Wednesday, February 24, 2010

Economist With Financial Services Committee For Eleven Years, Assisting With Oversight of the Fed, Lends Support to Ron Paul's Questions


Today, Ron Paul accused the Federal Reserve of having a hand in nefarious plots such as Watergate and arming Saddam Hussein. House Financial Services Committee Chair Barney Frank said that the Committee should look into it.

A 1992 article in the Los Angeles Times reports that the Fed had only a minor, indirect role in providing loans to Saddam (it was mainly the Department of Agriculture which made the loans, with backing from the State and Treasury Departments). The Times article also appears to say that most of the government officials involved thought that Saddam would use the loans for humanitarian purposes, and paints the Fed as the most reluctant of the involved agencies.

However, in 2008, the University of Texas published a book by Robert D. Auerbach - an economist with the U.S. House of Representatives Financial Services Committee for eleven years, assisting with oversight of the Federal Reserve, and subsequently Professor of Public Affairs at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin - which seems to support Paul's questions.

In Deception and Abuse at the Fed, Auerbach claims:

Major instances of Fed mismanagement and abuse of power that were exposed by [House Financial Services Committee Chairman/Ranking Member Henry] Gonzalez, including:

  • Blocking Congress and the public from holding powerful Fed officials accountable by falsely declaring—for 17 years—it had no transcripts of its meetings;
  • Manipulating the stock and bond markets in 1994 under cover of a preemptive strike against inflation;
  • Allowing $5.5 billion to be sent to Saddam Hussein from a small Atlanta branch of a foreign bank—the result of faulty bank examination practices by the Fed;
  • Stonewalling Congressional investigations and misleading the Washington Post about the $6,300 found on the Watergate burglars.
You can read details of Auerbach's allegations about Iraq here, and about Watergate here.

Moreover, a 1982 article from the Miluawakee Sentinel alleges:

Police who searched the room the Watergate burglars used found $4,200 in $100 dollar bills, all numbered in sequence. [Senator] Proxmire asked the Federal Reserve Board where the money came from. As he explained in a letter to the late Rep. Wright Patman (D-Tex.), chairman of the House Banking Committee: “I got the biggest run-around [from the Federal Reserve] in years. They ducked, misled, lied, and gave me the idiot treatment."

I don't yet have an opinion as to what this means, whether Auerbach has his facts right, or whether his allegations - if true - really amount to proving that the Fed had a major role in arming Saddam or stonewalling Congressional investigators about Watergate.

5 comments:

  1. I would say neither senility nor hidden dirt, nor a clever game, particularly when the real dirt is out there to be found:

    http://articles.latimes.com/keyword/united-states-foreign-aid-iraq

    http://articles.latimes.com/1992-02-25/news/mn-2628_1_foreign-policy

    ...perhaps a confusion of the facts of a time preferably forgotten by politicos today, about which we all need to be reminded.

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  2. What the other Anonymous said. Ron Paul is a hero.

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  3. Just got the shock of my life. I posted a number of comments on this very topic at ZeroHedge today. The comments were critical, most of then in a joking way, of Ron Paul. They were deleted, almost certainly because they were rated as junk by the preponderance of adolescent Paul supporters there. Such a practice reduces participation at the Zero Hedge to power relationship, to force, nothing else. Enough people disagree with you, your post is junk. That's worse than censorship, that's fascism and it makes a lie of every pretention any libertarian has ever made about themselves or their ideology. In my experience, the typical libertarian response to criticism is totalitarian. At this point I'd almost rather be at the mercy of the KGB than a gaggle of libertarian religionists. These people turn my stomach.

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  4. I agree with Ron Paul asking the questions, if we don't watch our government who will? Everybody knows when the cats away the mice will play.

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  5. In regards to the Milwaukee-Sentinal allegation about bills being found in all numbered in sequence, does not mean the fed was involved. How about the cash was widthdrawn from the bank, and they were brand new bills! Worked as a teller for years and when we received brand new bills they were all strapped sequencial order. Must be a conspiracy(!!) by the Bureau of Printing and Engraving.

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