The Gospel Coalition

Love him or hate him, you probably have an opinion about Ron Paul. He’s a guy on the fringe, a guy who does not quite seem to fit into any camp but his own. And a time when the economy is undergoing a severe test, he is one of the few politicians who actually sounds like he knows what he is talking about when it comes to economics. Firmly rooted in the Austrian school of economics, Paul advocates pretty much the opposite of all America has done in the past few years: Where Washington has continually bailed out those corporations it deems too big to fail, he advocates allowing them to go bankrupt; where Washington remains firmly committed to fiat currency, he is eager to return to the gold standard; where Washington looks increasingly to socialize health care (and those companies that would fall apart but for federal aid) he has implicit confidence in the free market and its consequences; and where Washington continues to grant far-reaching power to the Fed, Paul advocates eliminating it altogether.

Few people understand macro-scale economics (heck, judging by the debt loads of most Americans I’d suggest that few people can wrap their minds around household economics) and fewer still understand the role of the Federal Reserve in economics and politics and the sometimes-fine line between them. Among the immensely important organizations in Washington, the Fed has one power that is unique: the ability to create money out of thin air. You do not need a graduate degree in economics to understand the magnitude, the potential ramifications, of this kind of power. When you consider that the Fed operates without any real congressional oversight, that it is protected from audits and that its leaders are appointed rather than elected, it becomes more shocking still. Ultimately, if you want to understand money in America, you need to understand the Fed. As Paul says, “It is irresponsible, ineffective, and ultimately useless to have a serious economic debate without considering fundamental issues about money and its quality, as well as the Fed’s massive role in manipulating money to our economic ruin.” Paul has spoken endlessly about the Fed for decades now and in this book he advocates his solution: get rid of it.

Paul minces few words. He says, “We need to take away the government’s money power. The banking industry needs its welfare check ended. The dollar’s soundness depends on its being untied from the machine that can make an infinite number of copies of dollars and reduce their value to zero.” Later he says, “The Federal Reserve System must be challenged. Ultimately, it needs to be eliminated. The government cannot and should not be entrusted with a monopoly on money. No single institution in society should have power this immense. In fact, I believe that freedom itself is at stake in this struggle.”

While clearly targeted at a general audience, End the Fed is stock full of “economese”–the lexicon of economics–and this may make for difficult reading for those not well-versed in such matters. I often found myself confused, reading back a few lines or pages and, on occasion, just giving up and moving on. In several areas Paul assumes just a little bit more knowledge than I’ve got. Inflation is a relatively simple concept to understand from a personal perspective, but when it comes to understanding its causes and effects on a national or international level, my head begins to spin. Nevertheless, I read on and largely enjoyed Paul’s arguments. He argues from three perspectives: the philosophical, the constitutional and the economic. In each case he makes a compelling case that the Fed is harming America far more than it is helping and that its very existence is contrary to the U.S. Constitution. Of course the book is inherently one-sided and one must assume that the Fed’s supporters can make arguments of their own as to why it can and should remain; they will undoubtedly also argue for increasing rather than decreasing its mandate. I must have Libertarian leanings (or perhaps just common sense leanings) because I tend to agree with Paul. There has to be a better way and one that is more consistent with American ideals. “The Federal Reserve should be abolished because it is immoral, unconstitutional, impractical, promotes bad economics, and undermines liberty. Its destructive nature makes it a tool of tyrannical government. Nothing good can come from the Federal Reserve.” At least he does not leave us wondering what he really believes.

Created in time of crisis, it is ironic that the Fed is responsible for many of the nation’s subsequent economic crises, at least according to Paul. Constantly manipulating the markets, responsible for bubbles created and bubbles burst, and forever cranking out more real and virtual greenbacks, the Fed is at the center of American economics and politics. Its power is immense, its accountability near non-existent. Should not this, alone, call for abolition or, at the very least, radical modification?

Verdict: Wait for the Paperback