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L. Neil Smith's THE LIBERTARIAN ENTERPRISE Number 191, September 23, 2002 SO WHAT DID WE GET?
Review: CRASHMAKER: A Federal Affaire
Special to TLE [Part III of III] Time out - Background on the FED The FED is what is known as a quasi-government agency. Half of its members are appointed by the member banks, the other half by the President. The President also appoints the Chairman of the Board of Governors with the approval of Congress. The Chairman is not directly answerable to the President; i.e. the President cannot fire him. The President can decide whether or not to reappoint a Chairman once his term is up. The FED is supposed to manage the nation's monetary affairs for the good of the nation regardless of what the politicians and political parties want. The FED is setup this way in order to insulate it to some extent from the politics of Congress and the ruling political party. This is the theory anyway. What's All This Fuss About the FED? The confused reader might be asking, "Why should we care about the FED? Personally, I'd rather carry folding money than lug around pounds of gold coinage." Before the recent revelations of corporate accounting 'irregularities,' before the collapse of the 'dot.com' boom, the economy had already taken a downturn. You see, Alan Greenspan, the current Chairman of the FED thought he saw a little inflation out there and he raised interest rates on the money member banks borrowed. No inflation ever appeared, then or now, yet he continued to raise interest rates, until the economy foundered. This should teach us all a very important lesson. When you concentrate power into any bureaucracy, you also concentrate something else - vulnerably. We are all economically vulnerable to whatever decisions the FED's Board of Governors make. They determine the affordability of homes, cards, credit cards, etc. Why should any small group have this kind of power over our economic lives? Its central planning of the economy and the collapse of the Soviet Union should have taught us a thing or two about that. Also, the FED's mismanagement of the money supply [along with other government interventions] is what caused the great depression. How? Here's what Leonard Read has to say [3], Phase I: The Business Cycle [Also discussed on page 515-16 in CRASHMAKER.] Conspiracy Theories - Why Take Them Seriously? "Do you believe everything that happens in politics is the accidental result of disconnected actions of atomistic individuals each of whom proceeds independently on the basis of his own idiosyncratic ideas, with no input, influence, or involvement of others?" Lara challenged him. [Pages 441-2] The trouble with people who subscribe to conspiracy theories is that they tend to look for complicated explanations involving 'secret societies,' when simpler explanations are readily available. Lets take, for example, the formation of the FED and the events that took place a Jekyll Island, GA in 1910. We know that a clandestine meeting took place involving banking elites Nelson Aldrich, Paul Warburg, John D. Rockefeller, and others. We know that the participants denied having the meeting for several years thereafter. We also know that it was there that the keel of the Federal Reserve System was laid[4]. Nevertheless, do we succumb to the normal conspiracy theory of saying, "These guys were part of some secret Masonic society that has been hell-bent on taking over the planet since the dawn of time?" Or do we say, "These guys were simply doing what the minions of business interests always do. They were creating legislation and national policy that would benefit their particular business interests." Personally, I think it was the later. There is also the problem of people who believe that Jewish banking interests hold everybody's' economic fortunes hostage and control our politicians like puppeteers. {I'll get to the racism in a minute.} Ask yourself this question, in reality what would be the political difference in a USA wherein our politicians dance to the tune of 'hidden controllers' and a USA without such interference? Answer: none. Even without 'hidden controllers', politicians would still want a Federal Reserve System and the bottomless pool of 'wealth' and power it produces. Therefore, as far as modern day politics is concerned, this issue is irrelevant. In business we would call this a 'sunk cost.' Why the authors take conspiracy theories seriously, I'll never know. They seem far to intelligent for this. Perhaps they thought it was an interesting plot device. Those Pesky Jews It annoys me no end to have to write this section. I shouldn't have to do it, but you see, there are idiots among us - people who cannot be safely entrusted with serious thinking. And, to this day, in the year 2002, these morons pop up on talk radio moaning and groaning about 'evil global Jewish banking cartels.' Do the authors of this fine novel subscribe to this idiocy? Fortunately, no. On page 864 we find... "All those theories of a Jewish conspiracy are meshuggeneh...It's only natural for Jews in any country where they are a distinct minority to serve the politically powerful for protection from discrimination and for advancement in both public and private life. It's a matter of self-defense and self-preservation. In America, many Jews...became liberals because that opened up opportunities for careers in government agencies, foundations, academia, entertainment and the media. Of course, the more Jews prospered and the more power they exercised, the more loyal they became to liberalism as their greatest benefactor. Conspiracy had nothing to do with it. Simple self-interest - that makes sense." Conclusion This is an interesting and an intellectually challenging novel this is well worth the time of anyone who enjoys wrestling with political, moral and economic ideas. And well written, too. The fact that I actually read every word is testament to how well the authors present their ideas. Normally, if a book bores me, I set it aside after 20 pages or so. The fact that the authors kept me reading is testament to their 'word-craft.' Nevertheless, I must point out a possible blemish on the authors' otherwise libertarian armor. It may be unfair to impute to the authors beliefs they assign to one of their characters. One of the 'good guys' [dos Santos] believes that the War on Drugs is a great idea - that it is simply being fought stupidly. His solution, form inner city militias and run them drug dealers out of town. Frankly, nowhere in the book do the authors explicitly state that they are libertarians. However, its plain from the contempt that they display for republicans, democrats and other political 'faiths,' that they couldn't be anything else. If you are a 'high concept' individual who enjoys thinking the 'big thoughts,' then this novel is for you. Just don't take the conspiracy stuff to seriously. By the way, I found out about this novel from talk radio. And it was there that I heard it described as the ATLAS SHRUGGED of the financial markets {which it certainly is.} I never heard about it from reading any libertarian literature or catalog. I don't belief the libertarian community knows that it exists. ______
[4] Murray Rothbard, The Case Against the FED G. Edward Griffin, The Creature from Jekyll Island
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