By Justin Williams
Marcus Licinus Crassus became the 8th richest person world history by hiring arsonists to set fire to houses in Rome while waiting around the corner with firemen. When the fire appeared uncontrollable, Crassus would approach the owner of the house with his firemen, giving them the ultimatum, “Give me your house at below market value or watch it burn to the ground.” Only then, if the owner agreed would he put out the fire.
Marcus, meet the Federal Reserve.
The Federal Reserve, who were the arsonists that started this financial fire with their loose monetary policies causing the current financial crisis, have now become the new firemen in charge of the financial markets.
And, all the while, the Fed Board of Governors stood in the background yelling, “Burn baby, burn!”
Once again, the government’s policies are directed at creating another short-term unsustainable bubble instead of trying to fix the long-term problem that put America into this mess in the first place, loose credit. Now even more loose credit is what the American people are going to get.
Ever since Rahm Emanuel uttered the words, “You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before,” the Obama Administration has pushed for more government spending along with (as ALG has reported) pressuring the Federal Reserve to use the printing press to help ease the enormous debt.
What will the Federal Reserve do when their own policies delude the banks into once again issuing loans that they shouldn’t have? Most likely, they will take a page out of the Obama playbook and divert the blame.
After the Obama Administration’s attack yesterday on the private sector, it is clear that the blame is put on market “recklessness and greed” and not the bumbling Fed bureaucrats who birthed this mess.
When the next bubble bursts in the Fed’s lap, they too will divert the blame toward market “recklessness and greed,” and God only knows what will come next. (Can you say “Novaya Ekonomicheskaya Politika?”)
The real answer, of course, in preventing another financial crisis is government transparency paired with less regulation, not more. With transparency, less regulation will follow. But there is one major obstacle stands in the way, government granted monopolies.
When the Fed was setting fire to the U.S. economy, they had (and still have) a monopoly on the U.S. currency. Just as when Crassus’ men were setting fire to Roman houses, he had a monopoly on the fire-fighting equipment.
Clearly, giving any organization a government-granted monopoly to any commodity –be it U.S. dollars or bucket brigades — without any transparency is a policy as duplicitous as it is dangerous. It virtually guarantees miscreance and sows the seeds of its own destruction.
It’s a little late for the good people of Rome. But, it’s not too late for the American taxpayer. Right now, a bill in the House of Representatives — H.R. 1207 — would, for the first time ever, empower Congress to audit the Fed. If passed it will provide much-needed transparency to an inordinately mysterious organization that, after Obama’s plan goes through, will be able to exercise ironclad control over every facet of the United States economy.
Which means that for American taxpayers – forced to watch their meager earnings go up in flames – the price of Obama’s Pyrrhic Victory will be ashes in their mouths.
Justin Williams is a Contributing Editor of ALG News Bureau.
