Let’s End This Nonsense
The Federal Reserve & National Debt
The Fed Ain’t In It For Us
Minutes from the Federal Reserve Board’s 2008 meetings are now available for review. Most people don’t even care. Laffey does, on today’s Laffey Minute.
Should The Fed Have This Much Power?
Laffey contemplates the real power of the Federal Reserve, and whether or not the concentration of monetary control should ever be placed at such a small table.
How Can The Fed Maintain ANY Credibility?
If we asked a stock picker to pick stocks for our portfolio, and he lost money on 85% of every trade he made, how long would we keep him around?
Yet our friends at the Fed have been wrong for years. But we don’t ever seem to get rid of them. Instead, we promote them and give them even more power and control. Something’s wrong at the Federal Reserve, and Laffey knows what it is.
Why Do We Let The Fed Be So Wrong?
Well, they appointed Janet Yellen as the new head of the Federal Reserve. Lauded as the “insider we need” as the job is “so complicated,” she takes over in February as Ben Bernanke goes on his speaking engagements, lauded as the “Savior” of the U.S. economy.
But what did Bernanke really produce? More people are suffering on welfare, prosperity has left the middle class, GDP growth is the worst of any economic recovery, and the civilian labor force participation rate continues to head to the lowest on record. But he did add $4 trillion to the Fed’s Balance sheet without knowing how to undo this disaster.
Why we let the Fed be so wrong for so long, giving them so much power instead of demanding a sound fiscal policy from our elected officials in Washington, is beyond anyone’s guess. For now the charade goes on. And here comes Janet Yellen with those exacting, difficult decisions that only she could understand… my 10 year old could pick up a phone and give orders to enrich brokers by buying 75 billion dollars of securities each month.
Monopoly Should Just Be For Kids
Laffey stumbles upon his kids playing the classic game of Monopoly and reminds us that banks and the Federal Reserve aren’t playing a kid’s game.
Our Leaders to Americans: “Drop Dead”
With too much debt, no person, company or state can think straight. Bad decisions, under pressure, continue until there is a collapse. Our federal deficit is no different. The Congressional Budget Office recently reported that the federal debt held by the public is 73 percent of our gross domestic product. This is an all-time high except during World War II. Elected officials of both parties have put us on a trajectory of disaster. And, as the debt increases, they seem to act more and more insane.
Take any of our significant problems—the national debt, unfunded entitlement programs, China's growing menace, or the lack of energy independence—and look at the last 13 years. Whether Republicans or Democrats have controlled Congress or the White House, the results have been the same—disastrous.
The national debt goes up, China gets stronger, we still depend upon the Middle East for our oil, and there are no real solutions for the ticking time bomb of our entitlement programs (Social Security, Medicare, Medicaid), which add another $211 trillion on the backs of our children. And neither party has much to say about the terrible problem of an out-of-control Federal Reserve printing money “to infinity and beyond.”
To find out what really matters to our two parties, just check their respective national websites. There are no solutions there. They do emphasize their raison d’etre: The other party is terrible.
Aided by a news cycle that feeds upon the proverbial daily food fight, the media accentuate the attacks on each other while we watch our American exceptionalism start to slip away.
That has been noticed. According to the polls, Republican and Democratic congressmen are about as popular as cockroaches and communism. Neither party has favorability above 40 percent (a number that traditionally would cause the incumbent to call its quits) and the trend for both parties is down.
Recently, members of both parties have been meeting even less with voters. But we must understand what has happened. We The People are not their constituents anymore.
No, their constituents are the political class in Washington, the lobbyists, the national party leaders; their clients are money and the people and corporations with lots of it.
Just take one issue: the growing military menace of Communist China and the future threat it poses to our great republic. Both parties and their leaders thought it was a great idea to let China into the World Trade Organization in 2001. They sold us a bill of goods that we would have more jobs and that China would become a peaceful democracy. But the results are in. America has lost over 2.8 million jobs to China, and we continue to fund the Chinese government's oppression of its own people.
China doesn’t have to lobby America for the 40 percent discount we give them to sell their products to us. They get large U.S. American companies like GE, Walmart, and Caterpillar to do it for them. Then, they get the money to the parties and their candidates in Washington.
Meanwhile, working-class Americans get crushed as they live through the first 10-year period in American history, where their wages have declined. And Communist China takes the extra cash and engages in the biggest military buildup in “peacetime” history.
The news is filled with daily examples of China stealing our trade secrets, launching cyber attacks on us, and uniting with other enemies to hurt our country. But the Republican/Democrat apparatuses ignore this devastation to our American infrastructure and the future risk to our freedom because it effectively gets its money from China.
And it is only getting worse. One egregious recent example is Gov. Chris Christie (R-N.J.) speaking to leaders of his party in Boston. He distanced himself from any belief system, when to the cheering crowd he announced, “We are not a debating society. We are a political operating that wants to win.” The Democrats have already thrown their principles to the win, concentrating on computer micro-targeting and aggregating small segments of voters. The Republicans are joining them.
The Republican and Democratic party leaders and their candidates have now taken us to the edge, where we risk losing the whole republic. A slight change in perception about our rising debt will bring down the whole house of cards and put Americans in a world of hurt.
But then again, fixing America is not something either party is interested in. We will have to do it without them.