"Mr. Paul also has a clearly articulated view on the American banking system, laid out forcefully in his 2009 book, End the Fed. "
"the book's bottom line recommendations:
. return to the gold standard
abolish the Federal Reserve system
tends to be dismissed out of hand by many.
That’s a mistake
Mr. Paul makes many sensible and well-informed points."
"But there is a curious disconnect between his diagnosis and his proposed cure. "
" This disconnect tells us a great deal about why this version of populism from the right is unlikely to make much progress in its current form."
Mr. Paul:
“Just so that we are clear: the modern system of money and banking is not a free-market system. It is a system that is half socialized – propped up by the government – and one that could never be sustained as it is in a clean market environment.”"Mr. Paul is also broadly correct that the Federal Reserve has become, in part, a key mechanism through which large banks are rescued from their own folly – so that their management gets the upside when things go well and the realization of any downside risks gets shoved onto other people."
.
"There are no Ron Paul-type populists in Europe"
" I have never come across a mainstream politician there wanting to abolish any central bank."
"Mr. Paul represents an important strand of American libertarian thinking, seeing the root of all financial evil in the role of the government – and tracing this back to what he sees as deviations from the U.S. Constitution, made possible by the Supreme Court (beginning with McCulloch v. Maryland in 1819"
Aggressive Nationalism: McCulloch v. Maryland and the Foundation of Federal Authority in the Young Republic, by Richard E. Ellis
"The gold standard to Mr. Paul is a panacea, because it would restrict the role of the government ...in his version of the gold standard there is no role for a central bank whatsoever."
But
"Mr. Paul’s own book .. acknowledges the imbalance of power within the financial system that prevailed at the end of the nineteenth century ...
It is hard to find a moment of greater inequality of power than that of the gilded age of the late 1800s – with the gold standard and the associated credit system firmly working to the advantage of J. P. Morgan and his colleagues."
"Would abolishing the Fed really create a paradise for entrepreneurial banking start-ups – enabling them to challenge and overthrow the megabanks?
Or would it just concentrate even more power in the hands of the largest financial players? "
Mr. Paul “In a competitive and free system, deposits would not be unsafe;
any that were not paid back that were promised would fall under the laws of protection against fraud,”
"this seems to mistake the true nature of power in both modern American society – and in a world without any limit on the scale and nature of banks."
" Laws and rules do not drop from the sky; they are shaped in minute detail by an intense and very expensive lobbying process."
"There is nothing on Mr. Paul’s campaign website about breaking the size and power of the big banks "
enter boy of a billionaire..... junior Huntsman:
– who would force the biggest banks to break themselves up.
"Ending the Fed – even if that were possible or desirable – would not end the problem of Too Big To Fail banks. "
" There are still many ways in which banks they could be saved."
you bet
"The only way to credibly threaten not to bail them out
is to insist that even the largest bank
is not big enough to bring down the financial system."
how can he possibly believe this ?
my guess simplicity johnson thinks the power of wall street can be busted
even though the system will remain inherently unstable
--hence the Fed advocacy --
and episodic liquidity injections de rigour
of course if in the absence of liquidity injections banks would fail
then what is insolvence ?
test :
a stand alone no new funds only replacement funds
and in the unwinding of the bank
if liquidated assets came up short of liabilities ...zoink
process
replace short funding with long funding liquidity relief
but at what point is the existing portfolio fully unwound
notice you can't unwind a bank wityhout essentially putting it under
unwindings are like an estate execution
the point is the state killing banks
instead of letting them die at the hands of a mob of creditors
led by a judge
now we are into bankrupcy court with all its judge decided and enforced
magic dirty tricks
bankrupcy is where corporations go for a carve up
a process that even permits a reviving of the patient
by a set of "privateer" injectors"
