Daryl Cagle / Cagle Cartoons
By Ron Paul
This month marks the seventh anniversary of the bursting of the housing bubble and the subsequent economic meltdown. The mood in Congress following the meltdown resembled the panicked atmosphere that followed the September 11th attacks. As was the case after September 11th, Congress rushed to pass hastily written legislation that, instead of dealing with the real causes of the crisis, simply gave the government more power.
Just as few understood the role our interventionist foreign policy played in the September 11th attacks, few in Congress understood that the 2008 meltdown was caused by the Federal Reserve and Congress, not by unregulated capitalism. Not surprising to anyone familiar with economic history, the story of the 2008 meltdown starts with the bursting of the Fed-created tech bubble.
Following the collapse of the tech bubble, the Fed began aggressively pumping money into the economy. This money flooded into the housing market, creating the housing bubble. The Bush Administration and the Republican Congress also added fuel to the housing bubble. These so-called “free-market†conservatives expanded federal housing programs in hopes of creating an “ownership society.â€
If Congress understood the Austrian theory of the business cycle, it would have allowed the recession that followed the housing bubble’s inevitable collapse to run its course. Recessions are the economy’s way of eliminating the distortions caused by the Federal Reserve. Attempts by Congress and the Fed to end a recession via inflation and government spending will only lead to future, and more severe, economic downturns.
The corporate bailouts, government spending, and money creation via quantitative easing that Congress and the Fed have engaged in since the fall of 2008, have failed to produce even the illusion of prosperity. The daily experience of most Americans shows that the government’s doctored statistics drastically understate both unemployment and inflation.
This is not to say that no Americans have benefited from Federal Reserve policies. Even Donald Trump has called quantitative easing “a great deal for guys like me.†Much of the growth of government over the past seven years, from the bailouts to the increases in military and domestic spending to Obamacare, has also benefited politically-connected crony capitalists.
The Federal Reserve’s continued delay of an interest rate increase suggests that, contrary to its public statements, the Fed understands that the economy has not recovered from the meltdown and is on the brink of another major recession. Fear that the Fed is not being fully forthcoming with its view of the economy is one reason the stock market declined following the Fed’s recent decision to once again postpone increasing interest rates.
Learning the full truth about how the Fed evaluates the economy and its plans to respond to another downturn are two reasons why it is important to pass the Audit the Fed bill.
A vote on Audit the Fed would probably be the only good thing to occur in Congress this year. A Congress that cannot defund Planned Parenthood is unlikely to make any serious cuts in spending. Instead of waiting for politicians to do the right thing, those who know the truth must spread the ideas of liberty as far and wide as possible. Only when the teachings of the Austrian school are embraced by a critical mass of Americans will Congress cut warfare spending, cut welfare spending, and audit, and then end, the Fed.
It is always admirable when former GOP Congressman, Ron Paul, authors an economic column like this one and is honest enough to include admonishment and credit for the GOP led “worst recession in US history” with this:
“The Bush Administration and the Republican Congress also added fuel to the housing bubble. These so-called “free-market†conservatives expanded federal housing programs in hopes of creating an “ownership society.â€
ALL OF US were all there when during the last of the eight years of the GOP Bush/Cheney White House destroyed the US economy. NEGATIVE gross domestic product (contraction of the economy!! – not slow growth – CONTRACTION OF THE ECONOMY!!), destruction of American families 401K accounts nationwide when the DOW dropped BELOW 8000!!!, violation of American’s home values by destroying the equity in people’s homes.
This is worth repeating: In the last years of the last GOP Bush/Cheney White House – we didn’t have slow growth of the economy — THE ECONOMY WAS CONTRACTING!!
The answers to the problems we are solving today, will NOT come from those who created the problem to begin with. (Sorry BalloonPilot, Commonsense and Crash…you guys are on that losers bench for a reason, Sirs.)
Yes Bob, honesty is the best policy, but some people would rather tell a lie than the truth:
https://youtu.be/8BfNqhV5hg4
I know what you are going to say: “what difference does it make at this point in time?”
Where have I heard that before?
It is the plethora of evidence like this video:
https://youtu.be/qNyUz08mtBg
and all the others out there that have made necessary the democrat’s plan to have Joe Biden announce his candidacy for president in the event the media can not keep all of Hillary’s scandals tamped down enough to be certain the whole thing does not explode in her face.
What a charmed life she and her husband has led. No republican politician, past, present , or future, has ever, or will ever, receive the level of collusion the main stream media has bestowed on these two criminals.
I have NO idea why Pressanykey is on an anti-Hillary rant.
Well maybe one idea….PAK is so knocked off his game by damning, disastrous economic performance by his last GOP White House….and since he will never acknowledge he voted for – and still advocates those fools….he must pull up 20 year old videos – entirely off subject – of the Clintons to still carp about.
Yet you erroneously still blame Bush and Cheney. Today’s economy is far, far more terrible under owebama than it was under them and that is an indisputable fact.
Oh man. What a lie you’ve been told on both counts, and bad for you, you’ve accepted it as true. No worries. I know you believe it….and the facts don’t matter. This is not even a debatable subject.
The “losers bench”, Don, is the entire country. Problem is, dem voters not only do not understand why (ever heard of Barney Frank’s affordable housing for all) they don’t even understand they are on the “losers’ bench also.
Ron Paul has one redeeming quality. He understands the Fed better than anyone in public life. If I were president I would fire Janet Yellen and appoint Ron Paul head of the Fed. He makes a good and necessary point when he calls for an audit of the Fed. Won’t happen though. Dems in congress won’t allow it.
CS, you make some good points. (The Barney Frank this is wildly overdone and is really about him being gay.)
But….I agree with you….I like Ron Paul too…and the idea of him directing Fed policy.
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