History repeating itself? President Obama has been accused by some economists of making the same mistakes policymakers in the US made in the Great Depression, which followed the Wall Street crash of 1929.
His policies even have the potential to consign the US to a similar fate as Argentina, which suffered a painful and humiliating slide from first to Third World status last century, the paper says.
There are “troubling similarities” between the US President’s actions since taking office and those which in the 1930s sent the US and much of the world spiralling into the worst economic collapse in recorded history, says the new pamphlet, published by the Institute of Economic Affairs.
In particular, the authors, economists Charles Rowley of George Mason University and Nathanael Smith of the Locke Institute, claim that the White House’s plans to pour hundreds of billions of dollars of cash into the economy will undermine it in the long run. They say that by employing deficit spending and increased state intervention President Obama will ultimately hamper the long-term growth potential of the US economy and may risk delaying full economic recovery by several years.
The study represents a challenge to the widely held view that Keynesian fiscal policies helped the US recover from the Depression which started in the early 1930s. The authors say: “[Franklin D Roosevelt’s] interventionist policies and draconian tax increases delayed full economic recovery by several years by exacerbating a climate of pessimistic expectations that drove down private capital formation and household consumption to unprecedented lows.”
Although the authors support the Federal Reserve’s moves to slash interest rates to just above zero and embark on quantitative easing, pumping cash directly into the system, they warn that greater intervention could set the US back further. Rowley says: “It is also not impossible that the US will experience the kind of economic collapse from first to Third World status experienced by Argentina under the national-socialist governance of Juan Peron.”
The paper, which recommends that the US return to a more laissez-faire economic system rather than intervening further in activity, has been endorsed by Nobel laureate James Buchanan, who said: “We have learned some things from comparable experiences of the 1930s’ Great Depression, perhaps enough to reduce the severity of the current contraction. But we have made no progress toward putting limits on political leaders, who act out their natural proclivities without any basic understanding of what makes capitalism work.”
The authors of the pamphlet, Charles K. Rowley and Nathanael Smith, give their views.
So much for the ongoing secrecy of the nation’s independent central banking system. A new Rasmussen Reports national telephone survey finds that 75% of Americans favor auditing the Federal Reserve and making the results available to the public.
Just nine percent (9%) of adults think that’s a bad idea and oppose it. Fifteen percent (15%) aren’t sure.
Over half the members of the House now support a bill giving the Government Accounting Office, Congress’ investigative agency, the authorization to audit the books of the Federal Reserve Board.
Support for the bill has grown now that the Obama administration is proposing to give the Fed greater economic regulatory powers. The Fed which sets U.S. monetary policy was created as an independent agency to keep it free of politically-motivated interference.
Fed Chairman Ben Bernanke in a town forum filmed on Sunday which is airing this week on PBS stations said he is strongly opposed to the audit legislation. “I don’t think the American people want Congress running monetary policy,” he said. Howard Rich addressed this issue in a recent commentary and concluded it was important to locate the “trillions of dollars” the Fed has spent over the last year-and-a-half.
The new survey finds that an overwhelming majority of Americans in every demographic category – including age, gender, political affiliation, race and income – disagree with Bernanke and favor auditing the Fed to make its secretive deliberations public.
As momentum builds for Ron Paul’s efforts to audit the Fed, a new Gallup poll shows that Americans are turning against the Federal Reserve, with just 30 per cent saying the agency is doing a good job.
35 per cent rate the job the Fed is doing as “only fair” and 22 per cent say it is doing a “poor” job.
The contrast compared with when the question was last asked in 2003 is clear. Six years ago, just 5 per cent thought the Fed was doing a “poor” job, while 53% thought it was doing a “good/excellent” job.
The Fed is bottom of the pile when compared to the ratings received by other agencies in the poll (we hesitate to call the Fed a “government agency” because it isn’t). The IRS and the FDA are the other two least popular agencies.
According to Gallup editor in chief Dr. Frank Newport, “Americans are blaming to some degree the actions or inactions of the Federal Reserve board” for the economic turmoil.
Increasing skepticism towards the role of the Federal Reserve arrives alongside efforts on behalf of Congressman Ron Paul to audit the Fed with his widely supported H.R.1207 bill.
The legislation would amend existing law to allow the Comptroller General to audit the Federal Reserve Board and its member banks.
Fed Chairman Ben Bernanke seems frightened to death at what might be revealed if the Federal Reserve were forced to open its books and has been busy scuttling around lying about the bill in order to try and shoot it down.
During an appearance on PBS NewsHour which will be aired later this week, Bernanke claims that the bill will hand Congress the power to run monetary policy in the United States.
“This is an odd claim,” writes McCullagh. “If you read the bill (H.R.1207), it simply amends existing law to say “under regulations of the Comptroller General, the Comptroller General shall audit” the Federal Reserve Board and its member banks.”
Bernanke has proven that he will stoop to any level in order to try and sink the bill, which has the support of over half of the U.S. House of Representatives, even committing an act of economic terrorism last month when he threatened a collapse of the dollar and the entire financial system if the bill was passed.
One thing that an audit of the Fed might shed more light on is the destination of trillions of dollars in TARP funds, which the Federal Reserve refuses to disclose even after a lawsuit was filed by Bloomberg, as well as the destination of half a trillion dollars that was given to foreign banks.
History repeating itself? President Obama has been accused by some economists of making the same mistakes policymakers in the US made in the Great Depression, which followed the Wall Street crash of 1929.
noworldsystem.com 