Please Answer: Why don't citizens care...

riotgrl wrote:

if the government has no hand in the system then would that leave it all to private industry? Private banks for instance? With no regulations imposed on the system by the government? I guess I am assuming that many people to whom I have spoken that want to get rid of the Fed or any central banking system want it to be purely privately run[...]

If you are talking about the role of the "central bank" (ie. US Federal Reserve Bank) in monetary policy ...

US Constitution: Article I Section 8 wrote:

The Congress shall have power [...] To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;

The CONGRESS shall have the power.

You have to be a "loose construction-ist" and support "implied powers" (as opposed to being an adherent of "strict construction" and "enumeration of powers") to buy the notion that Congress can delegate its explicitly enumerated power to regulate the value of money on to a seperate, INDEPENDENT, authority (ie. The Fed) of which Congress then has NO CONTROL over.

The 10th Amendment says

The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.

So either you believe the drafters of the constitution literally meant what they said, and spend much time, energy, and debate formulating ... and which they added an entire Amendment seemingly to enforce ... or you believe, like the loose-constructionists that the Founders (after having watched their rights under British rule gradually erode down the slope of "interpretation" and abuse) for some odd reason left "loop holes" in the one thing which they specifically crafted to guard their liberties (against encroachment from the government they were in the process of forming) and thought that the government they were making should be allowed to decide itself what it ought and ought not be able to do.

Just think about it for a minute.
It shouldn't be hard to deduce that the Founders intentions were fairly straightforward and clear.
It should also be fairly clear that ONLY A POLITICIAN would want to argue that this is not the case -- "wait wait, you mean because the constitution doesn't say we can do this, it means we can't do it? Oh no no no! I think it just means that we have the IMPLIED power to do it."
:( :roll: :roll: :nono: :fp: :fp: :nono: :roll: :roll: :(

Does the Constitution give the Federal Government the IMPLIED power to violate the Constitution?

What are the IMPLIED limits on IMPLIED power?

Why enumerate ANY powers if you believe in implied power?

Does "The powers not delegated to the United States by the Constitution" not contradict the notion of "implied powers"? Doesn't it EXPLICITLY state that any such powers "are reserved to the states respectively, or to the people"?

Just read this sub-section, Judicial Interpretation of the 10th Amendment of the Wikipedia page for 10th Amendment to see just how far your powers of "logic" have to devolve to accept the seemingly currently-accepted notion of "implied powers". (read the first section regarding Madison and the ratification of it as well) Even up to the 1940's the Supreme Court accepted as a TRUISIM ("so obvious or self-evident as to be hardly worth mentioning, except as a reminder or as a rhetorical or literary device") that powers must be EXPLICITLY ENUMERATED.

"The amendment states but a truism that all is retained which has not been surrendered."
United States v. Darby, 312 U.S. 100, 124 (1941)

DriftingByTheStorm wrote:

riotgrl wrote:

if the government has no hand in the system then would that leave it all to private industry? Private banks for instance? With no regulations imposed on the system by the government? I guess I am assuming that many people to whom I have spoken that want to get rid of the Fed or any central banking system want it to be purely privately run[...]

If you are talking about the role of the "central bank" (ie. US Federal Reserve Bank) in monetary policy ...

US Constitution: Article I Section 8 wrote:

The Congress shall have power [...] To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;

The CONGRESS shall have the power.

You have to be a "loose construction-ist" and support "implied powers" (as opposed to being an adherent of "strict construction" and "enumeration of powers") to buy the notion that Congress can delegate its explicitly enumerated power to regulate the value of money on to a seperate, INDEPENDENT, authority (ie. The Fed) of which Congress then has NO CONTROL over.

The 10th Amendment says

The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.

So either you believe the drafters of the constitution literally meant what they said, and spend much time, energy, and debate formulating ... and which they added an entire Amendment seemingly to enforce ... or you believe, like the loose-constructionists that the Founders (after having watched their rights under British rule gradually erode down the slope of "interpretation" and abuse) for some odd reason left "loop holes" in the one thing which they specifically crafted to guard their liberties (against encroachment from the government they were in the process of forming) and thought that the government they were making should be allowed to decide itself what it ought and ought not be able to do.

