THE FEDERAL RESERVE UNDER QUESTION

Over the course of our most current economic crisis, the Federal Reserve has issued over $12 trillion in bailouts and loans. Although the Government Accountability Office (GAO) is currently allowed access to some of the Federal Reserve’s spending records, there are several things in which the GAO is prohibited from auditing (including, but not limited to the Fed’s transactions with foreign central banks, governments, and international financial institutions). (http://www.auditthefed.com/about-the-audit/)

The Federal Reserve (which is actually our country’s third central bank) was originally founded after a bank panic in 1907. The Federal Reserve Act of 1913, established the Federal Reserve out of an effort to provide a last resort for banks across the country, in the event of reoccurring “bank runs”, which inevitably lead to panics like the one we experienced in 1907. (A “bank run” is essentially when too many funds are withdrawn by depositors thereby leaving a bank unexpectedly incapable of operating, because most of those funds are not held in reserve, but rather, invested elsewhere.)

(http://en.wikipedia.org/wiki/Federal_Reserve_System#Addressing_the_problem_of_bank_panic)

Now is not the time to debate whether or not the Federal Reserve System was an adequate approach to preventing bank panics, or financial crises. But it certainly is time to question the constitutionality of a monetary institution pulling on trillions of dollars from the US Treasury, and yet somehow free from answering the simple question being begged by the American people—Where exactly did all of this money go?

Although the complete abolition of the Fed might be a fringe idea, the mere auditing of the Fed is not. Recently, HR 1207, The Federal Reserve Transparency Act (which mandates a GAO audit of the Fed), has 317 supporters in the House of Representatives. The question of how the Senate will respond still remains…

Not surprisingly, Federal Reserve President Mr. Bernanke seems to be one of the only outspoken opponents of such a bill. “Speaking recently at the Economic Club of Washington, Fed Chairman Ben Bernanke stressed the importance of the Fed's role as a supervisor and reiterated his opposition to a plan that would expose the central bank's monetary policy decisions to review from the Government Accountability Office.” (Sloan, http://www.onwallstreet.com January 1, 2010). If “monetary policy-making” includes the spending of $12 trillion of the American people’s money, I can’t imagine a reasonable argument as to why we ought not to have the right to see where this money is going.

By the way, if you would like to urge your senator to support the Federal Reserve Sunshine Act S 604, calling for greater transparency in this monetary policy making of the Federal Reserve, click here: http://www.auditthefed.com/?mode=actionpage

-E.C.Soria

HAPPY HOLIDAYS AND MERRY CHRISTMAS?

As we walk around observing the lights of the Holiday Season, one cannot escape the battle of "political correctness" under the displays of sugar plumbs and candy canes. It's an issue that has been prevalent within our country over these last few decades and as of late, political measures have been taken to ensure the words, "Merry Christmas," be expelled from our government institutions. The
explanation lies in a letter by Thomas Jefferson to Danbury Baptist Association in the State of Connecticut, during his Presidency in 1801. He briefly mentions that there should be a, "wall of separation between church and state," but before that he blatantly declares that our government should make, "no law respecting an establishment of religion, or prohibiting the exercise thereof..." [Thomas Jefferson, January 1st, 1801] But here we are today watching our own government take immediate action to swoop in to school systems preventing celebratory words being displayed because they are associated with a specific religious belief.

Can't we at least come to the agreement that our very Constitution was founded by God-fearing men, and founded on a moral law that had rich roots in religion, and more specifically, Christianity? That it was those foundational beliefs that encouraged them to allow liberty equally to all men? John Adams, an important player in the Constitutions' creation, wrote in a letter to Jefferson that, “The general principles upon which the Fathers achieved independence were the general principles of Christianity…I will avow that I believed and now believe that those general principles of Christianity are as eternal and immutable as the existence and the attributes of God.” [June 28, 1813; Letter to Thomas Jefferson] Jefferson's position was not a complete removal of God and Government, but of Government preventing God. Isn't that exactly what the Government is doing now?

Now we've become sensitive to even declaring to other people, "Have a Merry Christmas." Why so, when it's a holiday like any other holiday and at its core holds wonderful value sets; friends, family, love, and merriment? That's what I'm saying when I want someone to have a Merry
Christmas. I'm not trying to convert someone to my religious beliefs but am merely sharing a celebration, which I hold dear to my heart. I'll gladly wish people a "Happy Holidays" along with my "Merry Christmas," but it's sad when our governmental institutions can't share the same sentiment and yet if you go to a foreign country, like China, they have no problem sharing that merriment. "[In the United States] Christmas carols were banned in public government agencies of any kind. You couldn't sing them. The banners were being removed. I happened to be in Beijing, China, and I remembered standing in Tiananmen Square, biting cold day... snow blowing... shivering there with hundreds of others... remembering what happened there years ago and then walking contiguously to the Forbidden City. First gate another 50-75 yards, second gate another 50-75 yards, third gate... you walk in through the 5th gate and there you see the old palace built in the 1400s and a big banner, 'Merry Christmas.'" [Ravi Zacharias, "Secularism and the Illusion of Neutrality," Penn State University] So as they say in China, Merry Christmas everybody!

-N.S.Soria

U.S. HEALTH CARE REFORM BILLED

Former President Bill Clinton urged Democratic Senators to pass health care reform this year stating, “the worst thing to do is nothing”. Economist Paul Krugman recently reiterated this tone of urgency, when he stated, “we should be more concerned about the consequences of health care reform not passing than passing” (Weiss, Forbes, 12/14/09). It seems the health care debate in Washington has been dwindled down to a mere rush against the clock, a dialogue seeking any reform rather than the best reform. I suppose the American people are left to answer the lingering questions without much help from Congress….

