STAFF NEWS & ANALYSIS
Rearranging Titanic Deck Chairs: Economist, Candidates, Endorse Cosmetic Central Bank Changes
By Daily Bell Staff - May 23, 2016

The right kind of reform  … America’s next president should modernise the Federal Reserve system … Perhaps it was inevitable in the aftermath of the worst financial crisis in almost a century, but America is boiling over with schemes to remake the Federal Reserve … The Fed is not broken, but it is anachronistic. -Economist

The Economist is on a roll – in the wrong way.

We recently wrote about the magazine’s attempt to separate cyclical downturns from central bank monetary debasement. You can see that analysis HERE.

And now we’ve come across their latest article entitled The Right Kind of Reform.

From The Economist’s point of view, the right kind of Federal Reserve reform is to change the makeup of Fed boards by adding more women and minorities … and forbidding bankers to participate due to “conflicts of interest.”

The Economist is not alone in its enthusiasm for different skin colors and gender. Hillary Clinton and Bernie Sanders have both made similar statements.

Here, from the LA Times:

Clinton aligned herself with some of the party’s top liberals in publicly chastising the nation’s central bank for what they said … was its “disproportionately white and male” leadership.

[She]… followed her rival for the Democratic nomination, Sen. Bernie Sanders (I-Vt.), in saying bankers should not be allowed to serve on the boards of the 12 regional Fed banks.

This is what we call a “portmanteau meme.” One false statement – that central banking is fundamentally viable – is now supported by another: That the system itself will improve if the people making decisions are not white and male.

But businesses don’t suddenly become successful because women take over. Yahoo CEO Marissa Mayer tried to salvage Yahoo and is now presiding over its break-up.

Government doesn’t become supportive of minorities just because minorities become decision-makers. President Barack Obama hasn’t made a dent in the over six million individuals involved in the US penal system.

Having more minorities and women on Fed boards won’t make a difference. Nor will forbidding bankers from serving.

It will still be the same corrupt and ruinous organization. The systematic debasement of money is the problem, not the Fed’s ethnic or gender makeup – or even “conflicts of interest.”

And then there is this from the Economist:

The private sector should be kicked out of the Fed entirely, the reserve banks capitalised with public money and the central bank’s profit kept for taxpayers.

And here’s the article’s conclusion:

Private-sector involvement in the Fed arms the critics and conspiracy theorists. It reinforces the corrosive notion that self-serving elites write economic policy. In the long run, reform would protect the Fed from undesirable meddling.   

We can see from these points that The Economist is using race and gender suggestions as a foundation for even more propaganda. It wants to drain the Fed of any overt, private interest at all.

Once all private involvement or profit is wiped away, pro-Fed arguments can be advanced even more aggressively.

Here is the crux graf:

The most extreme sceptics peddle conspiracy theories about how the Fed “debases” the dollar. They propose abolishing the central bank entirely.  Any of these schemes would be disastrous—either because they would jeopardise the central bank’s independence, or because they would cast monetary policy adrift.

This is what The Economist is really worried about. Those who run the magazine will disguise the catastrophe of central banking anyway that they can, so long as they can preserve it.

For instance, there is no need to put quotes around “debases.” That is in fact what the Fed and other central banks do when they keep interest rates artificially low.

Monetary policy is actually price-fixing. What is there about price-fixing that The Economist finds persuasive or credible?

There is no way for free-market proponents to defend central banking. Fundamentally, The Economist – while trying to portray itself as free-market oriented – is an authoritarian publication.

It is impossible to endorse competitive capitalism while insisting on a monetary monopoly enforced by government.

Conclusion: The West and the world will begin to shift back to a more prosperous and sane economic model once monopoly central banking is abolished. Meanwhile, changing faces or even restricting banker participation is like rearranging deck chairs on the Titanic. The ship is still going down.

Posted in STAFF NEWS & ANALYSIS
  • Bruce C.

    I’m actually heartened that the Economist is open to reforming the Fed, but what about the old adage “if it ain’t broke don’t fix it, just throw it out?”

  • Praetor

    My gawd! Affirmative Action at its finest. My gawd!

