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Federal Reserve
From RationalWiki
The Federal Reserve, often referred to as "the Fed", is a central bank in the United States, established in 1913 by the Federal Reserve Act.
[edit] What does it do?
The Fed essentially controls the amount of cash money in the United States. It has 12 branch banks (Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco) which loans money to banks within their respective regions. When one of the banks determines that the cash supply is too low in its area it will place an order with the Treasury Department to print/mint more bills or coins. This money is then lent at an interest rate to banks who then lend it to people and businesses. Previously the money supply was effectively in the hands various Wall Street movers and shakers (e.g. J.P. Morgan).
[edit] Anything else?
The Fed has been a frequent subject of conspiracy theories alleging the Fed creates inflation, recessions, and even the Great Depression, through manipulation of the money supply. Father Coughlin, the John Birch Society, Liberty Lobby, Eustace Mullins, Pat Robertson, Texe Marrs, and several others have frequently expressed such conspiracy theories. In some (but not all) cases these conspiracy theories have an anti-Semitic component, alleging "Jews" secretly or openly control the Fed. These theories are furthermore sometimes tied in to other conspiracy theories about the Trilateral Commission or the New World Order, or manipulation of the U.S. economy by the Rockefeller and Rothschild banking families.
Under Alan Greenspan, the Federal Reserve apparently thought interest rates were some type of yo-yo, so they decided to drop interest rates down to 1%, then realizing such a move will inevitably lead to inflation, raise interest rates to 5.25%, leading to our current economic recession. It also didn't help that nobody on Wall Street learned anything from the S&L crisis.
Critics of the Fed make a big deal out of the fact that the Federal Reserve is a private corporation partially governed by the same banks it is supposed to regulate rather than a federal government agency. So what? This is similar to the status of Amtrak, Fannie Mae, Freddie Mac, the Tennessee Valley Authority, and the United States Postal Service, all examples of other major clusterfucks. Of course, being a major clusterfuck is not synonymous with being a conspiracy controlling the world -- indeed, they are almost complete opposites.
Ron Paul is a frequent critic of the Fed and advocates for its abolition, which possibly explains why his 2008 presidential campaign garnered support from quite a number of wingnuts who might otherwise not agree with the more libertarian aspects of his views. After the economic downturn of 2008-2009 (framed by some as "everything went to hell in a handbasket" and other sky-is-falling apocalyptic nonsense (or not nonsense ... only time will tell)), Ron Paul told America, "I told you so."
Oh, the irony! The chairman of the Federal Reserve Board for two decades (1986-2006) was Alan Greenspan, a former disciple of Ayn Rand.
