Ralph Nader scolds the Federal Reserve
Ralph Nader has said what so many have been thinking, and he did so in a blunt and effective manner. No mild glossing over here, no mincing of verbiage. Nader rips the Federal Reserve chairwoman, her predecessor, and the entire arrangement of the semi-government-sponsored, non-governmental entity that has accrued so much power since 2007.
Please, don’t lecture us about the Fed not being “political.” When you are the captives of the financial industry, led by the too-big-to-fail banks, you are generically “political.” So political in fact that you have brazenly interpreted your legal authority as to become the de facto regulator of our economy, the de facto printer of money on a huge scale (“quantitative easing” is the euphemism for artificially boosting the stock market) and the leader of the Washington bailout machine crony capitalism when big business, especially a shaky Wall Street firm, indulges in manipulative, avaricious, speculative binges with our money.
F.A. Hayek held that central planners, which the Federal Reserve has become, make decisions that are deliberately beneficial to one group and deliberately at the expense of another. Two groups that benefit from the seven-year policy of zero interest rates are the federal government and Wall Street (the two culprits of the economic crash). No politics involved there, right, Janet? The deliberately harmed group? The prudent saver who had no fingerprints on the 2007/2008 crash.
Even Alan Greenspan, at one point in his chairmanship, championed the benefits of a high savings rate. Now the Fed’s policies have taught a generation that to save is folly.
This explains why such a large percentage of the population is two weeks away from being dead broke.
Mr. Nader continues:
Together, figure out what to do for tens of millions of Americans who, with more interest income, could stimulate the economy by spending toward the necessities of life.
Precisely. Economics is a zero-sum game, and with the initial jolt to the economy and consumer spending from low rates, the impetus soon recedes, as the credit cards get maxed out. Provide a fair return on savings, and economic activity just might surprise the theorists. In fact, they might even come up with some theories about zero interest rates as a detriment to economic activity.
The old adage “never a borrower or lender be” can be put on its head by an agency gone off the rails, unmonitored and unaudited, run either directly or indirectly by a cabal of bankers and politicians. Borrow up, leverage up. But isn’t that how the entire mess began seven years ago?