mr. DeMint is a Republican senator from South Carolina.

I have been a supporter of Ron Paul since his 2008 presidential run.
Here he talks more sense in ten minutes then most other politicians
talk in a lifetime. Ron Paul is my President.

Texas Straight Talk – A weekly column
Rep. Ron Paul (R) – TX 14

Last week a new bill was introduced in the Senate to audit the Federal Reserve. Some backers of my bill HR1207 and the existing Senate companion bill S.604 were a little miffed at this, but depending on how you think about it, this new legislation poses no great threat to our efforts.

With the economy in shambles, people are looking for answers – not just because of lost savings on Wall Street, but because of lost houses on Main Street. Because of the many problems we face, the Federal Reserve and its powers over the economy have come under scrutiny. This translates into a lot of political pressure on Congress. With all the House Republicans signed on as co-sponsors and over half of the Democrats, HR 1207 has enormous bipartisan support. It would be disingenuous for Washington not to embrace the principles behind this bill after all the promises for transparency. How can one credibly argue for more transparency in government in one breath and defend the secrecy of the Federal Reserve in the next?

However, there is still very powerful resistance to the disclosures that HR 1207 would require and efforts to weaken it will continue to pop up before this issue is settled.

The good news is that Washington is responding and the Federal Reserve has become the issue. Concerned Americans need to keep the pressure on by continuing to define what we want, and what we do not want.

One major concern is that HR 1207 constitutes some kind of power grab for Congress. Congress would not do a better job dictating interest rates or managing money supply growth than the Federal Reserve does for exactly the same reasons: Congress is not the free market. Any select group of people, no matter how wise and educated, simply cannot replace the wisdom of the market. HR 1207 does not seek to replace the wisdom of the Fed with the wisdom of Congress. That would be a giant step backwards. HR 1207 simply asks for full disclosure, and I am agreeable to allowing for a reasonable lag time to calm the fears that Congress intends to dictate monetary policy.

What we do want, what we insist upon, is that no longer will decisions that carry so much economic weight be made in absolute secrecy. We want to know what arrangements the Fed makes with other governments and central banks. We want to know who is benefitting from the actions of the Fed and what deals are being made. The Fed is already reacting to pressure by scaling back its liquidity facilities and returning to more traditional monetary policy through direct asset purchases. With nearly $800 billion in mortgage-backed securities on its books already, $800 billion in Treasury securities, and no real limit to what the Fed can acquire, there is a tremendous opportunity for malfeasance. We need to know who the Fed deals with, what they buy, how much they spend, and who benefits. As good as any step towards Federal Reserve transparency is, anything less than full disclosure at this point is unacceptable.

Dear Friend of Liberty,

Seventy-five percent of Americans agree with us that it’s time to thoroughly and completely audit the Federal Reserve System.

Every Republican and over one hundred Democrats in the House of Representatives have signed on as cosponsors of HR 1207. Almost a quarter of the Senate has gotten on board with S 604.

So what does this tell us?

It’s time to go get the rest!!

Last month, I announced that we would be holding an Audit the Fed Mass Action Event starting in the last couple weeks of August and culminating in a nationwide Mass Action Day on September 15.

Since then, C4L members have been knocking on doors, standing outside stores, attending county fairs, and gathering petition signatures in support of S 604.

On September 15, C4L National will deliver over 100,000 petitions to Capitol Hill while members across the country deliver the petitions they’ve collected to their senators’ local offices. Many of your fellow members will be holding rallies outside those offices, and several have contacted local media about covering the event.

Here are three ways you can help ensure the success of this Mass Action Event:

1.) Gather petitions – Hit the streets! Make sure your senators hear from as many people in your state as possible. Let’s spread the word and add to the seventy-five percent of Americans who support our cause. You can download petitions at CampaignforLiberty.com and AuditTheFed.com.

2.) Call your senators – Starting Tuesday, September 8, C4L members will be calling their senators’ offices to urge them to cosponsor S 604. Our objective is to keep their phones ringing off the hook by having members call every day for the week leading up to the petition drop. Commit to calling your senators by signing up here.

3.) Show up on September 15 – Congress counts on grassroots activists being content with just calling and sending petitions. To make sure they get our message that it’s time to Audit the Fed, we’re going to take our cause right to their offices in person. These events will be as effective as you make them. Show your senators that you are serious about real reform by rallying with your fellow members right outside their offices.

State and local coordinators and leaders have been working hard to create the most effective and efficient plans for September 15’s petition drop. Click here to find out how to take action in your area.

We were able to secure the support of almost two thirds of the House with your hard work gathering petitions, calling, and showing up at your representative’s offices. This could be the event that tips the scales in the Senate!

As we also announced last month, we’re adding an extra incentive. The person who gathers the most signatures in each state will win a pocket Constitution and a copy of Dr. Paul’s new book, End the Fed, both autographed by Congressman Paul himself.

And whichever state collects the most signatures (as a percentage of population) will win a $1,500 gift certificate to the Campaign for Liberty store!

Our representatives and senators are expecting to settle back in to business as usual when they return to D.C. after Labor Day. They think that they can leave your opinions and concerns behind in their districts while they continue to work on completely taking over our health care and finding other new ways to run our lives.

Let’s show them that their top priority should be finding out how the Federal Reserve has doled out trillions of our dollars, what deals they have locked us into with foreign central banks and governments, and why they refuse to disclose the details.

The day after our petition drop will mark the official release of End the Fed. This comprehensive look at the Federal Reserve System and its disastrous effects on our lives and country is sure to be a powerful tool with which to convince your family, friends, and neighbors that it’s time to restore our economy by reinstituting a sound money system.

A year ago, no one would have said we could make an audit of the Fed into a national, mainstream issue. Join us on September 15 as we show the political establishment, entrenched bureaucrats, and the media that our grassroots Revolution is more energized and determined to take back our country than ever before.

In Liberty,

John Tate
President