Let’s Terminate the Federal Reserve
by JBS President Emeritus John F. McManus
The Federal Reserve came to life in 1913 through an act of Congress. At the time of its creation, U.S. paper currency (issued by the Treasury Department) stated that all paper money could be redeemed in precious metal. Over the course of several decades, issuance of currency shifted from the Treasury Department to the Federal Reserve and the promise to redeem paper currency for gold or silver disappeared.
The U.S. dollar, known widely to be “good as gold” when the Fed was born, was worth 100 cents. Today, it’s worth is less than two cents. Where that value went is something the American people have a right to know. But, today, the Fed’s history and its monetary manipulations aren’t well enough known to get answers to many questions about how it operates.
Mostly through the efforts of two men needed attention is being drawn to the Fed’s stranglehold over our nation’s monetary system. The two are G. Edward Griffin, who authored the blockbuster book The Creature From Jekyll Island and Ron Paul, the retired congressman from Texas. The Griffin book traces the history of the Fed from its conception at a secret meeting held at Jekyll Island, Georgia, to its gradual yet, largely hidden acquisition of power over our nation’s economic life.
While serving in Congress, Ron Paul sought for years to have Congress audit the organization. In its more than a century of operation, no such audit has ever been conducted. Though retired, Paul’s efforts to have fellow House members require such a sensible examination continue. And they seem poised to achieve some success.
But still there will be resistance to these credited efforts. Fed Chairman Janet Yellen doesn’t want the Fed audited. She claims a need to have it operate independently with no outside scrutiny. Former Treasury Secretary (1995-1999) and current co-chairman of the elitist Council on Foreign Relations, Robert Rubin also wants the Fed to remain independent. He maintains that politicization of the Fed would be harmful and the choices of those who lead it should not be changed.
A short column such as this one can only touch on the harm done by the Fed. But let us at least point to an article appearing in the January 1993 issue of National Geographic magazine. NG Assistant Editor Peter White visited the Fed and was told by one of its unnamed officials that whenever the Fed buys U.S. Treasury bills (IOUs), it does so with money that “didn’t exist before.” “We created it,” says the Fed official, while admitting freely that there is no limit on such a practice except “the good judgment” of Fed officials.
Fed transactions of this kind are carried out repeatedly. Each new creation of money acquires its value by watering down (stealing!) the worth of all existing money. That happens to be what inflation truly is. Whenever a counterfeiter “creates” money, he is chased and, when caught, suffers punishment for doing what the Fed repeatedly does. If you wonder why prices are rising for homes, autos, groceries, etc., an answer has just been supplied. The price you pay simply reflects the worth of the increasingly valueless money you use.
Right now, bills have been introduced in Congress calling for the Fed to be audited. In the House, H.R. 24 seeks such a goal. In the Senate, S. 16 does likewise. Even though it’s only a first step toward freeing America of the ravages of the Fed, it’s certainly time for such scrutiny.
If you are one of the many Americans who are suffering from the shrinking monetary value of your salary, savings, possessions, etc., contact your congressman and two senators and ask each to support the appropriate Federal Reserve Transparency Act. That’s the formal name for H.R. 24 in the House and S. 16 in the Senate.
Mr. McManus served in the U.S. Marine Corps in the late 1950s and joined the staff of The John Birch Society in August 1966. He has served various roles for the organization including Field Coordinator, Director of Public Affairs, and President. Mr. McManus has appeared on hundreds of radio and television programs and is also author of a number of educational DVDs and books. Now President Emeritus, he continues his involvement with the Society through public speaking and writing for this blog, the JBS Bulletin, and The New American.
Misrepresenting The John Birch Society
by JBS President John F. McManus
The organization known as Convention of States (COS) wants a constitutional convention although its advocates claim that they want only a limited Convention of the States. Altering the terminology used for a constitutional convention, however, does not alter what is being sought by COS advocates. And the claim by COS or anyone that a constitutional convention can be limited to a single amendment, or to several named amendments, cannot be supported. Article V says that a convention may be called by the states “for proposing Amendments.” No number is given. Once a convention is underway, the number of amendments it produces can be limitless, and the current ratification method by the states could be altered or even abolished.
In addition, a recent COS release entitled “John Birch Society Denies Its History and Betrays Its Mission” accuses the Society of reversing the stands taken by JBS Founder Robert Welch and former Chairman Larry McDonald relative to The Liberty Amendment. It also claims that current John Birch Society President John McManus (this writer) has misrepresented Founder Robert Welch and former Congressman Larry McDonald. This is completely erroneous and irresponsible.
