T Nation

Audit the Fed


#1

http://www.house.gov/apps/list/press/tx14_paul/audit.shtml

Bill has now 222 co-sponsors, 218 is a majority. It will now get it's day on the floor and we will see who the real patriots in the houose are. If this passes it could send some SERIOUS shockwaves through the country. I am interested to see all the inner dealings of the fed. I bet we get a lot of "missing" files though, even if it does pass.

V


#2

This seems non-exciting: if they were anything criminal that were going to be found out, the bill would not pass, I'm pretty confident. If the bill passes, that already means that in fact money has been handled legally and any vast profits made by bankers were made legally. And it is not as anyone had thought that banking was non-profit, except accidentally by bad loans, which the Federal Reserve banks haven't been involved in.

Well, there are the sorts who think things such as that the depositors ought to be given half the income earned from resulting loans -- never mind that they experienced no risk and did no work and had no overhead, and never mind that no such thing was ever agreed -- but those folk will be screaming "crimes" no matter what.


#3

I am not overly excited by oversight of the Fed. You have to consider who will be overseeing them. To me this is double edged sword. On one hand, it ridiculous that they opperate in a bubble with no oversight. On the other hand who in thier right mind doesn't equate oversight with additional political pressure.

This will be yet another political bandaid that will end up causing more harm than good. We all know RP means well, but I don't believe he has thought about who will gaining political power over the fed. What's the phrase, the inmates running the asylum?

The problem is not that no one is watching them. The problem is that they have the power to fuck things up enough to require watching.


#4

They print money without any oversight.

Audit them.

Just so that people get that you can also get anally raped in a perfectly legal way.

Because banking may be risky.

Printing money really is not, unless you do so privately.

Nobody steals from US citizens without a government permit.


#5

The bill is not going to pass. At least, not in the original form it was written. The Senate has introduced a different version of this bill already because no one in the "power circle" want to lose their grip on the ability to spend.

And this is not a matter of oversight on "criminal" behavior. It is a matter of being able to find out how much the currency is being devalued.

No matter. The Empire is going to come crashing down.


#6

Yea, I think people need to see the numbers in order to understand wht is going on. It's like Orion says, we are getting butt raped, we can feel it, but most people just can't see where it is coming from. At least this will show, our government has decide that this big banking thingy can pretty much do what it wants to the peope for thier own benefit.

We will then begin to see yet again, they are doing it on purpose, as part of a plan, or they are so completely miserable at what they do it's not even funny. Ok take Golf here for a second. ANY pro golfer, and I mean any, when they make a misread on a putt, they miss by a couple feet at the most. And this doesn't happen very often. MOST of the time they misred a putt and they are still within a foot of thier intended trget. These feds, have missed thier targets so often and so completely, it would be like Tiger hitting 10 Ft putt, and missing it so bdly, that he has 20 ft on his next putt, and doing it over and over, I think it would be safe to say, he wouldn't be on tour very long if he started doing that. These feds are such sandbaggers, they are shooting 250 for 18 holes and coming back and telling the clubhouse thay shot 3 over par. No one is watching them, so all we can do is say, holy that round took you 7 hours to play, you must be pretty deliberate. At least now the galleries can go around and watch them chunk shot after shot, watch them thin thier wedges into the pond, watch them whiff, yes whiff, over and over again. I'm not saying this is going to save the world, but it's one step in the right direction, and it may well lead to further steps in the right direction.

V


#7

Audit the Fed is a perfect example of our democratic republic working exactly as it was intended.

Most of the cosigners for this bill were persuaded to do so from pressure from the people in their districts, meaning that these legislatures are following the WILL of the people they represent.

When this bill is voted on, what will be more important to power hungry Congressmen - going against the will of the people they represent and risk losing their next election OR voting for the bill and losing their blank check powers but maintaining their position in Congress?

As of now the support for the bill among non-government individuals is not enough to threaten these incumbents, but as more awareness or political activism develops (be it from an increasingly ailing economy or whatnot), the seesaw will tip in the other direction, and incumbents will be more pressured to follow the will of the people.

So while it may not happen THIS time with THIS bill, it is keen to be aware that the ball is now rolling and people are legitimately (and not just "they all lie") questioning the integrity of the U.S. government and taking true concern in the matter (I suspect this is because a failing economy negatively affects the middle class the most - which also happens to be the largest class)


#8

By time this bill is voted on there will be nothing in it that imbues the congress with any of Ron Paul's original intent. In other words it will be just like the bill that got passed in 1979.

