Gary North’s Reality Check (Jan. 22, 2013)
The largest banks are immune to reform or regulation. They control the Federal Reserve System, and have since the beginning in 1914, when it opened for business. The Congress defers to the FED. So, the banking system never changes much. There is never a significant reform.
Today, the 12 largest U.S. commercial banks hold 69% of the deposits. If you think the free market produced this allocation, you are the victim of a Keynesian economic theory. The centralization continues relentlessly. All the “democracy” chatter in Congress is simply a form of self-delusion.
Woodrow Wilson, the so-called reformer, signed the Federal Reserve Act of 1913, passed in the final hours before the Christmas recess. He signed it within two hours after the Senate passed the bill.
The fix was in.
The fix has been in ever since.
There are three main approaches for banking reform: the Austrian approach (end the FED: the free market precious metals coin standard), the monetarist approach (reduce bank regulation: automatic fiat money), and the Greenback approach (bank nationalization: fiat money). None of this is likely until after Washington defaults.
RICHARD FISHER: MONETARIST
Richard Fisher is the president of the Federal Reserve Bank of Dallas, a privately owned regional central bank that operates under the monopoly-granting authority of the United States government. This year, he is a member of the Federal Open Market Committee (FOMC). The FOMC is described as follows on the website of the Federal Reserve System, a government agency.
Fisher is the FOMC’s lone monetarist. He is a disciple of Irving Fisher (no relation), the Yale University economist whose monetary theories were adopted by Milton Friedman. Friedman called him America’s greatest economist. In a previous article, I have argued that Irving Fisher was a true crackpot. He was a racist. He was a leading eugenicist. He believed that science could be used by the government to reverse the negative effects of mentally and morally inferior races that reproduce more rapidly than whites do.
Richard Fisher wrote this laudatory recommendation of Irving Fisher’s monetary theory.
During the first quarter of the 20tth century, Irving Fisher was one of America’s most celebrated economists. But sadly, most Americans today have not heard of him. Even as his reputation among the public faded with the years, his reputation within the economics profession has steadily risen. Fisher (no relation to the undersigned, though I would like to claim access to his gene pool) was a pioneer in many theoretical and technical areas of economics that today are the foundation of central bank policy. One such achievement was the creation of indexes to measure average prices, the bedrock for all current monetary policy.
Ludwig von Mises in The Theory of Money and Credit (1912) spent many pages refuting Fisher’s monetary theories. I can do no better than to parrot Richard Fisher: “But sadly, most Americans today have not heard of him.”
Fisher was correct when he said that Irving Fisher’s reputation has been restored among professional economists. I have described this rehabilitation as an aspect of academia’s war against free market money.
Richard Fisher was a vocal opponent of Ron Paul.
(For the rest of my article, click the link.)