Monday, November 16, 2009

Ron Paul - Is The Federal Reserve Audit Dead? And Some Timely Ramblings On Regulations.

There is no doubt that many of the Washington elite do not want the Federal Reserve to be audited regardless of whatever support they may give. ie, Moving their lips. As we have questioned before, there are likely to be many dirty secrets within its walls. Just as are within the walls of many opaque Washington institutions. If I were to guess, those secrets would have little to do with today's financial fiasco and more to do with profligate international meddling by Washington politicians - international briberies, paying off international hoodlums and corrupt governments, etc. A few people have written of this type of policy in Washington but it has yet to really gain momentum in the mainstream.

Apparently, Ron Paul's audit is dead. Or so it appears from his remarks. That is, until we hit the next phase of this crisis and public outrage hits another high note. Potentially a permanent one until real change is dealt with in Washington.

What's also interesting in this video is Paul's disdain for government regulation. That the market is all seeing and knowing. And, also a general perspective that ideally the government should have no role in social programs. There is a difference between keeping people down with a private banking system, ie his desire to gain transparency in the Federal Reserve, and government or society's support to a family with a special needs child, as an example. Or someone who has experienced life-altering trauma defending our country.

I like Ron Paul immensely because he is honest and seeks nobility in government. Not because of his views on society or economics. His views on government's role in society, social contracts and regulation are dubious at best and voodoo at worst. Those who advocate no government regulation, views advocated by many interpretations of Austrian economics, are supporting positions of ideology rather than understanding economics or markets from a mathematical, market theory or gaming theory perspective. In other words, his perspectives are not borne out by sound science.

The argument that regulations don't work so we shouldn't have them is a common argument by many Austrian ideologues. In fact, what we have witnessed for the last thirty years is Austrian economics in action as it pertains to a debate of "free markets" versus regulations. It doesn't matter if we are talking about the FDA, the EPA, anti-trust laws, banking regulations, financial market regulations, trade within the American economy or with other nations, medical insurance or any other regulation. These agencies and the associated rules of engagement in the economy have been gutted. The movie Food Inc highlighted, as an example, that FDA inspections have dropped by approximately 35,000 annually since the mid 70s while our population has exploded. It's no coincidence that we have increasing incidents associated with the safety of our food. Our economy does not simply suffer from Wall Street run amok. It suffers from corporations run amok due to the dismantling of regulation. Aka free market ideology supported by many Austrian economics ideologues. Free market ideology not supported by sound science.

This isn't anarchy central where those most willing to trample their fellow man win the game - yet that is exactly the free market ideology we see today. We live in a society which is subservient to a rule of law set forth by a free nation. That includes in the game of economics. When these laws, ie regulations, are dismantled, we end up with a lawless economic system which is only limited by the animal spirits of nature. Do anything and everything to destroy or be destroyed.

In the free market anything is possible. And, that is exactly what we have been witnessing.

posted by TimingLogic at 5:43 AM