what an idiot. he has no clue what he's talking about.

^feel free to post specifics.

^ please do, in fact!

because i dislike economics almost as much as cutesy shit. so, i'd really like to hear from someone who knows exactly why they think the Federal Reserve is a good idea.

The Federal Reserve answers to nobody. The Federal Reserve acts independently of the government to prevent manipulation of the economy for political reasons. If the Fed answered to anyone in the political arena or played the partisan game, imagine how unstable our economy would be, and how little faith everyone would have in it. The Fed, (especially its independence) is a great idea, and anyone who supports dissolving it is simply incredibly misinformed.

I'd go into more detail and find some links to paste, but I'm out of time. Trust me, it's out there. Catch me later when I have time and I'll find some info to send.

To add: sure, politicians have means to influence the economy with things like raising and lowering taxes, but their power is ultimately limited, and should be.

Qruel misquote Kucinich who only said that questions must be raised about the fed. Calling him name on that seem premature since you dont even bring any well informed argument to support it. I'm wondering is a kind of "checks and balance" wouldnt be better then a so called "independance"(of who? what? how?)?

He's questioning why the government gave up the ability to control the money supply. Check Brazil for an example: http://ipsnews.net/news.asp?idnews=31560. "While the inflation targeting policy was initially adopted by the previous administration, it has been taken to extremes by President Luiz Inácio Lula da Silva's economic team since he took office in 2003, say his critics." If the Fed's job was instead carried out by people in political office, the U.S. economy would get turned inside out and upside down every political term. And if you want "checks and balances," The Federal Reserve consists of an entire board - not just Ben Bernanke. Despite the fact that the economy is beyond complex (every action has both good & bad consequences, which are incredibly far-reaching), the Fed knows what it's doing. Any politician who tries to challenge the independence of the Federal Reserve loses whatever he was running for. It is believed that this is why Bush Sr. lost to Clinton, because he pressured the Fed for lower interest rates (which is a BIG NO-NO), as you can see in the following link. http://www.youtube.com/watch?v=rX_q2iPvyvY

Hence, the guy in the video above is a nobody - anyone with background in economics knows that he sounds uneducated, possibly even ignorant.

I'm done here.

>> ^J-Rova:
He's questioning why the government gave up the ability to control the money supply. And if you want "checks and balances," The Federal Reserve consists of an entire board - not just Ben Bernanke.

Do you know who controls the Fed? The Fed is not a public institution. It's a cartel of private banks.

Despite the fact that the economy is beyond complex (every action has both good & bad consequences, which are incredibly far-reaching), the Fed knows what it's doing.

Recent events clearly show that the Fed either does NOT know what it's doing, or knows and is acting contrary to the United States' best interest by following a political agenda. The Fed's policy of low interest rates created the current housing bubble, and it's laughable to claim that this was good planning.

Since mid-2007, Bernanke has been hiking rates for people who were solvent, and lowering for the ones who were not. He's made the problems worse by breaking the people who actually could pay their bills, which in turn caused more trouble for the ones who were insolvent to begin with. We have a huge amount of foreclosures and still no one knows what the hell is going on with the big depository institutions.

Just recently Citibank had to borrow billions from Abu Dhabi at a 14% interest rate because they needed long term funds so desperately that borrowing from the Fed wasn't an option. Yesterday (Feb 14th) the Fed received a request of $268 BILLION dollars in TOMO/TAF (read: short-term) loans from depository institutions (source). That's more than 1/3 of the Fed's whole open market reserves, so only $66 billion were given out. Since the beginning of January, the big banks no longer have their own reserves. Their current reserves are composed of cash borrowed from the Fed.

All this shows that there are very big players in trouble out there, but we have no way of knowing who they are. Everything connected to the Fed is secretive, and not even members of Congress with the highest clearance can find out what's going on.

I could go on for hours about the amount of BULLSHIT that Bernanke puts forth, but I won't. The information is out there, so I suggest you use your "background in economics" to find it.

