As president, Ron Paul would select Jim Grant as chairman of the Federal Reserve. A president Newt Gingrich would appoint Grant to a gold standard commission. “Unfortunately, I haven’t heard from Mr. Romney yet,” joked Grant when MarketWatch’s Brett Arends called on him in his offices down on Wall Street. “I’m sitting by the phone, I’m ready.”
Arend’s discussion with Grant produces many great points from Wall Street’s foremost wordsmith, including
“The anachronism is today’s system,” he says. We have a “command and control, top down” system whereby the Federal Reserve imposes an interest rate on society. The Fed, in other words, tells us what the price of money should be. It is, Grant says, oddly at odds with the modern age. “We live in a world of collaborative social networks” of the Internet and Facebook, of Wikipedia instead of the old World Book, and so on. And yet when it comes to the price of money, we wait for a committee that sits in private to tell us what it should be.
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Why would Paul look to appoint someone? I thought his goal was to get rid of it? Am I missing something?
he would wind it down over time, but it would not happen overnight.
Jim Grant is anti-Fed. He’s as close as we’re going to get to having an Austrian Economist among the Keynesians on the Hill.
The president doesn’t have the constitutional authority to simply end the federal reserve. Congress has to. Congress also has to approve the Fed Chairman that the president selects.
He would try to get rid of it, but that requires legislative action or preventing the renewal of the Fed’s charter. In the meantime he’d still be obligated to appoint a chairman, so why not appoint someone who has no interest whatsoever in fixing the price of money?
If this scenario should threaten to become reality then Ron Paul would be removed or neutralized through impeachment or some other means, in the tradition of Nixon and Bill Clinton.
If the Fed was ever abolished or wound down then there is probably no end to the disgraceful and criminal revelations that would be brought to light as its books and archives are opened up. What Has the Government Done To Our Money, indeed. There is no way in h_ll that the people who control Wall Street, Congress, the executive branch and the Pentagon will tolerate this kind of exposure.
No, more likely the tradition of JFK.
If Ron Paul was assassinated, you’d have a civil war most likely. Even his critics would be forced to shut up and accept that he posed a severe threat to the power elite warranting his removal.
It’s more likely they’ll stage it to either look like an accident or an isolated incident by some “frenzied” supporter, like a second John Hinckley or something.
You give people too much credit IMO.
In all siriusness, a committee or think tank of Austrian economists should meet to work out a ” transition” plan for the economy. How to get us form a fiat to a gold system the less chaotic way. The transition will not be easy as it implies the greatest and just transfer of wealth in human history.
Doesn’t the idea of a “plan for the economy” kind of run counter to the principles of Liberty, spontenous order, and voluntary interaction that set the Austrians apart from other schools of thought?
Joel,–
I don’t think Olmedo actually had in mind the sort of all-embracing economic plan you’re reading into what he’s written (but I’d certainly agree it was a singularly unfortunate choice of words).
I’m inclined to interpret that sentence merely to mean there’d have to be some serious planning involved in the transition and with that, I fully agree. As a matter of fact (and I’m suggesting you think about it a bit) the necessary changes are quite beyond the power of Congress or the President to accomplish, either separately or in concert. The “fatal flaw” in our economic foundation is quite securely embedded in the Constitution and would require a fundamental change unparalleled in history, either of this country or of the world. (And would provoke, quite likely, the greatest internal dissension so far ever experienced).
Chapter Six of The Case for Gold has some recomendations for how the transition could be done, if you’re interested. http://mises.org/books/caseforgold.pdf
Jim Grant Says The Federal Reserve Is “At Odds With The Modern Age.”
“At odds with the modern age” in the sense that humanity is always a part of the bigger picture which can be described as an “ever-advancing civilization.” This civilization is all-encompassing and so it has to do with the transformation of individuals and societies. Virtues are also becoming more refined. Theft and deceit are unbecoming and barbaric. The science of ethics and the science of economics pronounce the Federal Reserve as both criminal and disillusioned, respectively.
Let’s hope that Jim Grant is appointed to phase out the counterfeiting operation known by another name – the Federal Reserve.
Bruce:
I’m 75, have been a Misesian for 40 years, and been disabused over the years of most of any naivete with which I may have come equipped from the factory.
But I don’t (as Mises never did) put the Fed and adherents down to simply being counterfeiters, though what they do actually plays more havoc than any ordinary, merely criminal countefeiters.
By and large, they’re people believing that the role they play is positive, for the good of everyone (and even that the specific advantage conferred on them, their organization, associates and patrons, etc) are all in the larger, or public interest. Not much different, when you come down to it, than proponents of compulsory public education or even the bewildering array of legislation restricting economic activity of almost every sort. I am quite convinced that, if these folks simply understood differently, they’d act differently, a fair number even at some diminishment of their presently advantageous positions. It’s not crooks we’re fighting–it’s ignorance.
Most people aren’t crooks. They’re just corruptible and the most common, pervasive form of corruption is simply the idea of “going along to get along.” Mises succumbed to it once (in Austria) and apparently, never again. But it’s also obvious that anyone, Mises or anyone else, who not only resolves but actually resists such lure, will often earn a reputation as antisocial, recalcitrant, intransigent, etc.; it’s not everyone’s “cup of tea.”
“The science of ethics and the science of economics pronounce the Federal Reserve as both criminal and disillusioned” which is compatible with what you wrote.
Gene, disillusioned can be regarded as economically ignorant and ethically immature. Yet counterfeiting is criminal and there is only a very thin veil between recognizing what the act of counterfeiting is and not recognizing what it is. Likewise only a tiny bit of ethical or economic education removes that veil. We have to assume that the threshold of education required to recognize what constitutes conterfeiting, ethically and economically, has been attained. Especially now that it is being shouted from the rooftops! In other words there are mostly criminal motivations at play.
ron paul doesnt have to end the fed.if legal tender laws are abolished,it will fall down on its own.
appointing Jim as fed chairman would be wonderful.he doesnt have to do ANYTHING.that is the beauty of it.no oracular pronouncements,no nudging,no nothing.just take home a little salary for ,er printing dollars and making coins. even that should be outsourced to someone.a salary of 39k like president ron paul will do just fine.
People can use bubble gum for money if they choose. The only requirement is to keep books and pay taxes in US money.
So who in their right mind would accept bubblegum then?
Bill:
You’re right–they can choose to accept anything they’d like. But, in addition to paying taxes (and keeping books) in US money, they’d also be required to accept US currency in payment of any transaction not completed at point of sale and for which they remained as creditor (“legal tender for all debts public and private”). Prior to 1933 and now, again, the law permits displacing the “legal tender” requirement via a “gold clause” actually included in the contract
Can a gold clause negate the requirement to accept Fed dollars for debts?
If I trade bubble gum for a sandwich, the tax regime applies a sales tax to the value of the sandwich AND the bubble-gum, creating a double tax.
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