We can see this last week the Congress just started talking about handing the Fed more powers which is just counterproductive in the end. Congress is not capable of operating on any strict principle other than "politics" and that just ends up fucking everyone over in the end.

Government is a totally untenable prospect in every way, shape or form.


#9

The average person thinks that $100 million is more than $10 billion which in turn is more than $1 trillion. This may be thanks to the fine quality of government-run education.

Thus, when at a point in time where Obama had been coming up with a new trillion in additional spending just about every single week he'd been in office for quite some number of weeks in a row, and then announced he'd found $100 million in savings, people ooh'ed and aah'ed.

So exactly what are the numbers from this audit going to mean to most people? Nada. No more than did Obama's trillions.

As for a dream that now Congress truly, as shown by this bill, is out for the will of the people rather than out to make the people think they are getting what they want while in fact doing what more important folks want, I do expect that is quite mistaken. There is no way that any final version of this bill will do anything that the more important folks aren't comfortable with.


#10

Ding, ding!

I am curious though if you think it isn't entirely worth while to try and give Congress the full authority to audit the Fed. At the very least this would give the public an opportunity to see how much their money is really being devalued.

The amount of money in circulation I am sure is much larger than the public expects it to be. I am curious about the rate of increase in the money supply over the last decade as percentage of GNP growth rate.

This measure would give a pretty good indication of how much we have been ripped off by our government.


#11

Sure, the authority to audit the Fed absolutely should exist. No doubt there.


#12

At least someone else got the point that the 100 million thing was just a disgusting PR stunt, ha!

Here's a sort of random question for you Bill, since this thread is otherwise slow. I really, really wish that what you say about the average person thinking 100 million is more then 10 billion, etc., was wrong. Sadly though I have enough experience outside my academic shell to think this is probably true. Sometimes I still have nightmares about the recorded Verizon service call on youtube where several Verizon costumer service employees mistakenly thought that 0.002 dollars was the same thing as 0.002 cents. I cringe to think how many if not most people do not understand that terms like 'million', 'billion', 'mega', 'ton'. etc. are units nor they they understand how to convert between units when possible or otherwise compare quantities.

In any case... beyond blaming horrible government controlled eduction, why do you think this is? For myself, directly working in mathematics, it is hard to conceive of how anyone could not understand these things. Or at least, given the importance of understanding basic things about numbers and units, it is hard to understand why most people do not make the minimal effort to become comfortable with units. What's going wrong here, why are we in such a state of not only numerical illiteracy, but also "unit" illiteracy as well?


#13

I do believe it has to do with the teaching process.

When pursuing a PhD in medicinal chemistry -- which stupidly enough I completed all the educational and research requirements for, as well as passing my qualifiers and having all the work related to my thesis published in peer-reviewed journals and writing half the thesis itself, I never did finish writing it and therefore never got the degree -- naturally I was required to teach the pharmacy students a lab course as well as general TA'ing.

The lab course was pharmaceutical analytical chemistry. Now while the official requirements were that they learn such and such procedures and blah blah blah, from my perspective the vast majority of pharmacists have no need of such things -- and the few who do will get much more specific and in-depth further training and experience -- but what every pharmacist and for that matter physician really, really, really ought to understand is what tests really are testing for, how they may be in error, how factors might cause an error and what direction the error would go in, and this kind of thing.

So that really was my focus.

What hard work this was!!!

The great majority of pharmacy students -- and these were not first year, they were actually in their first year past the bachelor's degree -- really cannot think, I found out. Well just barely in some regards, but the above kind of things were just obviously vastly beyond anything the educational system had ever required of them.

As a mostly-unrelated thing, I was also in an unfortunate situation where I was required to give the students quite high grades. They had a hard time in the lecture course, and the lab course counted as an exam in the lecture course grade, and rather than dumb down his tests the professor preferred to give the students an "easy test" by having the lab grade be high if they put in any half-decent effort. So I was instructed that 90% was pretty much the bottom grade for any student that did put in a reasonable effort.

Well it was quite hard getting their grades up there. First method I employed was a "splitting the difference" system where if they earned for example 80% on a quiz, they'd get a 90. Or if they earned a 90, they'd get a 95, and so forth.

