Jarrett, welcome. The reviewer fails on basic (elementary school level) logic and understanding of economics. I’ll take a stab…
“Throughout the book, Paul argues that his policies will bring about utopia, but history has shown that they bring misery. In the late 1800s, Paul’s policies of a gold standard, minimal business regulation, no income tax, and no Federal Reserve were in place. Yet, worker unrest reached an all-time high in the 1890s. Deflation cut wages in half for many workers while their rents stayed the same, making the basics of life unaffordable.”
Yes, it is because of paper money, abundant business regulation, the income tax, and the Federal Reserve that we enjoy toasters, fridges, horseless carriages, and work-free Sundays while being able to buy more than three meals with a day’s worth of average salary. I wonder why you didn’t make your argument even stronger by comparing our Fed-endowed present with, say, a Fed-defficient 15-th century where people lived 40 years on average, slept above barns to keep warm, and wore the same shirt their whole miserable lives before dying from a tooth infection. Paul must want to bring us all back to that. Thankfully, we have the piercing wit of reviewers like yourself to save us from this sinister plan.
"Alarmingly, he fails to then mention that, within a year after this, a severe depression followed with 600 banks failing (that’s equal to 12,000 in today’s population). "
Yes, insolvent banks fail when you take away their lender of last resort. That’s what’s supposed to happen. The goal of ending the Fed is not to prevent bank (business) failure, but to prevent depositors being taken down with them. It is the fractional reserve system and the Fed that is keeping depositors (pretty much everyone) hostage.
“Name an inside deal”
Every “deal” the Fed does is an “inside” deal. I don’t know your definition of “inside” but when I called the Fed asking for a 0% $10 billion loan that I desperately needed to tie me over, I didn’t get it. Others seems to have fared better:
The Fed’s Secret Liquidity Lifelines
“Without a Fed, the government can still commit itself to paying for things (like Medicare) that it lacks the tax revenue to afford. It’s like signing a one-year luxury apartment lease and only having the income to pay for two months rent.”
Have you tried to sign a luxury apartment lease while only having the income (forget assets, savings) for only two months rent? Who exactly would be lending money (which, mind you, no one is able to create out of thin air) to the government in amounts larger than the economy’s whole annual GDP, and at what interest? Would you lend me my annual salary’s worth at 0% interest for 30 years today? You think, without the Fed, dollars (or whatever money is) would be equally as abundant (to be lent out) as it currently is with the Fed?
“The crusades were also fought, in part, because of a silver and gold shortage in Europe that could be solved by invading the metal-rich Middle East. At least no invasion has ever occurred for the purpose of stealing paper money.”
With easy money from the Fed the government can fund (and funds) every silly expedition which would never have been funded if citizens were asked to pay for it directly through taxes. The clowns would be marched out of Congress after even hinting of asking.
“The enslavement of African-Americans, the slave-like living conditions of most workers in the late 1800s and early 1900s, and people imprisoned for questioning the government are all the result of the fiat money system? Really? Can you walk us through this, Dr. Paul? Unfortunately, he fails to elaborate. Yet another careless, unsupported statement.”
In what universe is Dr. Paul supposed to support statements he has never made?
“Looks like Dr. Paul missed the first day of his Econ 101 class. Inflation hurts the wealthy the most - i.e., a $100 million inheritance only buys $50 million worth of stuff 18 years later. On the other hand, those who earn too little to save (which is more than half the U.S. population) have no such concern, but will find a mortgage easier to pay as years go by.”
The rich hold assets whose prices go up with inflation. No rich person who keeps $100million in a checking account has remained so for long. The rich are also connected, so they know better than the rest the direction of where the next wave of money (“liquidity”) is going to be hosed, hence they position themselves accordingly. They also know (better than the rest) when said money (“liquidity”) hoses are about to be turned off (by our benevolent Bernank) so they can get out (sell) before the credit (“liquidity”) induced bubbles burst. In the mean time, the working stiff notices that his salary buys less and less milk, eggs, and gas and is being told to blame the “speculators” (the “greed-infested free market”) for pushing prices higher, or even better, “look, CPI says there’s no inflation, so quit yer yappin”.
“From the establishment of the FDIC and New Deal banking regulation in the 1930s through the mid-80s, banks couldn’t become too big to fail or avoid taking responsibility for risky loans, thus our banks were catastrophe free.”
Regulation cannot make banks take responsibility for bad loans. Only the profit and loss motive can. Banks, like any other business, must be allowed to take risks and fail. The problem with fractional reserve banking and the Fed, is that depositiors/savers are inextricably affected by this outcome. Without fractional reserves and the Fed, the negative repercussions from a bank failure are only borne by its investors and creditors (just like any other business) and not by its depositors – something like when your storage company goes bankrupt you simply move your stored items to another company, instead of them being used as the company assets in the bankruptcy proceedings.
“Bank failures ARE more regrettable! If the burger joint down the street goes out of business, I don’t lose my life savings!!! And can you imagine having to worry about what your bankers are planning behind closed doors?”
Without the Fed and under a gold standard, if a bank fails it would be exactly as if the burger joint went out of business. You can simply take your business (deposit) elsewhere. The bankers can do whatever they want behind closed doors and it would not concern you one bit.
“Let’s keep our money safe with the FDIC.”
You’re a fool if you think that FDIC is keeping your money safe. When the currently insolvent banks (yes, all of them) implode, your bank account can only be made whole via two methods: (1) the Fed creates the new $ digits on their computer (hyperinflation), or (2) the government taxes everyone to give the money to whomever lost their bank accounts (pretty much everyone!). Good luck with either of those “plans”.
“The government CAN manage money! Had Ron Paul been in Joseph’s place, he would have refused to implement a national plan to get through the famine, and he would have let the people starve in the name of liberty.”
If the government is so good at managing things why not let it manage the production of cars, food, books, newspapers, and movies, just like in the former SSSR or in N. Korea? I mean how could we ever expect that a completely unpredictable and chaotic free market comprised of greedy bastards could ever produce a loaf of bread that an average working stiff could possibly afford? Liberty (free markets, voluntary exchanges between greedy agents) is what feeds you and puts the shirt on your back, despite (not because of) government. The government can’t give you anything that it hasn’t previously stolen from someone who had produced it.
