Four years is a long time for some people. When one is my age, however, it’s not so long; and my memory isn’t so short. I’m not one for grudges, but the example from 2010 of sheer, unadulterated mass media inflation, bubble and economic freedom fear mongering, as if M=P instead of MV=PY, that I have to share with you today gives me pause to reconsider. This intellectually dishonest anti-government propaganda was disguised as a history lesson and put out there in front of an uneducated audience of somewhere in the single digit millions.
I certainly am not a lover or defender of the Fed. But the discussion about the Jeckel Island “conspiracy” goes way off the rails of being anything descriptive of the Fed as it exists today. They don’t talk about the FOMC, when it was created, or that the members of the Board of Governors, seven of them, are all appointed by the President and confirmed by the Senate; and the rotating members for the regional Fed branches, five of them, are subject to approval by the Board of Governors. In addition, any of the members of the Board of Governors can be removed by the President. And fortunately, for my purposes, the person who posted the video didn’t cut out the commercials. Gold Line anyone?
The magnitude of the lying in this video is breathtaking. Even worse is the potential impact of such dishonesty in the form of scaring people when they were already scared enough, and what the political backlash to doing what needed to be done meant for the millions who were left destitute. All for what? I wonder what the motivation might have been. Was it to pimp gold or cover for the Republican Party after the Bush Administration and Senate Republicans threw Milton Friedman under the bus and made such a mess of the monetary system by appointing people like Kevin Warsh? I report, you decide.
So. Maybe Beck can explain how bubble fear mongering is compatible with economic freedom. Or maybe he can explain how the op-ed by Kevin Warsh that encouraged the members of the FOMC to pull a soft coup on the political system, having unelected bureaucrats take over congress and leave the economy weak until it gets its way is better than transitioning power by the ballot box. The Fed he supposedly hates is supposed to just take over the government in the in the immediate aftermath of a severe nominal shock instead of fixing what it broke – which, by the way, won’t be remedied by a gold standard. Sure, let’s just create perverse incentives for the Federal Reserve to create even more of them and we won’t have any Congress left in the course of a decade. If he thinks we have no voice now, just wait.
And I am not really wondering whether Beck can explain any of this. It’s not a question of can, but must. For someone so concerned with the truth, he’s pretty quiet about being THAT wrong. Maybe he just hopes you’ll forget about how much money has been lost on gold, with more to come. See – do the math. Just for some back of the envelope figuring: If you bought gold in ~1979 and the price was ~$1400 per ounce, how many dollars would you need today to equal that price? To make it easy, I figure 3% inflation per year for 34 years. At an average of 3%, the price would be $2828. And the $1400 range was the high 34 years ago. But it didn’t even come close over the last few years. Subtract $1400 from $2828 and the amount you’re behind just breaking even is quite alarming.
None of what he said here in this video and on other occasions where he did 20-minute rants about the Fed made any sense. But it was the Market Monetarists who were saying that it doesn’t make any sense, and getting abused for it. Perhaps on another occasion for some giggles I’ll download and repost the abuse I received when I was attempting to set it out there straight. I learned a new word for the people who abused me – ijits.