That however was not enough. What did manage to get the job done was adding in questions that were deliberately ones that really and truly should not be missed even by them.

However because of their problems with thinking, and also on account of my not liking putting in questions that were just pointless, generally there really would be a point behind the "giveaway" question.

ANYHOW -- this obviously is turning into one of my long, rambling stories -- one day the lab work was determination of calcium content by EDTA.

Now, one thing about this which of course I made sure they learned and demonstrated understanding of and ability to think using this information, was that the analysis actually does not pick up only calcium but also other things, for example magnesium, and so if one does not know that other species that EDTA binds are not present, one actually doesn't know how much calcium there was, regardless of the name of the test.

But as it happened the big news story of the week was OJ's defense bringing forth the fact that the bloodstains on his socks had EDTA in them, and there was no reasonable explanation for this other than the blood not having been directly from a person, but planted after the fact from some forensic specimen of the person's blood.

So here was the giveaway question for them to think about: Suppose that it is true that the bloodstains found on OJ's socks contain EDTA, and suppose it is true that the only way this could be the case is if the police planted the blood on the socks. If so, would this prove that OJ did not kill Nicole?

I had actually, overoptimistically, expected that this would not be beyond their thinking capacity.

I was wrong. Quite a high percentage decided that this, if so, indeed would prove that OJ did not kill Nicole.

So you see what I am saying about ability to think. They had somehow got through 16 years of education, not counting kindergarten, without ever being required to think to the quite limited degree I was working to get them to do.

By the end of the semester I did make a lot of progress in their ability to reason things out. I have no doubt that if they had run into that sort of effort frequently in the previous 16 years of education then their abilities would be entirely different than what they were. But that clearly was not the case.

Getting back to the basic math, I will cut this story much shorter. My ex-fiancee's kid was doing badly in school and we were trying to get him into a private school that had a tough entrance exam. He really was way too far behind but it was worth giving it a shot until clearly impossible.

Now this was either for the first grade, his having just failed that in government-run education, or trying for the second grade after he had passed the first grade the second time around. Not sure at this time which it was.

I had no problem at all teaching him about numbers the way that ought to be the case. Ask him (then) about 81, for example, and immediately he recognized that as being 9x9. In the same manner as for example a kid could have an animal named to him and he could tell you immediately various things about it.

Now when having numbers in the mind this way, then of course when given a problem such as 81 / 9 = ? there is no work required, it's just obviously 9! Because it's something one knows about 81.

Well, they had an idiotic requirement for cursive writing as well which proved too much of a barrier. My ex-fiancee never did move in with me and did not keep up with me helping him with math or anything else. His loser teachers in the government schools of course did not teach in any effective manner. Soon he lost the ability to do the sort of thing I descibed. Sadly he will finish high school, if he graduates HS at all, as being of barely functional ability with regard to numbers and such things. Judging from where he is in the 5th grade, which is all he is at now after having failed grades three times now.

I fully expect that the teachers totally fail to do the relatively simple things that would have people just naturally, same way as being able to tell you that bald eagles have white heads and they are birds and that sort of thing, know that a billion was more than any number of hundreds of millions (unless more than 10 hundred million) and so forth. And other experiences in life don't do it.

Another way of perhaps explaining this is as follows. Have you ever noticed that if someone gives you directions and all the things named as reference points are unfamiliar, this is mentally difficult, hard to remember, and you don't necessarily manage to follow those directions? Whereas when each step, for example "Turn left at Elm Street" is referring to a thing you know quite well, that you already have a place in your mind for, then directions of perhaps the same general complexity are easy to understand. It is very hard to really grasp something new when it requires reference to things you don't really grasp in the first place.

For people in general, hearing $350 billion is rather like hearing "Turn at Princeton Street" when they have no damn idea where Princeton Street is. Yeah, they've heard it used by other people before but themselves, they have no idea where it is. So when getting such a direction, they have no idea if it is north of the railroad tracks (for example), or south. Similarly they don't actually know if $350 billion is less or more than some number of millions or trillions. At least this is my hypothesis, that despite years of "education" they actually don't have places in their minds, so to speak, for these things.

The fact that kids go through tens of thousands of hours of "education" in which so very, very, very much could be accomplished but so little is is a true tragedy.