Any politician who tries to challenge the independence of the Federal Reserve loses whatever he was running for. It is believed that this is why Bush Sr. lost to Clinton, because he pressured the Fed for lower interest rates (which is a BIG NO-NO), as you can see in the following link.

This is ridiculous once you consider that Greenspan helped implement GWB's policy of artificially low interest rates and deficit spending which ultimately led to the mess we're in.

Awful vid, not cuz of the message, but the speaker. Upvote for the discussion, however. If you want a coherent take on why the fed should be abolished, look no further.
http://youtube.com/watch?v=ji_G0MqAqq8
And if you wanna see him school Bernanke, theres videos of about 15 different occasions when he does.

The Federal Reserve could have stopped the housing bubble by simply identify that there is a bubble. However the last few years the Federal reserve has been too lax in allowing various unsafe financial gambles to take up and down Wall street, especially in the case of CDOs and CDMs.

Just wait until the big banks start to roll over and go to the federal government to bail them out, it will be titled something big and patriotic like "Homeland Economy Security Act" but in reality is another case of privatize the profits but socialize the costs.

Anyone who advocates for the government to give up its sovereign right to print legal tender to a private institution simply fails to see a glaring fault of logic here. If you support this you make several assumptions.
First you think government in inherently bad at managing the currency. While, undoubtedly, there is great room for abuse if you base your system of government on the notion of "by the people and for the people" than surely one can reach an acceptable level of competency and security of the national currency.
The second assumption made is that the private interests that run the FED have anyones but their own interest in mind. If you truly believe in the philanthropic, benevolent group of bankers than you would be very naive and incredibly gullible.
And finally any subsequent study of history and economic theory beyond the realm of Milton Friedman would reveal the underhanded implementation and proliferation of the Reserve system in the US and the rest of the world and its resulting consequences on the living conditions of the vast majority of the local population.

>> ^J-Rova:
>"The Federal Reserve consists of an entire board - not just Ben Bernanke."

oooh. good thing we have an economist in our midst. were you honestly under the impression, that anyone here thought it was just one guy?

>"Hence, the guy in the video above is a nobody"

no. he's a member of the U.S. House of Representatives. and you are not.

>"anyone with background in economics knows that he sounds uneducated, possibly even ignorant."

most with a background in debate, know better than to make blanket statements like that.
and ad hominem attacks.

all that someone would have to do, in reply, is find 'anyone with a background in economics', who disagrees with you. then you've lost your credibility.

>"The Fed is a great idea, and anyone who supports dissolving it is simply incredibly misinformed."

simply because you tell me so? nothing you've said here, backs up that claim.

i suppose it's just as well, then, that you're "done here".

qruel - i do have to admit, at the same time, that the title isn't really terribly accurate, now is it?
try something like "Kucinich wants to re-examine the Federal Reserve", maybe?

^ I thought the first title was funny. But the comments about the title have been duly noted and thus the title is changed.

>> ^my15minutes:
>> ^J-Rova:
> "The Federal Reserve consists of an entire board - not just Ben Bernanke."
oooh. good thing we have an economist in our midst. were you honestly under the impression, that anyone here thought it was just one guy?

No. That was to clarify for anyone who may have been under that impression, since we have a wide variety of curious liberals on the Sift. It was in response to the "checks and balances" question.

But thank you for your clever mockery and philosophy lesson.

>> ^flavioribeiro:
>> ^J-Rova:
He's questioning why the government gave up the ability to control the money supply. And if you want "checks and balances," The Federal Reserve consists of an entire board - not just Ben Bernanke.
Do you know who controls the Fed? The Fed is not a public institution. It's a cartel of private banks.


We shall consult the omnipotent Wikipedia:
"'The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects."

Cartel? Like drugs? Oil? :-P And of course it's a bunch of banks! They have all the information! Would you rather it be a collection of... say, hospitals, making all the same decisions? I can picture that - "Well, Mr. Bernanke, there were an unusually high number of influenza cases this year, sooo ahh, let's see.... ahh, fuck it - we recommend contracting the money supply to prevent inflation." ???? HAH!

Since mid-2007, Bernanke has been hiking rates for people who were solvent, and lowering for the ones who were not.

