The Federal Reserve decided to publish a propaganda piece that attempts to dispel the idea that the United States central bank is really a political institution. Much like what many of the primary media outlets are doing as of late, this is propaganda that would make Joseph Goebbels proud.
Here is the clip embedded below:
After Republican nominee Donald Trump accused the Fed and Janet Yellen of being political tools for the Obama administration and Hillary Clinton, the central bank went on the defensive and told the media that it isn’t. It claims to be apolitical and is independent from the government. This is nonsense (SEE: Donald Trump is right – Federal Reserve is a political tool to help the White House).
Here is what we wrote:
“During the 1960s, for example, President John F. Kennedy demanded greater money creation. What did Fed Chair William Martin do? He expanded the money supply by nearly three percent. Kennedy’s successor, Lyndon Johnson, wanted even faster money creation to pay for the Vietnam War. Martin agreed and grew the money supply by five percent.
“This trend continued during the Nixon administration when Fed Chair Arthur Burns raised the money supply by 10 percent. When President Gerald Ford wanted money growth to slow down, Burns complied and lowered it to 4.7 percent.
“In the 1990s, Fed Chair Alan Greenspan kept the money supply open to help President Bill Clinton avoid impeachment. We can’t neglect to mention Ben Bernanke’s involvement in the Bush and Obama administrations! We all personally witnessed that story.”
Robert Wenzel of Economic Policy Journal also writes:
“Kevin Phillips, a political and economic commentator for more than three decades and onetime Nixon strategist, reports that President Richard Nixon asked his Federal Reserve chairman, Arthur Burns, to concoct a new inflation number that would be split off from traditional headline CPI, dubbed “core” inflation—and thus make inflation look less threatening.”
The U.S. central bank has never been independent. It has been there to benefit the executive branch, whether it’s Republican or Democrat, the banking industry and the financial markets. Meanwhile, everyone else suffers from the Fed-manipulated booms and bust and induced inflation.
As Thomas Di Lorenzo of the Mises Institute notes, the American people tend to believe that whomever helms the Fed “operates like the Wizard of Oz, hiding behind dark curtains, pulling levers and pushing buttons to make the economy operate smoothly. So-called ‘scientific socialism’ may have been the most absurd and destructive idea of the twentieth century, but it is nevertheless the guiding ideology of central banking.”
Despite Trump’s numerous failings, he has been correct in his assertion that the Fed is a political institution. The Fed maintains an incredible impact on the economy and the financial markets. This is something that Hillary Clinton has even indirectly confirmed by noting that presidents and presidential candidates should refrain from commenting Fed policy because it could disrupt financial markets and hurt the economy (SEE: Hillary Clinton slams Donald Trump for commenting on Federal Reserve).
The Fed hasn’t been a major topic in the 2016 election, even though it should be. CNN’s attempt at limiting any debate is a fail.
Fed independence is just a myth.
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