    So, getting rid of the old white guys, is going to make all better. This goes to show, watching the Fed board and the Fed chair-PERSON is pretty much like watching a puppet show. The voices you here are coming from the back of the curtain, and the strings attached move the puppets in a curtain direction.

    The thing I see here. Their afraid to say who is really running this world, because, the truth has consequences, and they can not face those consequences, just yet!!!

  • Rojelio Febrero

    The Federal Reserve, like all central banks, is a PRIVATE organisation, although a lot Americans don’t know that, misled by the name itself. So it does not work for the good of the state, the nation, the people, … but only for itselve like any other business company. To talk about how it could change to be more accepted, is to collaborate with it. The only solution to make things better is to get rid of it! In the past, several presidents who saw through them, where eliminated when they opposed to it.

    http://whatreallyhappened.com/WRHARTICLES/allwarsarebankerwars.php#axzz40C8tsCPo

    • It is not private. It is quasi-public. The President appoints the chairman, for instance.

      • Rojelio Febrero

        In the President we trust …

      • olde reb

        Aw, come-on. Quasi-public is an ambiguous term, but the appointment of the chairman of the BOG, from a list that has been compiled and submitted (by Wall Street or who ?) surely is not a defining factor.

        Published records of expenditures is required of government agencies. When we get a comprehensive audit of the Treasury security auction accounts exclusively controlled by the FRBNY (and the $6 billion alleged to be secretly embezzled daily for Wall Street
        by those accounts. ref:
        http://www.scribd.com/doc/48194264/rip-off-by-the-Federal-Reserve-revised), then we might suggest a quasi-public agency.

  • Three pillars of sand our economic system is built on:

    1.Federal Reserve Bank
    2.Fiat Currency
    3.Fractional Reserve Banking

    The Federal Reserve tries to regulate the economy. Their mandates are maximum employment, stable prices, and moderate long-term interest rates.

    The Federal Reserve creates money and or makes money inexpensive by manipulating interest rates lower. Rarely manipulating rates higher. This is inflation. Prices go up and real wages go down.

    The Federal Reserve creates bubbles and crashes by pushing interest rates too low or too high for too short or too long of time.

    Who regulates the regulators at the Federal Reserve to keep the people safe from it and its mistakes? The only real regulator possible is the free market.

    With the Federal Reserve in place the market becomes the judge of the Federal Reserve decisions, rather than the regulator.

    The Federal Reserve in essence aids debtors and punishes savers. A depreciating dollar aids debtors and harms savers. An appreciating dollar aids savers and harms debtors.

    If you start giving an economy fish (easing Federal Reserve monetary policy, excessive federal government spending; deficit, national debt), the economy starts fishing less and starts dining more. Temporary misallocated (Keynesian stimulated) employment increases and sustainable production employment decreases.

    Abolish the Federal Reserve, the FDIC and all bank regulations except one; require full disclosure on full or fractional reserve backing of deposits. Treat gold, silver and cryptocurrencies as legal tender (not as an asset) for tax purposes.

    If you are concerned about the growing income inequality gap, if you are against war, against the military–industrial complex, against mega-mergers of companies and against invisible taxation, then you are against the Federal Reserve.

    • LawrenceNeal

      1.Federal Reserve Bank
      2.Fiat Currency
      3.Fractional Reserve Banking
      All three are frauds.

  • Martin the American redux

    Wow, once again the DB is on a roll! Just makes me sick thinking that anyone could take an article like this from the cited publication seriously.

  • Things just aint what they used to be, DB, and the Internet of Things is for ensuring that such remains so with CHAOS* prevailing assuringly.

    The following wholeheartedly agrees with the premise that it is certainly madness evidenced at the heart and in the minds of that and those drivering the Fed to imagine rearranging deckchairs on their Titanic will save their ravaged below the waterline behemoth.

    AMANFROMMARS WROTE ON SUN, 05/22/2016 – 12:14 [1605221514]

    …. adding more on http://www.afcea.org/content/?q=Blog-future-may-depend-learning-develop-global-conscience

    Pause and Cause for Thought. And such is only “The Beginning”?

