Right, But For The Wrong Reasons
Jan. 5th, 2013 02:38 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
peristaltorIt's old news, but Ron Paul will soon no longer hold office. So noted Robert Parry on Alternet late last November. Parry raised some obvious points, but I'm posting here to note that he missed or probably misunderstood many others to the point where he actually might have missed the point Ron Paul represented all along. Those points can be found right in the source material Parry quoted, Paul's own farewell address.
First, a taste of Parry's critique on Paul.
Parry then goes on to note how times were not so good for women, blacks, native Americans, etc., apparently glomming on to items of note in the Progressive agenda that improved. What Parry left from his laundry list, though, completely misses what seems to me to be Paul's point. Here is Paul's quote including what he said before Parry's excerpt:
After the women and minority history, Parry did go into economic conditions at the time; but again his listing seemed somewhat arbitrary compared to Paul's specific complaint. Small businessmen were compared to robber barons, and corrections to the banking excesses that brought the Great Depression were enacted by Roosevelt. All true. But what impact did the Federal Reserve's formation with its subsequent nationalized fractional reserve banking have? What about the institution of the Income Tax? Parry seems mute on these issues.
When he actually addresses Paul's words, he proves he can get them very, very wrong. Here's a section that stood out:
Got that? Parry notes Paul's words on the "current debt problem." What did Paul actually say to earn this dismissal? It's hard to miss, given that Parry quoted it directly.
As indicated by the underlined sections, Paul was not addressing the "current debt problem" brought by our national debt, but rather the fact that under fractional reserve lending our money is a marker of debt. If you have money, it is likely because someone else incurred a debt in a commercial bank. That, again, is how our money is created. And that is a concern for people—like Ron Paul—who believe money should be backed not by debt but by real assets. Paul continues:
I'm almost sad to say I agree fully with that final paragraph, if not completely with the same reasons Paul uses. To my eyes, we have indeed reached a pinnacle of debt, in that we can no longer increase the money supply based on real assets since the energy supplies to make those assets pay for their own debt creation can no longer be increased. Unlike Paul, who believes "[freedom], private property, and enforceable voluntary contracts" generates wealth, I believe the expanding use of energy sources performs this increasing wealth generation.
Still, Fed policy wonks—as blind to energy's role as Paul—are indeed "artificially" inflating the currency through Quantitative Easing round after round, and the unprecedented Federal Reserve buying of assets well beyond their market value, all in an attempt to desperately revive the economy to what it was. Which, again, Paul noted:
Don't worry. I'm not about to become a Rand-ian Paul supporter, not by any means. This post is simply to note that Robert Parry, a writer I hold in fairly high esteem, failed to do some basic research into the central tenets backing Ron Paul's speech and instead used his own personal preconceptions to interpret the speech. Please, read Parry's article. Why does he go on and on about the Founders and the history? He is not trying to dispute Paul's words concerning our current monetary system; if he were, Parry would have noted Hamilton's role in founding the First Bank of the United States rather than his role in penning The Federalist Papers. He would have noted Andrew Jackson's fight with the banking trust, not Washington's desire to form a more robust Federal government with the new Constitution. These historical details are more in line with Paul's concerns than anything Paul noted in his speech.
With Paul's philosophical backing more in mind than Parry's own, the former Representative's speech reflects far more intellectual cohesion and understanding than Parry's description as "rambling," even if you don't agree with the speech's conclusions at all.
I earlier made this observation in quite a bit less detail—I didn't, for example, read the Paul transcript, relying instead only on the portions quoted in the Parry article. One commenter noted, "Dude, you're deviating from the script." Exactly. Both "sides" of the dominant political power structure have decided that folks like Paul are "cranks" who make no sense. To demonstrate this point they take his words out of any context that actually explains what he is trying to say. Left or right, it makes no matter; misunderstanding cranks is far, far easier than trying to understand how our economy actually works. That would require some deep study far from the schools currently offering lessons in economics, and would lead to some very, very painful realizations.
Just like Ron Paul said it would.
First, a taste of Parry's critique on Paul.
In Paul’s version of history, the United States lost its way at the advent of the Progressive Era about a century ago. “The majority of Americans and many government officials agreed that sacrificing some liberty was necessary to carry out what some claimed to be ‘progressive’ ideas,” said the 77-year-old Texas Republican. “Pure democracy became acceptable.”
Parry then goes on to note how times were not so good for women, blacks, native Americans, etc., apparently glomming on to items of note in the Progressive agenda that improved. What Parry left from his laundry list, though, completely misses what seems to me to be Paul's point. Here is Paul's quote including what he said before Parry's excerpt:
I have a few thoughts as to why the people of a country like ours, once the freest and most prosperous, allowed the conditions to deteriorate to the degree that they have.
Freedom, private property, and enforceable voluntary contracts, generate wealth. In our early history we were very much aware of this. But in the early part of the 20th century our politicians promoted the notion that the tax and monetary systems had to change if we were to involve ourselves in excessive domestic and military spending. That is why Congress gave us the Federal Reserve and the income tax. The majority of Americans and many government officials agreed that sacrificing some liberty was necessary to carry out what some claimed to be “progressive” ideas. Pure democracy became acceptable.
(I underlined what I felt Parry should have noted.)
After the women and minority history, Parry did go into economic conditions at the time; but again his listing seemed somewhat arbitrary compared to Paul's specific complaint. Small businessmen were compared to robber barons, and corrections to the banking excesses that brought the Great Depression were enacted by Roosevelt. All true. But what impact did the Federal Reserve's formation with its subsequent nationalized fractional reserve banking have? What about the institution of the Income Tax? Parry seems mute on these issues.
