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Posted by on May 4, 2011 in Economy, Politics, Society | 2 comments

An Unlikely Economic Data Point


Today I heard a fascinating piece of information in a conversation with a friend who recently tried to take a book out of the library in Minneapolis.

He had just picked up his copy of, “The Creature from Jekyll Island”, which broadly is concerned Central Banking, especially the Federal Reserve (the “Creature” in the title), and fractional reserve banking in general (including the nature and creation of money).

The book is something of a bible to those who are interested in the relationship between finance, financiers and power, and to those who have been trying to tell us for years about the evils of Central Banking and its inevitable concentration of power in the hands of those who cannot be held accountable, and the related disenfranchisement of the citizenry.

Here’s the info that got me thinking: my friend had to wait 65 days to receive this book, and the library has (he estimated) about 30 copies of it.

Now, many people who have read this book would no doubt feel that it is more proselytizing than it is a scholarly work, but it is important because it is full of useful information that causes the reader to ask fundamental questions about fundamental institutions, in a way that is likely to increase the reader’s political awareness substantially. It is one of the few books that can single-handedly change one’s worldview. I know a fair few people who have had “a ha” moments upon reading it.

I have written extensively about the fundamental failure of the modern American political settlement, which systematically and necessarily transfers wealth from the productive classes to the financial classes for the benefit of the latter as well as the political class that benefits from the process (and therefore maintains it). The financial giggery-pokery of this corrupt settlement that moves power and assets from the common man to the few depends on Central Banks and the fractional reserve system – the very topics of the Creature from Jekyll Island.

What does it mean that my buddy has to wait 65 days to get one of 30 copies out of a city library? People who use libraries are typically unwilling or unable to spend $25 to buy a copy more conveniently in their local bookstore (or to spend even less to buy a second-hand copy on Amazon). Given that only about 1000 book titles sell more than 90 copies weekly in the USA, the data point about my friend’s wait for his copy is not insignificant.

It seems that at least some among us common men are making a serious effort to find out how America has put itself in its mess, and are looking for a deeper, more historical, more philosophical and more accurate understanding of the most important elements of our economic life than are presented to us by the mainstream media and by almost all of our politicians.

When I give talks about my work as the publisher of Watching (which translates and aggregates news and views about the USA from around the world), I often venture that anyone has time to listen to cable news or read a newspaper would probably learn much more about the meaning of political and economic events by spending half of that “free” time reading real analyses by people who’ve taken the time to study them and write a book about them, whatever their biases may be. I’m glad that at least a few library-goers in Minneapolis seem to agree with me.

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  • Both the left and right are too in love with the Fed to get too upset about the long term.

    For that matter, is there a long term?

  • merkin

    There are a lot of reasons to doubt the Fed. The Fed is an imperfect institution. It has been successful in accomplishing what it was designed to do, guaranteeing liquidity in the market, that is an adequate supply of money in the system, to avoid the every seven year panics or recessions we had experienced in the late 19th and first decade of the 20th century.

    But it was and still is a creation of Wall Street. Goldman, of Goldman Sachs sat in on every meeting of the Senate committee that wrote the law creating the Fed. (disclosure, I own Goldman Sachs stock, proof that like me you can profit from theft, don’t gamble own a piece of the casino.)

    The Fed’s often conflicting charge, low inflation and low unemployment, far exceeds its capacities. Especially when the majority of money created is created by the shadow banking system, i.e. Wall Street, not the Fed, often with disastrous results, as we learned in 2008.

    I have not read this book (and won’t be able to unless they release a Kindle or other electronic version.) But reading the reviews of it on Amazon (disclosure, I own stock in Amazon ) I get the sense that it is an example of many current books that take a little bit of truth to an illogical extreme.

    Yes, the Fed is run for the benefit of the 3000 or so people we call Wall Street and their banks. Yes, the Fed has caused some of the problems it was formed to prevent and it has failed to prevent the some of the problems it was formed to solve. But the function that the Fed supplies is still needed. We can’t go back onto the gold standard, so called asset based money, no matter how much some wish we could. And no, the solution is not to eliminate the Fed and rely on the market system to police itself.

    The United States is long over due for a true central bank. One that can control the large corporate and private banks not just by regulation, but through the most effective means available, competition. Increasing credit, lending, by stepping in to do it if the banks don’t rather than increasing the money supply and hoping. Lowering credit card interest rates by offering lower interest credit cards.

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