Don't Just Get Rid of Bernanke; Get Rid of the Fed - Home

Don’t Just Get Rid of Bernanke; Get Rid of the Fed

America’s Federal Reserve Chairman, Ben Bernanke, is in danger of being fired. Two Democratic senators have joined the Republican opposition to his nomination for a second term, and Senate Majority Leader Harry Reid is scrambling to muster the necessary votes to block a filibuster that would send Bernanke packing.

And that would be fine with me. Bernanke (photo at right) is just another in a long line of overpaid puppets who have enriched a privileged few over the years by pretending to protect the American economy. Indeed, if it were up to me, I wouldn’t just get rid of Bernanke, I would get rid of the Federal Reserve – as President Kennedy wanted to do before he was conveniently assassinated.

I know, I know… I sound like one of those Tea Party conspiracy theorists. But, if you’ve been reading my blogs, you know I am a liberal Democrat on most issues. And I’m sure you know President Woodrow Wilson was no “tea bagger.” Yet when he realized the implications of persuading Congress to create the Federal Reserve back in 1913, Wilson moaned, “What have I done to my country?”

Facts are facts. And the fact is the Federal Reserve is a scam. A bunch of powerful international bankers sold the American government the idea of paying them to distribute and regulate the country’s currency – no questions asked.

The benefit was supposed to be protection against “politicization” of the national money supply. I don’t have to tell you how that has worked.

But the main reason for abolishing the Fed is that it’s a lousy system. It actually gets in the way of good government.

In an article for Truthout today, health writer Ellen Hodgson Brown suggests Americans could easily afford to finance universal health care if they followed in Canada’s footsteps.

Way back in the 1930s, Canadians had the good sense to run off the private bankers who were “creating” their money, and form their own central bank.

Here’s an excerpt from Ms. Brown’s article:

The decision to fund government programs through a publicly owned central bank was driven by a crisis much like that in the U.S. today. The country was in the throes of the Great Depression, and the money supply had radically contracted, causing businesses to close and unemployment to soar. Many Canadians blamed the private banks for making conditions worse by failing to extend loans.

Prior to the 1935 Bank of Canada Act, private banks in Canada issued their own banknotes, which were regulated less by the government than by the Canadian Bankers Association. The country’s largest private bank, the Bank of Montreal, served as the government’s de facto banker. By the eve of the Great Depression, interest on Canada’s public debt had reached one-third of government expenditures, and many officials believed that the government needed a central bank to come up with the money to pay its foreign debts. A Royal Commission was put together in 1933 which supported creating a bank. A major debate then ensued over whether the central bank should be public or private.

Credit for the Canadian public banking model goes largely to a Canadian mayor named Gerald Gratton McGeer. He has largely been lost to history, and his book, “The Conquest of Poverty,” has been long out of print; but according to local historian Will Abrams, it was McGeer’s lengthy presentations to the Ottawa Common Banking Committee that clarified for bankers, economists and legislators how well a publicly owned bank could work. McGeer’s model was based on the public banking system of Guernsey, an island state between Britain and France. The Guernsey government began issuing currency to pay for public works as far back as 1816. To this day, its system of publicly issued money has allowed its inhabitants to maintain full employment and enjoy quality infrastructure, while paying modest taxes and without suffering from price inflation.

The Bank of Canada became publicly owned in 1938 under Prime Minister William Lyon Mackenzie King, a staunch supporter of McGeer’s vision for a public central bank. King maintained: “Until the control of the issue of currency and credit is restored to government and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of Parliament and of democracy is idle and futile. Once a nation parts with the control of its currency and credit, it matters not who makes that nation’s laws. Usury, once in control, will wreck any nation.”

Ms. Brown notes that:

The U.S. government could fund universal health coverage in the same way (as Canada). Ideally, it would nationalize the Federal Reserve or set up its own government-owned bank.

Hey! What a great idea! I hope President Obama and the Democrats figure it out before it’s too late.