Brave Warriors, Bernanke and Ron Paul?
By Staff News & Analysis - July 19, 2012

Ron Paul vs. Ben Bernanke: final battle ends on surprising note … With Rep. Ron Paul retiring this year, his epic battles with Federal Reserve chairmen are coming to an end. But his last run-in with Ben Bernanke took a more reflective turn. Federal Reserve Chairman Ben Bernanke appears before the House Financial Services Committee Wednesday to deliver his twice-a-year report to Congress on the state of the economy. – Christian Science Monitor

Dominant Social Theme: These two giants of finance fought great battles that are now over. We shall miss them and their brave arguments.

Free-Market Analysis: The Christian Science Monitor, which used to be a newspaper and is now an entirely electronic publication, has posted an article profiling the battles of libertarian Congressman Ron Paul (R-Tex) with Federal Reserve Chairman Ben Bernanke.

The Christian Science Monitor seldom if ever deviates from the larger promotional trajectory of the power elite that creates certain dominant social themes – fear-based promotions that shove Western middle classes toward globalist solutions.

In this case, we see that the publication has framed the rhetorical contest between Paul and Bernanke as one of equals, each with a point of view. The article does not attempt to distinguish between the two points of view, nor to evaluate the arguments of each man.

It simply takes them at face value and provides us with a focus that is emotional rather than factual. Here's some more from the article:

Since 2006, when the latter was named as the chairman of the Federal Reserve system, the former – the libertarian congressman from Texas – has been haranguing Mr. Bernanke during his annual visits to the House Committee on Financial Services.

But with Mr. Paul retiring after this term, Wednesday marked the final chapter of six years of Paul-Bernanke combat. Their engagements have often been the stuff of Internet lore.

Paul-Bernanke matches "certainly made the hearings more interesting – and provided several memorable YouTube moments," said Rep. Spencer Bachus (R) of Alabama, the chairman of the House Committee on Financial Services at the top of the hearing.

The script usually goes like this: Paul launches into a lecture about Austrian economics for somewhere near half of his allotted time, followed by a perfunctory question to Bernanke. Bernanke answers succinctly, often with a slim smile. Paul then fires off several other questions which Bernanke deflects with a mix of concision and respectful disagreement.

Wednesday wasn't much different – but it dropped a curtain on a poignant, long- running episode of a broader battle within the GOP on fiscal and monetary priorities.

On one side of that divide stands Bernanke, a Republican and economist with technocratic bona fides after being thrice nominated by President George W. Bush to various posts, including his current spot, before being reappointed by President Obama. On the other is Paul, the leading light for the Republican Party's disaffected libertarian cohort who see the Bernanke years, including bank bailouts and rock-bottom interest rates for years on end, as not distasteful necessities but deep betrayals of conservative financial principles.

We can see from this excerpt that we will not receive an evaluation of the arguments of either side. A recitation is provided to us but that is nothing like an evaluation.

The article at least makes an attempt to summarize both anti- and pro-Fed positions, which is more than we see from most mainstream publications. Additionally, the article even mentions Austrian economics, which is another breakthrough of sorts, as this free-market school is rarely if ever mentioned in mainstream reports.

Yet, as noted, the article does not provide us with an evaluation of the two perspectives. There is no attempt to determine which point of view is (or might be) effective and which is destructive. Obviously, as a free-market facility, the Daily Bell would make the case that Austrian economics has the better case.

But we can make that argument based on facts. Monopoly fiat central banking is doomed to failure because it has no other competition and because those who are making the decisions at the Fed have nothing to fear from wrong judgments.

Additionally, there is no way to make RIGHT judgments when it comes to the amount or volume of money that central bankers decide to pump into the economy 1) because there is no statistical information that they can rely on or analyze and 2) because there is no way of even ensuring the money that is printed or allocated circulates properly.

This second point is quite important, as central bankers have decided to provide money through "banks" – though these banks in the modern era are no more than distribution facilities.

Once banks received gold and silver and were then provided written receipts for the metals that were stored in their vaults. But these days, the written receipts are known as "money" and are backed by nothing at all.

Not only that but banks themselves don't store gold and silver. In fact, their functionality is as a distribution arm for the "money" that central banks create.

The question then arises as to why central banks do not distribute currency directly to individuals. The obvious answer is that to do so would make people aware of the essentially farcical methodology whereby money is generated and provided.

There are other answers, as well, namely that to put money directly into the hands of the end user would generate terrific price inflation. But these are red herrings, in our view. Nobody knows what the result of printing money and providing it to people would be because it has never been done before.

Nor will it ever be done. The creation and distribution of money is an act of dark magic – or as close to magic as the modern-day, Western world comes to. The vocabulary of central banks is purposefully arcane and it is even difficult to discern how the process works and who is responsible behind the scenes despite the millions of words written daily about the process.

In fact, there is no justification for monopoly paper/fiat central banking. No one can predict the price or volume of money just as no one can predict exactly how or when that money will circulate.

Lately, as we have covered in some detail, the public banking movement, along with Georgism and mutual or social credit, has become more popular. From our point of view, these strategies all incorporate the same failed methodology as private/public, monopoly central banking itself – they do not provide any gauge of the price or volume of money.

It is impossible for humans to create and issue money with any reliability. Only the market itself and money competition can give us some assurance that money is being priced correctly and is being issued into the market at the right volume.

It is for this reason that we find the Christian Science Monitor article an exercise in a kind of demagoguery. While the article is written in such a way as to seem evenhanded, it does not really define the internal inconsistencies inherent in monopoly central bank money printing.

Of course, we should not be surprised by this, as the power elite that basically controls the mainstream media also apparently controls central banking. The Christian Science Monitor's brain trust is therefore in no position to fully examine the practice, much less come to reality-based conclusions about how it operates.

The Christian Science Monitor article seems to be an evenhanded attempt at explaining the differences between free-market economics and Keynesian money printing. But when examined closely, what appears to be an evaluation is seen to be merely a summary that sheds little light on the underlying issues.

After Thoughts

This is the problem with economic reporting generally, and even with the way it is taught in schools and universities. These economic schools are not "value free" despite the best efforts of the powers-that-be to make them seem so.

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