Just think about it for a minute.
It shouldn't be hard to deduce that the Founders intentions were fairly straightforward and clear.
It should also be fairly clear that ONLY A POLITICIAN would want to argue that this is not the case -- "wait wait, you mean because the constitution doesn't say we can do this, it means we can't do it? Oh no no no! I think it just means that we have the IMPLIED power to do it."
:( :roll: :roll: :nono: :fp: :fp: :nono: :roll: :roll: :(

Does the Constitution give the Federal Government the IMPLIED power to violate the Constitution?

What are the IMPLIED limits on IMPLIED power?

Why enumerate ANY powers if you believe in implied power?

Does "The powers not delegated to the United States by the Constitution" not contradict the notion of "implied powers"? Doesn't it EXPLICITLY state that any such powers "are reserved to the states respectively, or to the people"?

Just read this sub-section, Judicial Interpretation of the 10th Amendment of the Wikipedia page for 10th Amendment to see just how far your powers of "logic" have to devolve to accept the seemingly currently-accepted notion of "implied powers". (read the first section regarding Madison and the ratification of it as well) Even up to the 1940's the Supreme Court accepted as a TRUISIM ("so obvious or self-evident as to be hardly worth mentioning, except as a reminder or as a rhetorical or literary device") that powers must be EXPLICITLY ENUMERATED.

"The amendment states but a truism that all is retained which has not been surrendered."
United States v. Darby, 312 U.S. 100, 124 (1941)

While I agree with your statement about ONLY Congress having the ability to coin money, regulate money, etc. I disagree with your statement about the intentions of the founding fathers. Since you did not specifically name a founding father that you had in mind with your statement, I will only address two of them. First, Alexander Hamilton was a loose constructionist as evidenced by his creation of the First Bank of the US (and his own writings which verify this belief) which was designed to help achieve Hamilton's vision of the US as an industrial power so business could more easily get loans to expand business. On the opposite side is Thomas Jefferson who is widely acknowledged as being a strict constructionist. Jefferson very much opposed the creation of a central bank in part because he saw the US as continuing to evolve as an agrarian society and there would be little need for business loans and the like. However, the founding fathers beliefs evolved over time and even the most vociferous champion of strict constructionism and states rights invoked implied powers as he saw fit. Jefferson used implied powers to justify his purchase of the Louisiana territory and took quite a few hits from other founding fathers (namely Hamilton) for his changing views. While debating the relative merits, of implied versus enumerated powers would be an interesting argument, I don't think the founding fathers would all agree with your statement, if we look at both their words AND their actions.

riotgrl wrote:

You said "with no regulations imposed on the system by the government"... I'd respond - what exactly are the regulations (or better put the checks and balances or constraints) to limit "the Fed's" power? Are there any whatsoever?

I think most who are for the removal of the Fed want to return to a Gold Standard. This provides a check in the form of the gold's value. I see a lot of positives with this.

For me, personally, I do think Free Banking is another possibility. I understand why this would concern someone though, but I think one can make a real argument that the market is more of a constraint then the current constraints against the Fed.

At the end of the day, however, I think most people really want the Fed if it exists to have "regulations" or "checks and balances" regarding what it does. All other aspects of our government does. That seems to be a reasonable compromise. In my opinion, this problem isn't as simple as free-market vs. government. The Fed is a psuedo-government organization with very limited checks against it. Anyone arguing that the Fed provides regulatory safety should ask themselves... who oversees the Fed?

I agree with you that there is no check on the Fed and there should be. Actually, most govt. agencies seem to be able to run as they see fit with no oversight at all which I think is a huge problem but I digress and I've already hijacked your thread. So to address your original question....I don't care about monetary policy becuase it is too complicated. I have a pretty strong understanding of economics and monetary policy and the scope often exceeds my grasp so at the end of the day it takes alot of my brain power to wrap my head around what should be ideas that we can all easily understand. Going back to a gold standard would be my first choice as I think it would simplify matters...to an extent.

You hit on some good points all over this post.
I would chime in on the following points:

1. Gold Standard
IMHO, this is untenable in a modern economy.
Gold is cumbersome. Period.
If, recognizing that, you resort to gold certificates (ie. gold backed paper currency) you are already dangerously close to being right back at square one. The original gold warehousing agents practically invented fractional-reserve lending, and practiced it with deceitful intent. There is no reason to assume that the government would not do so from the beginning (as i'm sure they probably did, if not to some limited extent). Using physical gold would be essentially impossible in a modern computerized economy. Inter-bank clearing alone would become so costly it would be prohibitive. You are also right back to one of the original problems with the gold standard, which was that of in-flows and out-flows of bullion from national economies being highly restrictive. The point of going off the gold standard was to remove (what was perceived as, and probably are best thought of as) artificial constraints to the economy. The absolute danger of going off the gold standard, ironically, was the removal of any and all constraints on the growth of the Money Base.

