Fed Up: Why the Federal Reserve is Bad for America

Fed Up

The Most Important, Most Powerful Institution in the World

It probably is, as the author suggests, “the most important, powerful institution in the world.” A better understanding of the ongoing errant behavior of this centenarian creature of Congress is the goal of Fed Up.

It’s the system, man. The Federal Reserve System, its official name. You may know it as the Federal Reserve. Or simply The Fed. And if it wasn’t misbehaving, that might have made for a different book title . . .

Zero Interest Rate Policy

One of the biggest errors of the Fed, says DiMartino Booth, was its December 16, 2008 move toward a Zero Interest Rate Policy (ZIRP) on the Fed funds rate–paid by banks to banks. (Chap 1.) The Fed funds rate also affects the Prime rate, paid by bank consumers and the interest rates paid to savers.

At this time DiMartino Booth was already working for the Research Department of the Dallas Fed, which gave her a unique insider’s view of the behind-the-scenes action.

While the ZIRP prescription seemed to work, with the U.S. “officially” out of the recession by the middle of 2009, the zero interest rate policy didn’t change until the end of 2015. Things can move sooo slowly at the Fed . . .

In the mean time, savers, especially retirees, are cheated out of billions of dollars, year after year. And inefficient zombie corporations are being kept alive well past their natural lifespan, helping to create a drag on the economy.

Secrecy . . .

Equally disturbing was the Fed’s veil of secrecy in making $3.3 trillion dollars in loans to Wall Street (Chap 14), all the while tightening credit requirements to Main Street. I can still recall all the controversy in 1979 surrounding the so-called Chrysler Bailout. One loan to one company. All kinds of concessions were required by both labor and management and no one was happy at the time. Flash forward to the beginning of the Great Recession and thousands of loans were made in secret to some of the biggest corporations and banks in the world, and yet where were the so-called public defenders?

Inflation Anyone?

Another ill-effect of current Fed policy is an inflation rate running ahead of wage increases. A cart of groceries can cost a family hundreds of dollars. Not to worry, the Fed’s economists (their numbers are legion), don’t bother to calculate the cost of food (or fuel) in their economic models, so why should we? A local insurance agent tells me a number of folks on fixed incomes have let their home insurance lapse in order to pay more pressing bills. Say what? This would be what is considered anecdotal evidence by the Fed, not worthy of their high and mighty data sets.

Danielle DiMartino Booth concludes with suggestions for a more streamlined Federal Reserve System. Congress needs to end the Fed’s dual mandate of price stability and maximum employment (price, per se, is simply information), and focus on stabilizing the buying power of the U.S. dollar. The Fed needs to stop its manipulation of the currency (via inflation) to jolt savers into spending money. In short, the Fed is in need of some serious, serious reform.

I agree and recommend reading Fed Up to anyone wanting to learn more on how the U.S. economy arrived at its current–depending on who you ask–stagnate state, and what is needed to insure it is able to move forward now and in the future.

Thank you for reading this.

Disclaimer: A copy of the book was provided by the author.

 

Valleys of Death: A Memoir of the Korean War

Valleys of Death

 

From time to time I read books and some I find noteworthy. This is one of the books.

The Korean War is sometimes called the “Forgotten War.” The numbers are staggering: 36,940 American dead, 92,134 wounded, 3,737 MIAs and 4,439 POWs. Behind every one of the numbers is a story. Valleys of Death is Bill Richardson’s personal story of the Korean War.

Bill Richardson was too young for the Second World War, but by 1950 already had had four years in the Army and was due to be discharged. The only thing was that he didn’t want out of the Army and he had to fight to re-enlist. This is were he begins his saga.

As corporal he was given leadership responsibilities as a weapons platoon NCO or non-commissioned officer. Getting ready for war, Richardson soon comes to the conclusion that readiness on the part of the Army for this war was lacking.

From training onward, Richardson takes charge. Soon, perhaps too soon, he and his men are in Korea. The war has been in progress for several months and the North had the initial advantage. This would soon change as Richardson and his men fight hill to hill, hills with names like Hill 570, Hill 314, 401, 307 and many others. Here both enemy and friends fell under the North’s relentless, fanatical “human assault” attacks. By October 1950, his battalion suffered 465 casualties since its arrival in August.

By Fall, Richardson finds himself north of the 38th parallel in Pyongyang. Luck changes quickly for Richardson when the Chinese Army adds 200,000 of their regulars to the mix.

Richardson’s position is overrun by the Chinese. He regroups, fights back numerous assaults and attempts a breakout. Capture is followed by a death march and then a death camp. Richardson is now officially listed as Missing in Action. Richardson stays alive by sheer willpower as 30 to 40 prisoners die everyday because of the horrid conditions. “Starvation, lice, beatings.” After several years things start to improve and then the war ends.

Takeaways

One life lesson Richardson discovered was that “suffering is part of the human experience and can be overcome. A good lesson and one that I’d learned through experience.”

Key to Richardson’s survival was inculcating a personal will to survive. Richardson saw strong men give up and heroes emerge from unexpected quarters.

Keep taking calculated risks and prepare for opportunity. Richardson escaped when he could and made other plans to escape should the opportunity present itself.

Never give up.

Hardcover: 352 pages
Publisher: Berkley Hardcover (December 7, 2010)
ISBN-10: 0425236730
Available as a Kindle download.

The Korean War should be remain etched in our memory and Richardson’s story helps us to remember.