When he actually addresses Paul's words, he proves he can get them very, very wrong. Here's a section that stood out:
. . . Paul’s blaming “progressive” reforms of the last century for the nation’s current economic mess lacks any logic, more a rhetorical trick than a rational argument, a sophistry that holds that because one thing happened and then some bad things happened, the first thing must have caused the other things.
The reality is much different. Without Theodore Roosevelt’s Progressive Era and Franklin Roosevelt’s New Deal, the direction of America’s capitalist system was toward disaster, not prosperity. Plus, the only meaningful “liberty” was that of a small number of oligarchs looting the nation’s wealth. (It would make more sense to blame the current debt problem on the overreach of U.S. imperialism, the rush to “free trade,” the unwise relaxing of economic regulations, and massive tax cuts for the rich.)
(Again, I underlined and emboldened.)
Got that? Parry notes Paul's words on the "current debt problem." What did Paul actually say to earn this dismissal? It's hard to miss, given that Parry quoted it directly.
Some complain that my arguments makes no sense, since great wealth and the standard of living improved for many Americans over the last 100 years, even with these new policies.
But the damage to the market economy, and the currency, has been insidious and steady. It took a long time to consume our wealth, destroy the currency and undermine productivity and get our financial obligations to a point of no return. Confidence sometimes lasts longer than deserved. Most of our wealth today depends on debt.
The wealth that we enjoyed and seemed to be endless, allowed concern for the principle of a free society to be neglected. As long as most people believed the material abundance would last forever, worrying about protecting a competitive productive economy and individual liberty seemed unnecessary.
(Me again. This will continue.)
As indicated by the underlined sections, Paul was not addressing the "current debt problem" brought by our national debt, but rather the fact that under fractional reserve lending our money is a marker of debt. If you have money, it is likely because someone else incurred a debt in a commercial bank. That, again, is how our money is created. And that is a concern for people—like Ron Paul—who believe money should be backed not by debt but by real assets. Paul continues:
The crisis arrived because the illusion that wealth and prosperity would last forever has ended. Since it was based on debt and a pretense that debt can be papered over by an out-of-control fiat monetary system, it was doomed to fail. We have ended up with a system that doesn’t produce enough even to finance the debt and no fundamental understanding of why a free society is crucial to reversing these trends.
If this is not recognized, the recovery will linger for a long time. Bigger government, more spending, more debt, more poverty for the middle class, and a more intense scramble by the elite special interests will continue.
I'm almost sad to say I agree fully with that final paragraph, if not completely with the same reasons Paul uses. To my eyes, we have indeed reached a pinnacle of debt, in that we can no longer increase the money supply based on real assets since the energy supplies to make those assets pay for their own debt creation can no longer be increased. Unlike Paul, who believes "[freedom], private property, and enforceable voluntary contracts" generates wealth, I believe the expanding use of energy sources performs this increasing wealth generation.
Still, Fed policy wonks—as blind to energy's role as Paul—are indeed "artificially" inflating the currency through Quantitative Easing round after round, and the unprecedented Federal Reserve buying of assets well beyond their market value, all in an attempt to desperately revive the economy to what it was. Which, again, Paul noted:
Without an intellectual awakening, the turning point will be driven by economic law. A dollar crisis will bring the current out-of-control system to its knees. . . .
This continuous move is no different than what we have seen in how our financial crisis of 2008 was handled. Congress first directed, with bipartisan support, bailouts for the wealthy. Then it was the Federal Reserve with its endless quantitative easing. If at first it doesn’t succeed try again; QE1, QE2, and QE3 and with no results we try QE indefinitely—that is until it too fails. There’s a cost to all of this and let me assure you delaying the payment is no longer an option. The rules of the market will extract its pound of flesh and it won’t be pretty. . . .
If the underlying cause of the crisis is not understood we cannot solve our problems.
Don't worry. I'm not about to become a Rand-ian Paul supporter, not by any means. This post is simply to note that Robert Parry, a writer I hold in fairly high esteem, failed to do some basic research into the central tenets backing Ron Paul's speech and instead used his own personal preconceptions to interpret the speech. Please, read Parry's article. Why does he go on and on about the Founders and the history? He is not trying to dispute Paul's words concerning our current monetary system; if he were, Parry would have noted Hamilton's role in founding the First Bank of the United States rather than his role in penning The Federalist Papers. He would have noted Andrew Jackson's fight with the banking trust, not Washington's desire to form a more robust Federal government with the new Constitution. These historical details are more in line with Paul's concerns than anything Paul noted in his speech.
With Paul's philosophical backing more in mind than Parry's own, the former Representative's speech reflects far more intellectual cohesion and understanding than Parry's description as "rambling," even if you don't agree with the speech's conclusions at all.
I earlier made this observation in quite a bit less detail—I didn't, for example, read the Paul transcript, relying instead only on the portions quoted in the Parry article. One commenter noted, "Dude, you're deviating from the script." Exactly. Both "sides" of the dominant political power structure have decided that folks like Paul are "cranks" who make no sense. To demonstrate this point they take his words out of any context that actually explains what he is trying to say. Left or right, it makes no matter; misunderstanding cranks is far, far easier than trying to understand how our economy actually works. That would require some deep study far from the schools currently offering lessons in economics, and would lead to some very, very painful realizations.
Just like Ron Paul said it would.