Hiking and lowering rates at the same time, for specific people? I'm not sure where you got that.

Just recently Citibank had to borrow billions from Abu Dhabi at a 14% interest rate because they needed long term funds so desperately that borrowing from the Fed wasn't an option. Yesterday (Feb 14th) the Fed received a request of $268 BILLION dollars in TOMO/TAF (read: short-term) loans from depository institutions (source). That's more than 1/3 of the Fed's whole open market reserves, so only $66 billion were given out. Since the beginning of January, the big banks no longer have their own reserves. Their current reserves are composed of cash borrowed from the Fed.

People borrowed money they couldn't afford to borrow, and lenders allowed them to do it. They all miscalculated some of the risks involved, and it finally started biting some people in the ass. This is NOT the Fed's fault! The part about the reserves is one of the mechanisms the Fed has at its disposal to manage the problem.
I'm not denying that there is indeed a problem (housing market bubble, etc). I'm only denying that the Fed is to be held accountable for the problem; however, they have the means to fix it. Hence, the drastic interest rate cuts somewhat recently, etc.

Everything connected to the Fed is secretive, and not even members of Congress with the highest clearance can find out what's going on.
Is this bad?

I must admit, I wasn't prepared for the amount of scrutiny drawn from a rant on the absurdity of the ideas in this video.

>> ^J-Rova:
> Cartel? Like drugs? Oil? :-P And of course it's a bunch of banks! They have all the information! Would you rather it be a collection of... say, hospitals, making all the same decisions? I can picture that - "Well, Mr. Bernanke, there were an unusually high number of influenza cases this year, sooo ahh, let's see.... ahh, fuck it - we recommend contracting the money supply to prevent inflation." ???? HAH!

It's a bunch of private banks. This is akin to having wolves guarding a hen house.

>> Since mid-2007, Bernanke has been hiking rates for people who were solvent, and lowering for the ones who were not.
> Hiking and lowering rates at the same time, for specific people? I'm not sure where you got that.

You don't understand what I'm saying because you're in over your head. Starting in December 2007 the Fed started auctioning huge short-term loans at the 3% rate, available only to the big banks. This brand new loan mechanism is called the TAF: (Temporary) Term Auction Facility. It has allowed institutions like Citibank and Bank of America to stay afloat despite having no reserves of their own. They will carry on renewing these loans indefinitely as long as they can provide the collateral.

It just so happens that for everyone else, interest rates are determined by the market and not by the Fed, and are a function of risk. No one but the big banks get loans at 3%. Last week, municipalities were forced to raise rates from 4% to 20%, and even at this rate they can't get buyers for their bonds. These finance basic services such as hospitals. Now there are about $265 billion in outstanding municipal bonds (i.e., bonds that haven't found buyers). Mortgage rates have skyrocketed, meaning people can't refinance their houses at acceptable rates. Even prime mortgages are at risk now, and the crisis will spread.

The Fed has provided extremely low rate loans only to big banks -- precisely the ones who caused this crisis and shouldn't be artificially kept afloat. Meanwhile, the market has screwed over the parties who were still solvent by giving them huge rates due to the perceived high risks. By not forcing the exposure and liquidation of bad debt tied to banks, the Fed is creating the conditions for a domino effect. If conditions continue to deteriorate, Americans will have a deflationary credit crisis similar to the one seen in the 1930's.

People borrowed money they couldn't afford to borrow, and lenders allowed them to do it. They all miscalculated some of the risks involved, and it finally started biting some people in the ass. This is NOT the Fed's fault!

The Fed is partly responsible by keeping artificially low interest rates, which gave rise to the credit bubble. Today the Fed is accountable for providing liquidity to float junk assets owned by big depositary institutions, temporarily favoring them and creating the conditions for a widespread credit collapse.

>> Everything connected to the Fed is secretive, and not even members of Congress with the highest clearance can find out what's going on.
> Is this bad?

It's bad because it lets bankers manipulate the market. The President's Working Group on Financial Markets (a.k.a. Plunge Protection Team) is the prime example.

