Ron Paul on the Federal Reserve in the Wall Street Journal

Does Truth, Facts, or Logic Ever Enter into Their Decision on Whom to Publish?

The Dismal Political Economist has been able to leave Texas Congressman Ron Paul alone during the race for the Republican nomination for President for 2012 for the obvious reason that all but a few voters are going to leave him alone also.  But apparently desperate for something print on their editorial pages, the Wall Street Journal has given Mr. Paul a forum to speak on the Federal Reserve System and monetary policy. 

Here is the way Mr. Paul starts out, which is not a good indication of better things to come

To know what is wrong with the Federal Reserve, one must first understand the nature of money.

And expectations are fulfilled when Mr. Paul goes on to explain how the business cycle works

The Federal Reserve has caused every single boom and bust that has occurred in this country since the bank's creation in 1913.

which will come as a surprise to every economist and historian, regardless of political persuasion.  And no, Mr. Paul does not explain how the boom and bust cycle occurred in the U. S. before the Fed was created.  Maybe he believes they never happened.  Ignorance is, after all, a defense for people like Mr. Paul.

And there is nothing like picking out some dead economists from nearly a century ago to add to this gibberish

What the Austrian economists Ludwig von Mises and Friedrich von Hayek victoriously asserted in the socialist calculation debate of the 1920s and 1930s—the notion that the marketplace, where people freely decide what they need and want to pay for, is the only effective way to allocate resources—may be obvious to many ordinary Americans. But it has not influenced government leaders today, who do not seem to see the importance of prices to the functioning of a market economy.

And then here is another completely bogus statement

The Fed's quantitative easing programs increased the national debt by trillions of dollars

a statement that illustrates so lacking a basic understanding of economics, fiscal and monetary operations and basic finance as to call into question whether or not the person who wrote should be allowed outdoors after dark.  (Deficits cause the government to borrow and that increases the national debt, the Fed has nothing to do with that, in case you need to know Mr. Paul. And the Quantitative Easing program lowered interest rates, saving the government hundreds of billions).

But we finally come to the point of Mr. Paul 's Fantastic Voyage into the land of economic fiction.

The continued existence of an organization that can create trillions of dollars out of thin air to purchase financial assets and prop up a fundamentally insolvent banking system is a black mark on an economy that professes to be free.

So what we need to do is get rid of the Fed, let the banking system collapse and then everyone will be free.  Maybe so, but free and destitute and living in a society that has returned to the economic level of several hundred years ago is probably not an advancement of human kind. 

The real mystery here is not that Mr. Paul believes this stuff, but that the Wall Street Journal allows him to publish it on their opinion pages.  Are they really trying to invite ridicule, and if so, isn’t this overkill?