I’ve been a fan of Ron Paul since the last election. I had heard about his campaign on the Internet and checked out his first book (The Revolution) and found a lot to support on it. This book is an extension of one of the chapters in his previous book, as well as some of his campaign speeches. The title pretty much says it all, Paul would like to dismantle the Federal Reserve and insert a gold standard (or some other form of “hard” money) in place of it. While this is a fairly radical thesis, the book sets out to prove that it’s not so radical in the larger historical perspective; like all ideologies Paul meticulously traces his case through American financial history, showing the battles between “hard” and “fiat” currencies, cumulating in the unconstitutional creation of the Federal Reserve. He tries (I think successfully) to draw a parallel between some of the past Jeffersonian/Jacksonian arguments that were made against the Bank of the United States in the eighteenth and nineteenth centuries.
I think he effectively argues his case and brings up many disconcerting issues relating to the policies around the Federal Reserve. I’m not too familiar with economics or constitutional law, so at this present time, I would be unable to point out any massive inconstancies or just general complaints about his analysis. I will say that I think he too quickly brushes aside some of the concerns relating to having a gold standard. Mainly I think he indulges in a utopian fantasy to think people would accept some of the limits of revaluing our currency to a commodity. Just as the economy greatly suffered when Jackson destroyed his bank, similar things would happen if we dismantled the fed. Of course, in light of the present crisis, I’m sure many would say that it would be an acceptable cost for reinstating some economic “sanity”. But, it seems a tad bit unrealistic to me—people are simply used to deficit spending and are accustomed to government programs. A gold standard would severely limit these programs and their capacity to care for people. While people can make all the arguments they want, I don’t believe that the population in general would accept this.
However, that being said, Ron Paul makes many strong points in his book about the Federal Reserve and its responsibility in the current financial crisis. I think the book is doing a public service in raising awareness to auditing the Fed and many of it’s “hidden” practices. I would highly recommend this to anyone interested in some of the current financial issues of the day- even if you do not have a strong background in economics.