End the Fed written by Ron Paul who is Congressman from Texas published in 2009 is a book about the inefficiencies and ineffectiveness of the Federal Reserve Bank (Fed) in the US. This essay is a chapter wise summary of the book.
Chapter 1, “Why You Should Care”, asserts that the Fed’s policies were the key to the economic recession of the US. The chapter asks the question “What is the Fed and what does it do?” Paul states that all popular references of Fed viz. Books, journals, websites, etc. will show how Fed has helped in stabilizing the economy and business cycle, control inflation, etc. However, clearly Paul disagrees to it. He states that he agrees to one point asserted by this popular information medium on Fed that Fed can make money almost out of thin air using its unique power to print money, use open market operations, or change reserve ratio to increase or decrease the supply of money into the economy. He argues that the US government intends to go back to the days of economic prosperity, which Paul believes is nothing but a mirage created by the Fed. He exemplifies it’s by the Fed’s stance of reducing the interest rate to near zero level and pumping in money in the economy without showing any solid step to solve the core issue. Thus, he explains why he has written this book – End the Fed. He intends to demonstrate the system of domination of the Fed and the reason for supporting its closure. Then he goes on to present a historical overview of how there has been political as well as social movement in the US to end the Fed and other notable figures like Nobel Laureate F.A. Hayek.
Paul begins chapter 2, “Origin of the Fed”, by showing that we see the composed and always in control picture of the Fed but are often unaware of what goes on inside it. This chapter describes the inside story. He states that the “public relation game” played by the chairman of the Fed shows that they are an essential part of our system. He explains the historic background of the power and centralization of the banking system historically. He puts forth arguments made by other economists like Jesús Huerta de Soto to demonstrate the historical support for his argument that instability is the problem of the operations of the central banking system. He goes on to state that the Keynesian concept of free-market banking system is nothing but an illusory concept to keep the customers happy. Thus, he claims that Fed has been established on the principles of public and private enterprise and has been given more freedom than he deserves.
Chapter 3 provides a personal history of Paul, which is titles “My Intellectual Influences”. Here he states the 1970s policy of Nixon to end gold reserve for dollar has been a great influence on him. Thus, Paul asserts the need to move towards a sound monetary system. This chapter provides the theoretical background of his personal belief and economic ideas. This chapter contains sections with non fictitious people and events, which has led to the formation of the present fiat money system.
In chapter 4, “Central Banks and War”, describes the close relationship between eh central bank and wars beginning from the Vietnam War. He shows that Fed has been instrumental in the execution of the war decisions taken by the US.
Chapter 5, “The Gold Commission”, describes how during the Carter administration Paul and a few others like him helped in organizing the Gold Commission. This was the case where they tried to present a case for commodity money vis-à -vis fiat money.
Chapter 6 titled “Conversation with Greenspan” is dedicated to the conversations with economist and previous Fed chairman Alan Greenspan. The chapter describes the Greenspan made a deal with the oil giants and the way it was a betrayal of the economic freedom of the Americans. Chapter 7, “Conversation with Bernanke”, where presents the ideas of another Fed chairman, Bernanke. Here he postulates that he was also behind the oil deals and was not willing to speak out where the US money went.
Chapter 8, “Congress’s interest in Monetary Policy” wherein the members of the state show complete ignorance about the paper money system and how they facilitate in expansion of the state. Thus Paul states” I’ve never heard a member express support for paper money on grounds that it facilitates the expansion of the state. Most don’t see the connection at all. They aren’t even curious about the topic.” (Paul 115)
Chapter 9 is titles as “The Current Mess”. As the title suggest the chapter describes the present economic situation of the US. Thus, he again goes back to his original idea that Fed created the mess US is in today. He believes that the expanding money supply to the economy was a creation of Fed’s policies, which are the main reasons for the present situation. Thus, the idea painted by Fed’s PR policies has been to make things cheap, which gave Americans a sense of false security.
Chapter 10, “Why End the Fed” presents Paul’s argument for ending the fed’s regime. He believes that the Fed should be “abolished” as he believes it is an impracticable and unethical organization whose policies are a way to tyrannical governance.
In the last four chapters “The Philosophical Case”, “the Constitutional Case”, and “The Libertarian Case” Paul presents the philosophical, constitutional, economic and the libertarian ideas, which grant support for his point of view.
He ends the book with chapter 15; “The Way Out” where he presents suggestions, which he feels, is the possible solution for the country to come out of this constant problem. It is in a chapter he presents the arguments why Fed should be closed and the most important of these he believes is the moral argument that the Fed is cheating the American tax payers and the benefit of which goes to a handful few.
Works Cited
Paul, Ron. End the Fed. New York: Grand Central Publishing, 2009.