Sunday, July 26, 2009
Americans are taught that Franklin Delano Roosevelt instituted massive economic reforms and regulations which tamed the banking hooligans.
True, FDR helped pass a boatload of legislation, including Glass-Steagal and many other laws which helped rein in some of the worst abuses of the robber barons of the day.
But Ellen Brown points out that FDR chickened out from making the most important, most fundamental reform: taking the power to create credit and "print" new money away from the private banksters and give it back to the federal government, as the founding fathers intended.
By way of background, remember that Milton Friedman and Ben Bernanke have both said that the Federal Reserve caused the Great Depression.
In 1932, Congressman McFadden - chair of the Banking and Currency Committee for more than 10 years, and elected to Congress on both Republican and Democratic tickets - said the following in Congress:
The Federal Reserve Board, a Government board, has cheated the Government of the United States out of enough money to pay the national debt. The depredations and the iniquities of the Federal Reserve Board and the Federal reserve banks acting together have cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States; has bankrupted itself, and has practically bankrupted our Government. It has done this through defects of the law under which it operates, through the maladministration of that law by the Federal Reserve Board and through the corrupt practices of the moneyed vultures who control it ...In a Congressional address in 1933, McFadden quoted a newspaper article by the credit manager of the Atlanta Federal Reserve bank - Charles Hemphill:
From the Atlantic to the Pacific our country has been ravaged and laid waste by the evil practices of the Federal Reserve Board and the Federal reserve banks and the interests which control them ... This is an era of economic misery and for the conditions that caused that misery, the Federal Reserve Board and the Federal reserve banks are fully liable.
We are rapidly approaching a situation where the government MUST issue additional currency. It will very soon be the only move remaining. It should have been the first step in the recovery program. Immediately upon a revival of the demand that the government increase the supply of currency, we shall again be subjected to a barrage of skillfully designed and cunningly circulated propaganda by means of which a small group of international bankers have been able, for two centuries to frighten the peoples of the civilized would against issuing their own good money in sufficient quantities to carry on their necessary commerce. By this simple, but amazingly successful device these `money changers' -- parasites in a busy world intent on creating and exchanging wealth -- have been able to preserve for their private and exclusive right the monopoly of manufacturing an inferior substitute for money which they have hypnotized civilized nations into using, because of their pressing need to exchange goods and services. We shall never recover on credit. Even if it were obtainable, it is uncertain, unreliable, does not expand in accordance with demand, and contracts unexpectedly and for causes unrelated to the needs of commerce and industry...In our present situation the issue of additional currency is the only way out.And in 1933, Congressman Wright Patman asked Congress the following rhetorical question:
Why is it necessary to have Government ownership and operation of banks? Let us go back to the Constitution of the United States and follow it ... The Constitution of the United States says that Congress shall coin money and regulate its value. That does not mean ... that the Congress of the United States, composed of the duly elected representatives of the people, have a right to farm out the great privilege to the banking system, until today a few powerful bankers control the issuance and distribution of money - something that the Constitution of the United States says Congress shall do.But FDR did not heed the insights of McFadden or Patman. He kept the status quo of the Federal Reserve acting as the "central bank", even though the Fed caused the Depression.
He also maintained the Fed's power of creating money and credit, and charging the government interest on that money, even though that was contrary to the intention of the Founding Fathers and the Constitution. See this, this and this.
Because FDR chickened out, the Fed has again wrecked the economy, while the Feds member banks have raked in trillions in interest payments in financing the government debt.
In other words, the Fed's member banks have pickpocketed trillions of dollars from the American people over the years because FDR failed to make the fundamental reform which was actually needed ... returning the money-creating power to the government.