    It is surely most certainly because of the successful entry of Russia and China into the post modern, ancient artisan fields which relatively anonymously and quite autonomously, remotely manufacture and virtually sustain/mentor and monitor both a learned and learning global conscience and advanced intelligent consciousness that prepares and leads the future and future building beings/systems/New More Orderly World Orders, that has the present and presents failed and stagnating, rooted and booted in and for a simple fiat currency dominated Western power base with complex IT satellite operations battling against increasingly damaging no returns with fantasy Ponzi market gains in ever deeper seas and greater sees of conflict in theatres providing madness and mayhem succour and shelter from the storms of their own insane inattention and reprehensible application.

    And that is always the real worst of dumb crazy moves when always eventually revealing and inevitably catastrophically flash crash self defeating.

    To consider future moves in more of the same with only a slight difference from either status quo establishments or executive office elites, because of the profits seeded and accrued in the past to those posts, is the folly of fools that destroys the easily corrupted and perverse empires alike and creates revolutionary evolutions way beyond the powers and energies of the familiar with conventional and traditional IT Command and Control levers/memes.

  • LawrenceNeal

    This is like asking if the MAFIA can be reformed, by making some insignificant changes, and leaving the criminal structure intact.

    • olde reb

      Surely you have noted the abrasion between the European BIS Rothschild ECONOMIST publication and the Wall Street Federal Reserve gang. Recall the Strauss-Kahn arrest with dropped charges after he resigned ? The difference of opinion on enforcing the Greek debt ?

      The ECONOMIST is trying to gather public support for getting more control over the Fed.

  • r2bzjudge

    “The most extreme sceptics peddle conspiracy theories about how the Fed
    “debases” the dollar. They propose abolishing the central bank
    entirely. Any of these schemes would be disastrous—either because they
    would jeopardise the central bank’s independence, or because they would
    cast monetary policy adrift.”

    The FED isn’t independent. The chairman is chosen by the President, not the reserve bankers. Monetary policy is adrift. Policy has prevented recovery from the 2008 recession.

    • olde reb

      The chairman of the BOG is selected by the president from a list submitted to him by the Fed. Who compiles the original list ?? Who has input into compiling current lists ?

      Do you really think that the Wall Street bankers that labored so hard to legislate the Fed do not control that list ?

      The operation of the Fed fits the Supreme Court’s definetion of a government contractor and not that of an agency. A contractor does not have government immunity. Further, agencies are established to preform a service for the public good. If the Fed is designed for the profit of Wall Street, it cannot properly be identified as an agency.

  • alohajim

    Thanks DB. Indeed, the ship is going down. There is no way to defend central banking and fiat currencies, no way at all. This smacks of sheer desperation – the Economist magazine has always been impressive in presenting eloquent prose, well thought out and presented arguments (even if dead wrong) and at the very least thoughtful. More minorities at the Fed will fix all our problems? ha ha ha ha ha ha! What’s next, more transgenders at the Fed will fix the problems? Me thinks the Economist has vastly overestimated the stupidity of its readers.

  • Pilgrim

    When government does the job it’s supposed to do, arrest thieves, cons and other violators, any economy will thrive. Ayn Rand said it best:

    “There are two potential violators of man’s rights: the criminals and the government. The great achievement of the United States was to draw a distinction between these two – by forbidding to the second [government] the legalized version of the activities of the first [private plunder].” – Ayn Rand in her essay, “Man’s Rights” (1963)

  • Pilgrim

    When apartheid was overthrown in South Africa, white farmers were evicted from their farms and the farms were given to blacks. Crippling shortages ensued. The blacks weren’t farmers, they were new regime insiders getting their payoff.

    Apartheid was a bad system, but the white farmers weren’t part of the problem.

    Central banking is a bad system. Handing it over to incompetent management will only serve one purpose: It will transfer the blame for the inevitable collapse from those currently running it to the “non-white, non-males” installed for the occasion.

    It’s nothing more than a brilliantly orchestrated and carefully choreographed exit for the guilty, complete with sacrificial lambs being offered up and bound to the altar.

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