Tuesday, September 18, 2012

The Fourth Branch of Government

In light of the recent QE3 package, the great Judge Andrew Napolitano appeared on Fox News to enlighten the less-than-great crew at Fox & Friends about the Federal Reserve.

From Mediaite.com:

Judge Andrew Napolitano stopped by Fox & Friends‘ curvy couch on Tuesday, where he shared his criticism for the Federal Reserve.
Arguing that it is neither federal nor a reserve, the Judge noted that the job of the Fed is to make the president — no matter who the president may be — look good. 

Federal Reserve chairman Ben Bernanke, he continued, said he would essentially create 40 billion in cash “out of thin air” and put it in the accounts for the federal government. “That is more cash chasing, available for, the same amount of goods and services,” he said. “Answer: inflation.”

Later, the Judge shared a brief history of the government’s relationship to money in the U.S., including a description of the Coinage Act.

What the Fed is now attempting, he concluded, is ultimately a short-term solution designed to “make someone look good” between now and the election — “and you know who that is.”
Take a look, via Fox News

The Judge is spot-on as always - but one quote from the interview caught my attention more than anything Mediaite mentioned. The Judge, echoing a similar comment from George Will, stated that "The Fed is like the fourth branch of our government."

The Federal Reserve, and all of the power and influence it wields, is indeed already a De-facto fourth branch of the United States Federal Government. Of course, anyone who has read the Constitution knows that the government is supposed to have only three branches! Unlike the official three branches of government, each with its own specific set of powers that check and balance those of the other branches, this fourth branch of government is unique in that nothing is out of its reach and none of the other branches seem to be an effective check against it.

Existing under the guise of being a private entity, the Federal Reserve is without a doubt the branch of government that poses the greatest danger to liberty. The way that the Fed inflates the money supply by printing money out of thin air destroys the buying power of the US dollar. Anyone familiar with the Weimar Republic understands how inflation can destroy a society. Washington's wasteful, unconstitutional and deadly spending is likewise partly funded by the Fed's ability to print at will. Ron Paul correctly states in his excellent book End the Fed that "It is no coincidence that the century of total war coincided with the century of central banking."

Is it finally time to end the Fed, now after 100 years of disastrous Fed intervention? That would be nice but it does not necessarily need to end at that conclusion. Competing currencies would be a good compromise in the pursuit of sound money - hell, even an audit of the Fed's books is at least a common sense first step towards a stronger dollar. Unfortunately, the Federal Reserve still has its tentacles firmly gripped around the financial and political systems and there is no end in sight.


No comments: