Thursday, February 28, 2008

Ron Paul on Fox Business Channel

Congressman Ron Paul was on the Fox Business channel today:

Monetary Policy and the State of the Economy

Congressman Ron Paul released the following statement Tuesday on the “Monetary Policy and the State of the Economy” at a Financial Services Committee Hearing:

"Mr. Chairman,

Price controls are almost universally reviled by economists. The negative economic consequences of price floors or price ceilings are numerous and well-documented. Our current series of hearings have been called to discuss the most important, but least understood, price manipulation in the world today: the manipulation of the interest rate.

By setting the federal funds rate, the rate at which banks in the Federal Reserve System loan funds to each other, the Federal Reserve inhibits the actions of market participants coming together to determine a market interest rate. The Federal Reserve and the federal government do not deign to interfere in setting the price of houses, the interest rate on mortgages, or the prices of wood and steel. The Fed's actions in setting the federal funds rate however, because it reflects the price of money to a borrower and thus affects demand for money, affects prices throughout the economy in a manner less pervasive but just as damaging as direct price controls.

The example of the Soviet Union should have taught us that no one person, no group of people, no matter how scientifically trained, can arbitrarily set prices and not expect economic havoc. Only the spontaneous interaction of market participants can lead to the development of a functioning price system that allows the needs and wants of all participants to be met. The sense I get from reading much of the punditry is that the federal funds rate is set often by the whims of the Federal Reserve governors. Even mechanistic explanations such as the Taylor Rule rely on inputs that are often left up to the discretion of the Fed policymakers: what is the potential GDP, do we use CPI or PCE, overall CPI versus CPI less energy and food, etc.

The setting of the interest rate strikes me as quite similar to the way FDR used to set gold prices in the 1930's, at his whim, resulting in economic havoc and uncertainty. When market actors have to devote much of their time to discerning the mindset of government price-setters, to parsing FOMC statements and minutes, they are necessarily diverted from productive economic activity. They cease to become purely economic actors and are forced to become political forecasters. This is not a problem isolated to this particular case, as businesses are forced to reckon with tax increases, expiring tax credits, import tariffs, subsidies to competitors, etc. However, because the interest rate determines the cost of borrowing and therefore determines whether or not marginal long-term business investments are undertaken, this politicized interest rate manipulation has far more impact than other government policies.

This setting of the interest rate introduces the business cycle into the economy. Until we understand the results these Federal Reserve actions have, we will be doomed to repeat these periods of boom and bust. I urge my colleagues to study this matter, and to resist the urge for greater Federal Reserve intervention in the market."

Once Again, Ron Paul is Right

Once again, Congressman Ron Paul is right about the state of the economy.

Tuesday, February 26, 2008

On Immigration

The Center for Immigration Studies has recently reported that our immigrant population is now 37 million, up from 27 million in 1997. 1 in 3 of these immigrants are here illegally. This problem has exploded in the last 10 years despite the actions taken since September 11th.

Presidential candidate Congressman Ron Paul has a plan to secure our borders now:

"The talk must stop. We must secure our borders now. A nation without secure borders is no nation at all. It makes no sense to fight terrorists abroad when our own front door is left unlocked. This is my six point plan:

  • Physically secure our borders and coastlines. We must do whatever it takes to control entry into our country before we undertake complicated immigration reform proposals.
  • Enforce visa rules. Immigration officials must track visa holders and deport anyone who overstays their visa or otherwise violates U.S. law. This is especially important when we recall that a number of 9/11 terrorists had expired visas.
  • No amnesty. Estimates suggest that 10 to 20 million people are in our country illegally. That’s a lot of people to reward for breaking our laws.
  • No welfare for illegal aliens. Americans have welcomed immigrants who seek opportunity, work hard, and play by the rules. But taxpayers should not pay for illegal immigrants who use hospitals, clinics, schools, roads, and social services.
  • End birthright citizenship. As long as illegal immigrants know their children born here will be citizens, the incentive to enter the U.S. illegally will remain strong.
  • Pass true immigration reform. The current system is incoherent and unfair. But current reform proposals would allow up to 60 million more immigrants into our country, according to the Heritage Foundation. This is insanity. Legal immigrants from all countries should face the same rules and waiting periods."

Sunday, February 24, 2008

A President to Be Proud Of

There really is only one choice:

Support the Troops - Vote for Ron Paul

ARLINGTON, VIRGINIA – According to opensecrets.org, the top three contributors to Republican presidential candidate Ron Paul’s campaign are from the U.S. Army, U.S. Navy and U.S. Air Force respectively.


“No matter how you measure it, Dr. Paul has the support of our nation’s brave servicemen and women,” said Kent Snyder, Ron Paul 2008 campaign chairman. “His message of a strong national defense, and only going to war with a declaration of war – as mandated by the Constitution – resonates with those who risk their lives to defend that Constitution.”


No branch of the military appears among the “top contributors” to GOP frontrunner John McCain’s campaign.


Additionally, Ron Paul’s military contributions are greater than those of all other current candidates – John McCain, Mike Huckabee, Hillary Clinton and Barack Obama –combined.


The “Top Contributors” figures can be found at http://www.opensecrets.org/.


For more information on military contributions to Dr. Paul’s campaign, read this press release.