I'm all for having educated discussions about the economy. but I sense that you're the kind of person who first makes his mind and then tries to find arguments to back up your claims. Quoting a few paragraphs from Wikipedia doesn't show the Fed's integrity. If you want to find the truth, look at the market. It can be temporarily manipulated, but in the end it never lies.

ok, ^J-Rova.

foremost, i just wanna' say that my initial statements, and query, were 100% sincere, so i really don't know why your following post (the one to which i replied, in kind) so reeked of dismissiveness, while simultaneously laying zero logical basis, for your abrupt conclusion.

other than the basis being, you're more accustomed to this kind of discussion on YouTube, etc., which would be understandable.

in other words? to me, your post looked like, "i trust the Fed, so you should, too. QED."

i'm counting on you, knowing more than me (or what i can scrape together from wiki citations),
about economics.
'cuz, watching money move?
bores me, as much as programming might very well bore you. ok?
please count on me, and 98% of anyone you're likely to address here on the sift, for 2 things.
1) i'm here to enjoy, and learn. not fight. and won't say anything in text, that i wouldn't say to your face.
2) whether liberal or conservative, in either the social or fiscal sense? we're going to know the Fed is more than one guy. srsly.

i know, you answered, "No. That was to clarify...", but look what you said next. closely, ok?
"... who may have been under that impression ..."
right. the impression, that we were discussing, was that... 'anyone here thought it was just one guy.'
which actually means, your reply meant...
"Yes. That was to clarify, for anyone who may have been under that impression."

liberal/conservative, social/fiscal, and their curiosity levels, being irrelevant.

so, let's start over.

i'm owen / m15. i'm a libertarian.
socially, very liberal. (pro-choice, -drugs, etc.)
fiscally, quite conservative. (you're paying, for your drugs, abortions, etc.)

which, in my case, equates to: fiscally, a fuckload more conservative than most any Republican currently holding prominent office. seeing as how, with the exception of Paul and a few other gems, of varying caratweight to be certain, most prominent Republicans aren't fiscally conservative.

they merely think we should feed the extra taxes (and/or massive intl loans) into the top of the machine, rather than the bottom. dig?

so. this is where, we came in.

i'd really like to hear from someone, who knows exactly why they think the Federal Reserve is a good idea.

if you think you can? cool!
if not? equally cool!

I'm not in over my head, flav, but I don't have time to write a book about why it's a GOOD thing that the organization responsible for printing money isn't controlled by politicians such as the one shown in this video. Someone asked for detail, so I gave a little bit more detail. In return, I received a shitstorm of out-of-context knit-picking, mostly about details that were ultimately irrelevant to this argument. (I have yet to see anyone argue with the most important example I gave about Brazil.)

and for the honestly curious (my15minutes):
i'd really like to hear from someone, who knows exactly why they think the Federal Reserve is a good idea.
if you think you can? cool!
if not? equally cool!

Again - I don't have time to write a book on here, nor am I here to teach a class. You can easily go to a library and check out a book on macroeconomics. From there, you can read about the Fed and its responsibilities. Then, if you still wish to abolish the Fed, you must also answer the question of who will pick up said responsibilites. Therefore, to answer your question of why the Federal Reserve is a "good" idea - because it is a better idea than any current alternative.

If you don't care to go elsewhere, and only want to read a bit more right here on the Sift, <a rel="nofollow" href="http://www.videosift.com/video/Ron-Paul-on-the-Federal-Reserve" title="Ron Paul on the Federal Reserve">yaroslavvb seems to have a good grasp of it.


And yes, as you can see, any type of coding isn't my thing. hah

^I always thought the printing of money was the responsibility of the government, as that's what the people who established this country intended. So you'd replace your trust in politicians (representatives of the people) with the trust of bankers? Hmmm, not me. It seems the system as the way it's set up now is a house of cards. I found this article amusing.

Bernanke: There's No Housing Bubble to Go Bust
Fed Nominee Has Said 'Cooling' Won't Hurt
http://www.washingtonpost.com/wp-dyn/content/article/2005/10/26/AR2005102602255.html