What will happen to the finances of private Health Insurers and Providers, as more people gravitate towards a public, government-run option for health coverage? According to the health care reform bill in the Senate right now (The Patient Protection and Affordable Care Act), the public option (created to “compete” with the private options) will be financed by taxpayers and run in a similar manner to Medicare. But in reality, “Medicare reimburses doctors and hospitals at rates 70% to 80% below those of private insurers” (WSJ, A20, 12/11/09). Naturally, hospitals and doctors are forced to eat their losses by treating people covered with a public option or they turn and raise prices for those with private insurance. Either way, it was dauntingly noted in the same article that about half of U.S. hospitals are running a deficit or are close to it. It seems apparent that adding more patients under a government bill will follow former patterns in causing greater increases in the costs burdened upon the private payer or the hospitals. It sounds like this type of reform might therefore put us back in square one. If so, “doing nothing” doesn’t sound like the worst option if it happens to save us from spending $900 billion on a program that only drives costs up for health care consumers.

Another lingering question might be related to the sudden demand this bill would pose on family or general practitioners. The Washington Post published an interesting story about a family practitioner who serves in a rural area in Texas (“The Only Doctor in Town” 12/5/09). This single doctor is responsible for proving medical services for families stretching across a 25-mile radius. This same article mentioned the recent pattern of shortage in general practitioners graduating from Medical School, because the financial incentives for studying a specialty are more than worth it for students accruing the thousands of dollars of debt that Medical School imposes. If the status-quo is already leaving us with a deficit in family doctors, I can only imagine that deficit widening as people are more likely to make general visits if they know those visits will be covered by checks from the government.

These questions inevitably lead back to the moral rhetoric behind the push for health care reform. I mean, how can I even ask these questions and still have a heart? Although, it seems more popular to view health care as a human right, we must remember how we first attained such a position to even make such high demands for what we are inherently entitled to by virtue of our humanity. Health care started as an industry. Our doctors are the best and most specialized in the world because we have a system that provides incentives for all the work it takes to get to the places of greatness in which our medical professionals currently find themselves. Essentially, our health care system has been an industry; providing incentives for continued innovation, research, and risk-taking. Unfortunately, industrious development always leaves room for inequality. But ought we to demonize the process by which health care took in its development while simultaneously exclaiming that everybody has a natural right to take advantage of its benefits?

-E.C.Soria

THE 'NECESSARY' AFGHANI WAR

Eleven months after our president has taken office, we finally hear that he has reached a decision on Afghanistan. Although we are not sure of its specifics yet, we are assured that “after eight years of an under-resourced war, Obama intends ‘to finish the job’”. (Economist, Nov. 28, 31). Obama has often contrasted the “unnecessary war” in Iraq to the “necessary war” in Afghanistan.

Maybe Afghanistan is necessary because the CIA is largely responsible for the funding of the radically Anti-Soviet jihad that took root in the 1980’s; fought and won by Islamic jihadists that were well funded and well informed via secret routines of the American, Pakistani, and Saudi clandestine diplomacy. Those who fought the Soviets, make up the same exact network of Afghan rebels, which we cannot seem to grasp hold of today in our fight for stability in the region. After 1979, when networks of stateless Islamic radicals began to form groups like Bin Laden’s Al-Qaeda, American diplomats and CIA officials formed partnerships and alliances with these groups in an effort to establish a stronghold in the region thereby limiting the influence of the real “enemy”, the Soviet Union (Coll, Ghost Wars, 17). Why is this war so much more necessary when we merely seem to be fighting the very same networks of rebels we eagerly provided weaponry for when they were on our “side” during the cold war?

It seems that even the “necessary wars” come about from routinely meddling in conflict abroad. Conflict far removed from having anything to do with the preservation of liberty or representation of the common interests of us normal people back home… But we’re the reason for our military’s existence anyways.... right?...

When Hamilton was defending the ratification of our country’s constitution, he made some comments on “providing for the common defence”. He stated (along with some modern day translations), “All that kind of policy by which nations anticipate danger (i.e. unilateral warmongering), and meet the gathering storm (i.e. the storm of Arab tribal and/or religious warfare), must be abstained from, as contrary to the genuine maxims of free government (maxims like popular sovereignty, freedom of speech/opinion, or maybe balance of powers between the three branches and between state and federal governments?). We must expose our property and liberty to the mercy of foreign invaders… because we are afraid that rulers (Both Democrats and Republicans) might endanger that liberty, by an abuse of the means necessary to its preservation (We haven’t had any problems with the abuse of Executive powers within our country’s recent war history, have we?)” (Hamilton, Federalist 25). The idea of abstaining from the rooting of our military in the midst of the “storms” of other nations’ affairs sounds like an extreme idea right now. But the rhetoric of “victory in Afghanistan” necessitates the federal government’s presence (for an indefinite period of time) in the internal affairs of a foreign country. These preemptive defense tactics are thereby abusing the very domestic liberties that such rhetoric is claiming to preserve and further throughout the world, by leading to the usurpation of federal and executive powers (powers that were originally intended to depend on the will of the people). How did we come to a place in our government’s history where Hamiltion’s Federalist 25 sounds extreme or even radical?

-E.C.Soria