This review originally ran on an old blog of mine back in the summer of 2011. Given that we are in the thick of the political season and very little is being said by anyone about the financial mess our country is still in (circuses rarely reveal anything of substance, do they?), I thought I’d re-run it.
End the Fed by Ron Paul, originally published in 2009.
I recently finished reading Ron Paul’s End the Fed, which details the legal and political reasons why the congressman think we should end the Federal Reserve system.
It was an interesting and informative little book. Paul confirmed what most astute observers have long known: that the economy we Americans frequently describe as a “free market economy” is anything but and hasn’t been for quite some time. The unfunny joke of course, is that those most likely to benefit from this current “free market” system know full well that it isn’t.
We have a system in place where interest rates are manipulated, money is inflated, and encouragement of consumer debt is supposedly the path to prosperity.
Paul spends lots of time explaining why Austrian economics is superior to the Keynesian model. I am still in the elementary stages of my study of economics and monetary policy, but the bit I do understand makes it difficult for me to see how writing checks from a bank account that is already in the red can produce prosperity.
Paul looks at the case for dismantling the Federal Reserve System from four vantage points. He makes a philosophical case or ending the Fed, followed by a Constitutional case, economic case, and libertarian case.
This quote from his chapter on the philosophical case resonated because this is ultimately a problem not just of the politicians and of the Fed, but of the people:
The moral argument against the Fed should be simple, and it would be in a moral society. (p.149)
Congress though, is a reflection of the people. If the problem were seen as a moral problem and people were to demand morality in money from their representatives in government, the process would end. But the people endorse the system because they have requested and expect government to provide benefits that can’t be provided any other way. (p.150)
When times are good and the benefits are being enjoyed, no one is much interested in breaking up the party or worrying about morality in money. The Fed encourages irresponsible accumulation of personal debt. People live beyond their means with the help of an expansionist monetary policy. They trade their futures for the present, neglecting the need to save in order to spend more and more. In this sense the Fed is the ultimate promoter of consumerism and living for the present. This amounts to a terrible cultural distortion in which short-term thinking wins out over long-term planing. (p. 151)
There were sections of the book that I found cumbersome, such as the word for word exchanges when Paul goes head to head with various Fed chairmen down through the years. It was one of the few times that I saw Paul as a typical politician; using 100 words to ask a question that could be asked in 10.
Even then however, Paul’s argument for the ending of the Fed becomes stronger.
For the Ron Paul fan, and I am one, this is a good book for enjoying a detailed and in-depth look at Paul’s stance on economic policy and how he arrived as his conclusions. He outlines the economists who influenced him as well as the history of his quest to understand the principles of sound money.
I give it a B-.