Have you noticed that very few people in the mainstream media ever directly criticize the Federal Reserve? But why should that be the case? Criticizing top politicians from both major political parties has become a national pastime. Most Americans love to throw mud at either the Republicans or the Democrats. But we are told that the Federal Reserve is “above politics” and that it is absolutely vital that the Fed remain “independent”. The reality is that the Federal Reserve has more control over the performance of the U.S. economy than the president even does, and yet most Americans never spend much time thinking about the Fed at all. It is almost as if someone has instructed us to “ignore the man behind the curtain” and most of us just blindly obey. With the economy in such a mess and with the national debt exploding so dramatically, isn’t it about time that we had a national conversation about the performance of the Federal Reserve? Isn’t it about time that we evaluated whether the Federal Reserve is doing a good job or not?
Today I came across a Bloomberg article that was full of endless praise for the secretive Jekyll Island conference in 1910 that developed the plan for the Federal Reserve system. The following is a very brief excerpt from that article….
Although it may seem shocking to watch the 112th Congress, there was a time when national leaders were swift and decisive in getting things done. In November 1910, in the space of less than two weeks, a group of government and business leaders fashioned a powerful new financial system that has survived a century, two world wars, a Great Depression and many recessions.
But has this “powerful new financial system” really performed well for the American people?
The Federal Reserve system has now been in place for about 100 years. That is certainly long enough to evaluate how well it has performed.
So has the Federal Reserve done a good job?
Well, one of the things that the Federal Reserve is charged with doing is to protect the value of our currency. In other words, they are supposed to keep inflation under control.
In that regard, the Federal Reserve has failed miserably. The U.S. dollar has lost96.2 percent of its value since 1900, and almost 100 percent of that decline has come during the Federal Reserve era.
The other half of the Federal Reserve’s “dual mandate” is to keep unemployment low.
It doesn’t take a genius to figure out that the Fed has failed there too.