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I speak of course of my recent visit to the U.S. House of Representatives
to testify at Congressman Ron Pauls first hearing on the Fed as chairman of
the House Financial Services Committee. The Rayburn House Office Building,
like most government office buildings in Washington, D.C., is a very creepy
place. Knowing that the majority of the congress critters who reside in those
offices support the unnecessary wars in Iraq and Afghanistan (and worse), and
all the senseless death they have been responsible for, should send chills up
any decent persons spine.
As for the liars and bigots, one of the bigger ones, William Lacy Clay, a
congressman from St. Louis who is (unfortunately) a member of the House
Financial Services Committee, was in fine form. When he got his turn to
question me he first denounced Austrian economics as some kind of fraud
because it does not utilize the same positivistic methodology that, say, the
Fed economists do. You know, the ones who were completely clueless about both
the existence of the housing bubble and what to do once it burst. As
Congressman Paul pointed out in the hearing, as late as 2008 Fed Chairman Ben
Bernanke was still forecasting an increased pace of economic growth.
As seen in a YouTube video entitled "Ben Bernanke was Wrong," as
late as mid 2007 Bernanke was assuring the public on CNBC that there was no
sub-prime mortgage problem, and that the world economy was in fine shape.
"He had no idea what he was talking about," Congressman Paul
correctly stated.
It was Austrian economists like Mark Thornton, on the other hand, who were
warning of a housing bubble years before it burst. The Nobel Prize
committee would be shocked indeed to learn that Austrian economics is
fraudulent, having awarded the best-known Austrian of the twentieth century,
F.A. Hayek, the Nobel Prize in Economic Science in 1974. But hey, what does a
hack politician from St. Louis know about economics anyway?
Fed apologists are apparently in a state of panic over the first sighting
of two economists Richard Vedder and myself appearing before their
committee to (horrors!) criticize the Fed. Rather than ask me a single
question, Congressman Clay decided to lie about my background with a libelous
smear. First, some background information: About thirteen years ago three
fellow academics from Emory University, the University of South Carolina, and
the University of Alabama asked me if I would deliver a few lectures on the
economics of the "Civil War" to a group of about twenty students at
a week-long summer seminar. Two of them were historians and one was a
philosopher, and they wanted to add some economics to the curriculum. They
had just started something called "The League of the South
Institute." Since I lecture to students all over the country, and these
were three fellow professors who I respected, I enthusiastically agreed. I
recall it being a very enjoyable experience, as it always is when I get to teach
students who attend a summer seminar for no college credit, just for the sake
of learning. Such students are always among the very best that I encounter.
That is the only connection I have ever had with the League of the South,
which apparently still lists the titles of those old lectures somewhere on
its Web site.
Clay lied through his teeth by stating that I "work for" the
League of the South, and further stating that, consequently, I must endorse
everything everyone associated with that organization has said in the
succeeding thirteen years since I spoke to those students about the economics
of the Civil War. This makes as much sense as saying that I endorse
everything Congress says and does because I gave a presentation there
on February 9.
Nor am I bigoted toward the people at the League of the South either, as
is Congressman Clay. The oh-so-easily-offended Congressman Clay once told a
white member of Congress whose Memphis, Tennessee district is 60% black that
he could not collaborate with the Congressional Black Caucus for the benefit
of his black constituents "until your skin turns black." Hes
apparently an Obama-style "racial healer."
Having lied about my non-existent working relationship with the League of
the South, making it sound like I pack my lunch and go to work there every
day, Clay then declared that the Southern Poverty Law Center (SPLC)
apparently disapproves of the League of the South. What a shocker! This is
the same SPLC that accused the American Enterprise Institute in Washington,
D.C. of "mainstreaming hate" by sponsoring a public debate
on immigration policy. Their modus operandi is to label any individual
or group that effectively criticizes their far-left, socialistic agenda as a
"hater." Apparently, associating with anyone south of the
Mason-Dixon line in any way qualifies one as a "hater" and
potential KKK recruit in the warped minds of the hateful and libelous SPLC.
Congressman Clay was not yet finished with his lies. I sent the committee
100 copies of my testimony along with a short one-page bio, as they
requested. The bio listed several of my latest books, including Hamiltons
Curse and How
Capitalism Saved America. The former discusses such economic topics
as the origins and evolution of central banking in America, how America
became a corporate welfare state, the economics of public debt, the founding
of the Fed, the economic consequences of adopting the income tax, and more. How
Capitalism Saved America covers such topics as the meaning of capitalism,
anti-capitalism, the superiority of private versus government-operated
transportation systems, the benefits to "the working class" of
capitalism, the "robber barons," the history and economics of
antitrust, the role of the Fed in igniting the Great Depression, how the New
Deal made the Great Depression worse, and the economics of the energy crisis
of the 70s, among other things. And of course The
Real Lincoln tells the story of the seventy-year political war over
the "American System" of protectionism, corporate welfare, and a
nationalized banking system that was finally cemented into place during the
Lincoln administration.
The sleazy Congressman Clay, however, claimed that his crackerjack staff
informed him that I have written nothing about economics in the past
15 years. My writings are all about history, he said, oblivious to the fact
that economic history is a very relevant field to the question of the
performance of the Fed over the past century. Indeed, Ben Bernanke himself
claims to be an economic historian, having published numerous academic
journal articles on the Great Depression. Several of my books discuss the
origins of the first central bank, the Bank of the United States; its
(abysmal) performance; its destruction by President Andrew Jackson; its
replacement by the Independent Sub-Treasury System, Abraham Lincolns
critiques of that system; the adoption of the National Currency Acts and
Legal Tender Acts by the Lincoln administration; how that system performed
over the next fifty years; the creation of the Fed; and its performance. Clay
claims that, according to his crackerjack staff, there was nothing in all of
this that would be relevant to a hearing on monetary policy.
Congressman Clay slithered out of the hearing room (shortly after the
notorious Barney Frank vacated the premises) while a couple of his equally
odious, far-left compatriots threw softballs at "their" witness,
whose main argument was that the so-called Great Recession was caused by the
bursting of the housing bubble, which in turn caused consumers to begin
acting more responsibly by spending less and saving more. He didnt put it
that way, of course, but instead made the age-old (and thoroughly
discredited) Keynesian argument that spending, and not savings, investment,
production and work, is what causes economic growth and job creation. He made
no mention at all in his prepared statement of any possible cause of
the housing bubble in the first place. That would have been dangerous, for
everyone in the room would have pegged the Fed as the Prime Suspect. But at
the very end of the hearing he did offer his theory of the boom-and-bust
cycle: Prosperity comes about whenever the government hires more bureaucrats
and/or gives them more responsibilities; recessions occur whenever government
cuts back on the number of bureaucrats and/or their meddling in the private
sector. Bursts of regulation, he said, are the cause of prosperity, whereas
deregulation is the cause of recessions and depressions. The Democrats on the
committee sat there smiling and nodding their heads in approval. Do I really
have to comment about such an asinine theory?
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