"The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money."
Alexis De Tocqueville, Democracy in America (1835)
Last week the economic central planners at the Federal Open Market Committee (FOMC) of the Federal Reserve Bank issued a statement tempering their previously optimistic forecast for recovery from the “Great Recession”. In its statement, the Ben Bernanke-led FOMC indicated that the weakening recovery has made it necessary for the Fed to keep interest rates at “exceptionally low levels…for an extended period”. Additionally, the FOMC stated it will change course. Instead of shrinking its historic $2 trillion balance sheet, the Fed will reinvest money from maturing mortgage bonds to buy up more assets (notably government treasury bonds). All of this will be done in an effort further to stimulate the markets to recovery.
No one doubts that something needs to be done to reverse the downward spiral that our economy is once again taking. After all, consumer confidence is down, factory orders are down, the real unemployment rate which takes into account discouraged and underemployed workers is still north of 16 percent, Food stamp usage has skyrocketed to a record high of 40.2 million recipients, and Bank repossessions and foreclosures are still a massive problem. No, nobody doubts that something needs to be done, but that something should not be more of the same that got us into this mess in the first place and is keeping us in it in the second.
Now, I would not question the intelligence of anybody on the FOMC. Bernanke and his comrades are smart folks. They all have fancy degrees and have spent years on Wall Street and/or in the government cutting their teeth becoming seasoned economists and financiers. They certainly are not wet behind the ears as is said in the business. So then if it is'nt mental ability maybe it's motives that drive the FOMC members to pursue what appear to the reasonable layman as an insane policy. Let’s analyze the situation further by looking at historical examples.
Article comments
1 - Baronius
Oh, come on, Kenn! One sentence about Tocqueville? I know you like to talk about the Fed, but one sentence? It was the title of your article. And Tocqueville's interesting! And Fed policy isn't what Tocqueville was talking about.
2 - jeannie danna
Yipeeeeee! BC's back! : )
3 - jeannie danna
Kenn,
There is another reason we have a central government. If all power was left within the states, then the common good of the nation as a whole would suffer.
"When the Constitution was adopted in 1789, the Founding Fathers recognized that no government could function if it relied entirely on other governments for its resources, thus the Federal Government was granted the authority to raise taxes. The Constitution endowed the Congress with the power to "…lay and collect taxes, duties, imposts, and excises, pay the Debts and provide for the common Defense and general Welfare of the United States." Source
:) I'll have to go research your Tocqueville.
4 - jeannie danna
"All those who seek to destroy the liberties of a democratic nation ought to know that war is the surest and shortest means to accomplish it." -Alexis de Tocqueville
5 - jeannie danna
Just one more quote
"I cannot help fearing that men may reach a point where they look on every new theory as a danger, every innovation as a toilsome trouble, every social advance as a first step toward revolution, and that they may absolutely refuse to move at all."
-Alexis de Tocqueville
This sounds like the opposition to, green renewable energy, to me!
: )Yes, this guy's a prophet.
6 - Kenn Jacobine
You are absolutely right. It has been estimated that if we brought all the troops home and stopped empire building we could save $1 trillion a year. In the meantime China just became the 2nd largest economy in the world. Welfare to the Military Industrial Complex has to stop, but any president who tries will probably lose his life - i.e. John Kennedy.
7 - jeannie danna
some things are best left unsaid...
You agree with me in #3
8 - Kenn Jacobine
I agree with #3 but we probably disagree as to what Congress can spend the taxes on. I believe it can only spend the taxes on powers given it in Article 1 Section 8 and other parts (necessary clause) of the Constitution where specific powers are delegated to Congress
9 - jeannie danna
Well Kenn, you better write something that we don't agree on... :)
10 - Summer Said
Pure genius. I totally concur with what you espouse. Alexis De Toqueville, a 24 year old French aristocrat not only predicted everything that would come to be in America, he was summarily correct. When I read Democracy in America while in college, I realized, knowing it is generally required reading for any pre-law student, hence most if not all politicians have read it, whilst no one paid heed, that we as a country were and have been on a downward spiral. That and President Eisenhowers exit speech, makes my blood run cold. Systematically, our politicians, Congress, the Fed, and forgive the expression, the rest of the n'er do wells, are hell bent on the US's demise. It is up to the populace to enact change. Unfortunately, change occurs rather slowly. Not until the collective conscious is on the same page will we see it happen. Once a body is in motion, it tends to stay in motion. God knows, by then I could be long gone or at least have moved out of the country.
Bravo Kenn.