Money and Banking

Economic Crisis Worsens …

Testifying before a Congressional committee in Washington July 10, 2008 both Treasury Secretary, Hank Paulson and Federal Reserve Chairman Ben Bernanke called for more powers to address the current economic crisis which is worsening, particularly in the financial area of the economy. With many large financial financial institutions lurching toward the abyss, the call for the government to “do something” is becoming resounding. Trouble is it is calling for the government to solve the problem that they were instrumental in creating in the first place seems facetious.

The Federal Reserve was created almost 95 years ago, signed into law by then President Woodrow Wilson on |December 22, 1913. The FED has presided over economic crises for most of the last century. From the booming ‘Roaring Twenties’, to the stock market crash of October 1929 and into the Great Depression of the 1930’s the Central Bank has had its hand on the wheel. Going from bad to worse in terms of severity, we are today in the midst of the latest caused by the sub-prime meltdown which is having repercussions across the entire financial system, which more and more seems to be a house of cards, which may ultimately collapse.

Calling for more medicine of the government interference variety to cure what ails the financial system today is like calling for more of the poison that has caused the ailment of the patient in the first place. There is no call for sound money and banking principles, but just to leave in tact the Central Banking system which has been gamed by the players in the financial institutions to their benefit, with financial chicanery that allowed them to make huge bets on markets with highly leveraged creativity. When markets did not respond the way these leveraged bettors anticipated, suddenly we were again in the midst of another financial crisis.

That a Treasury Secretary comes to his position from a Wall Street banking firm, who knows from the inside out the financial flim-flam these self-serving bankers have used to benefit themselves, now calls for the government to expand its power and influence over an already over-regulated and over-governed economy, it should be obvious to all that this isn’t a fix for the problem, but rather an overt attempt by the proponents of expanding state power – and diminishing freedom and individual rights – to destroy what remains of freedom.