[Congressional Record Volume 157, Number 9 (Monday, January 24, 2011)]
[House]
[Pages H418-H419]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE RUNAWAY FEDERAL RESERVE
The SPEAKER pro tempore. Under a previous order of the House, the
gentleman from Texas (Mr. Paul) is recognized for 5 minutes.
Mr. PAUL. Mr. Speaker, in the last several weeks, there have been
several articles published by officials from the Federal Reserve
system. This is a little bit unusual because they are critical of
anybody who criticizes them and are critical of me in particular. In
these articles, they are trying to discredit anybody who disagrees with
their policies, and they are very defensive of this.
They have argued the case that they should have total secrecy. In
this total secrecy, I claim they have tremendous power to do the things
that they want to do, and it has only been recently that the American
people and this Congress have awakened to this. Although we did not get
a full audit of the Fed last year, we did get a partial audit of the
emergency funding, but still the Fed's argument is they have to have
total independency while the American people believe there should be
transparency.
The Fed's argument is that they literally are the saviors of the
economy, that they came in as an emergency when the markets were
crashing, and that they were able to rescue the entire world economy by
their injection of hundreds of billions, if not trillions, of dollars.
The fallacy of all this is that they may have rescued some banks and
that they may have rescued some big businesses, but they didn't rescue
the American people. The consequence of all this has been high
unemployment, people losing their houses, and people who can't pay
their mortgages.
So, in their claim that they prevented a deep depression, they
prevented a depression for some very wealthy, well-connected people on
Wall Street, who were making a lot of money anyway in the bubble period
of time. Now the people who are suffering the most are the average
people, who have had to suffer the consequence of the Federal Reserve
policies. This is a policy that punishes the innocent people and that
actually rewards the guilty people and the people who were the
beneficiaries.
You know, the very people who are claiming that they have solved all
of our problems are the very ones who created the problems, and they
never
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once predicted the trouble that was coming. There were numerous
economists from around the country, especially the free-market Austrian
economists, who predicted and explained the housing bubble--that it was
coming and that there would be a collapse; but the people at the
Federal Reserve, who now are claiming they solved all our problems,
never once said that we could be in trouble.
When asked, they said, No, there's no housing bubble. Where do you
get all this?
So now we are supposed to believe everything they tell us. They
created it. They didn't tell us there was trouble coming, and now
they've solved all of the problems, and we are not supposed to question
this. If we do, then we're going to be on the receiving end of severe
criticism.
The conclusion of many of these articles has been that they want to
deflect the concentration on the Federal Reserve. They will say that,
yes, there still are problems, but they're all on the Congress, that it
has nothing to do with them. They save us from ourselves, and they take
care of us. They create good times and take care of us when we are in
bad times.
The whole thing is they claim that our deficits are a problem--and I
agree with them on that. The deficits are a problem. But, if you think
about it, why do the deficits get run up? We as Members of Congress--
this whole Congress for decades on decades--have run up deficits to pay
for welfare programs and warfare. Endless spending. We tax the people
until we can't tax anymore. We borrow, and there is a limit on
borrowing or your interest will rates go up.
Guess who monetizes the debt and enables the Congress to continue
this spending. It's the Federal Reserve. They are the ones who
literally facilitate the deficit financing.
So, for them to turn around and say it's all the blame of the
Congress, they are absolutely being disingenuous. It is the Federal
Reserve and a monetary system that encourages runaway deficits, runaway
spending, runaway militarism, and runaway welfarism.
{time} 1930
The Fed, over the years, has had two mandates: to have price
stability and full employment. Well, think about the price stability.
Did they have price stability with the NASDAQ stocks back in the year
2000 that collapsed when that bubble developed? Have they had steady
prices, price stability with medical care costs or housing costs or
education costs? No, absolutely none. Today, bond prices are sky high.
We have a bond bubble going on right now, and it's the result of
Federal Reserve policy, but they don't want you to think and talk about
that.
And the full employment mandate, I mean, just think of it; the
government, our government, Labor and Statistics admits there is 9.5
percent unemployment. And then they say, well, if you count more people
who are partially unemployed, it's 17 percent. But if you have a free
market approach and count everybody who's unemployed, our unemployment
rate is 23 percent. That's why the American people are feeling lousy
about what's going on, even though Wall Street once again is making
money. The banks are making money, they're repaying their bills, but
it's all because of a collusion between the Federal Reserve System, the
banks, and the large corporations while the people are still
unemployed.
Congress has a proper responsibility, and it is oversight. It was
never meant for the Federal Reserve to have free rein and not have any
oversight whatsoever. And we have to realize this whole issue of
central banking is not a new issue; it was here from the very
beginning. Hamilton and Jefferson argued about it; Jefferson and
Jackson and many others were absolutely opposed to central banking. So
it's not a new issue, but there is no authority in the Constitution
that grants this right to have a central bank and to create money out
of thin air just to accommodate the politicians.
We have a right and an obligation and a responsibility for oversight
of the Federal Reserve, and our responsibility is to look at bad
policy. The Federal Reserve is responsible for the inflation in the
business cycle, the unemployment. It is up to us to do something about
it and look into it, first to look into it and understand it because
then it will be realized that we need to have more oversight.
Right now there is tremendous support; in the last Congress we had
320 Members of this House who supported an audit of the Fed. So we're
making progress here. It annoys the Federal Reserve. For the first time
in their history, they've hired a PR agency and lobbyists to lobby for
their position. So they know they are under the gun as far as people
are waking up and realizing that the Federal Reserve has been
responsible for so much havoc that we've had in this country. I think
it is our responsibility to continue to look at the Fed and find out
how they have caused so much trouble.
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