2. Free Banking
I believe, as you say, provides no assurance to savers of the safety of their funds. You can argue that this is okay, and would force better self regulation, say, in the form of the ratings institutions, but we know from recent history that ratings institutions (which in this scenario would be KEY for the average person to assess which institutions, and which scripts, were the most sound) are horribly susceptible to all sorts of pressures and are pretty much worthless, particularly in times of stress\distress.

I think Milton Friedman probably came up with the best "ultimate" solution in the form of his combined or two-level currency economy, although, since it has never been practiced, it is hard to say what the ultimate ramifications would be for the top-level (read: national) currency. It is also hard to formulate a "way out" of the current ABHORENT MESS

Essentially Friedman's favorite solution was, CAP "HIGH-POWERED" MONEY ... in other words, kill the fed. Remove ALL human intervention from the inflation of the national money supply. This would provide a stable base for savers and the general public. Allow "Free Banking" as well, so that competing currencies could float in the market and compete for users.

This necessitates two things that unfortunately will probably never happen ... only one of which Friedman even bothered to mention ...
a. (mentioned) a period of adjustment and acute pain for the markets, wherein they resolve to the notion of a stagnant high-powered which implied DEFLATIONARY economics and a necessary restructuring of ALL investment classes & markets to the notion that prices will go DOWN and not UP (as denominated in High Powered money).

b. There are HUGE political reasons why I think it would never happen. Namely that inflation is THE name of the game for our\most governments. The Money Masters would (imho) NEVER give up this game. EVER.

The only other solution (although Friedman offered a couple of lesser solutions in the paper i'm referencing, which i will try to dig up and post a copy of when i get a few more minutes) is The New World Order ... a cashless society ... and a cooperative world structure that relies on need based resource distribution and the restructuring of "work" to non-competitive ends only. People CHOOSE how they want to contribute, and everyone cooperates. Good luck on that one guys. I know they are perpetually trying for it, though.

PS - i believe that Friedman paper is "The Case for Overhauling the Federal Reserve" (Challenge Magazine), though I can't seem to find a free copy to read \ verify online.

inlet13 wrote:

UpSideDown wrote:

Well, here's a short answer.

I just read all three pages of this thread and blacked out.

One guy was talking about taxes, one guy about beer, and the other about Alexander Hamilton. That's about all I got out of this.

It's not really that complicated. But, I get it... when people start talking about the history, eyes certainly glaze over. To be honest, I don't see why the history even matters to form an opinion on the subject. But, anyways, sometimes threads here start one way and go in another direction.

Anyway, the point here is - monetary policy affects prices. Hence, your beer, your wine, your milk, your house, your stocks... even the price received when you save or price paid when you obtain a loan. Prices affect everything. This is pretty much why it matters in a nutshell.

An aside - I would love to hear Mr. Vedder's thoughts on Monetary Policy and the Fed. I mean this guy is pretty engaged in politics, right? So, let's hear his thoughts on Bernanke.

that is a great point. I do a fair amount of it myself for some reason...i try to be as pragmatic as possible, but it is almost impossible to have a discussion on a topic without the history being brought up.
In government there seem to be two constants, ideas and what ifs. The what ifs always seem to win out over the ideas and gov't doesn't do a lot of things based on the fear of the what ifs...I think governance over the Fed falls prey to this line of thinking... worries about the what ifs of politicizing the monetary policy, that political influence and even lobbyist influence could effect how the government would watch the Fed.
Until economics becomes a core program in high school or even younger, it will continue to be a mystery to most...and mysteries are confusing to people. They would rather focus on something they perceive as black and white... It is startling when you look at the amount of federally elected leaders that make very important decisions on this topic and others that have no formally degrees or anything other than a cursory knowledge of how economies work...
A bright spot for me is that Dr. Paul has many 18, 19 year old students chanting end the fed...hopefully that translates into learning about why the fed should end and what reasonable alternatives would be to our current policies.
I am honestly worried about the inflation that arises from record low interest rates for a very long extended period and QEs...I wish I understood the measure more, but it seems that not having food and energy in the equation seems crazy to me...

Thanks, Drifting. I'm not sure I understand all of that but the general sense I get is- dare I use the term?- clusterfuck.