In August 1963, Robert Welch urged JBS members to ask legislators in Alabama to approve a resolution favoring the Liberty Amendment. In his urging, Robert Welch made no mention of the Constitution’s second method for gaining amendments, the constitutional convention. He favored the first choice mentioned in Article V which seeks two-thirds approval of both Houses of Congress before a measure is sent to the States where ratification by three-quarters would be needed to complete the process. This method for adding an amendment to the U.S. Constitution happens to be the only method ever employed. For over 200 years, fear of a runaway convention (as occurred in 1787 during deliberations at a convention called to repair the Articles) has kept the amendment process strictly through the first method.
Similarly, Congressman Larry McDonald favored adding the Liberty Amendment to the Constitution. On October 9, 1973, his interview about the matter was published in the Congressional Record. In it, he mentioned that the Amendment was being “advanced in both ways” but he never advocated the convention route. As a member of Congress, he introduced the resolution containing the Liberty Amendment for passage by Congress in the traditional manner. He mentioned but did not favor the existence of the amendment route that would involve a constitutional convention.
Several years before he was slain in 1983, Larry McDonald wrote the 1976 book entitled We Hold These Truths. In it, Larry McDonald capably noted the two routes spelled out in the Constitution for adding amendments. How could he or any constitutional scholar (McDonald was indeed such a scholar) fail to note the existence of these two procedures? But, in the portion of his book discussing amendments, Congressman McDonald expressed explicit choice for neither. To claim that he favored one or the other when he was simply noting both is a complete misrepresentation of what he wrote. The COS release has engaged in misrepresentation, not The John Birch Society.
The COS release notes that, in 1983, Congressman Ron Paul joined with Congressman McDonald in introducing the Liberty Amendment in the House of Representatives. The two men obviously favored the route calling for the amendment to be passed by Congress. They had already introduced the resolution calling for Congress to pass the amendment several times. On no occasion did they express any favor toward the route of a constitutional convention.
On April 30, 2009, Congressman Paul and two co-sponsors again proposed that Congress pass the Liberty Amendment. There is no mention of the constitutional convention route to amend the Constitution in that move.
It is true that state resolutions calling for the Liberty Amendment mentioned the constitutional convention route. And it is equally true that Liberty Amendment author Willis Stone counseled state legislators to call for a constitutional convention on behalf of the Liberty Amendment. But during my own very friendly relationship with Willis Stone, the Liberty Amendment author clearly bared the strategy he was employing. Fearing that such a convention might actually occur if sufficient number of states (34) made the convention call, I asked him point blank, “Do you actually want a constitutional convention?” His very prompt and forceful response to me was, “No, I don’t worry about that because no one would be stupid enough to want a Con-Con.” He was relying on fears of many – including members of Congress – that the existing Constitution would be in jeopardy similar to what befell the Articles of Confederation in 1787. He further explained that if his work among the various state legislatures succeeded in getting close to the number 34 (the number that would trigger a convention), members of Congress would move quickly to pass approval of the measure themselves in order to keep a constitutional convention from becoming a reality.
In 1963, the Liberty Amendment Committee headed by Willis Stone published Action For Americans: The Liberty Amendment, a book promoting the Liberty Amendment. No book on this topic could be issued by the Liberty Amendment Committee without Willis Stone approving of every word. In their book, authors Lloyd G. Herbstreith and Gordon van B. King stated:
Some people have expressed fear of what a Convention might do. They point to the fact that the 1787 Convention was convened to amend the Articles of Confederation; however, it did not do this. It wrote an entirely new Constitution. A convention called now might similarly re-write the entire Document, instead of merely proposing an amendment….
As soon as twenty or more State Legislatures have approved the Liberty Amendment, Congress will approve it, and return it to the States for ratification.
There you have the opinion of the chief promoters of the Liberty Amendment, certainly including Willis Stone. What Mr. Stone told me of his plan is what these two authors, both friends and supporters of Mr. Stone and the Liberty Amendment, have confirmed.
1. Neither Larry McDonald nor Robert Welch ever favored the route of a constitutional convention for adding amendments to the Constitution. Both merely knew that the Constitution allowed such a method.
2. Larry McDonald’s book We Hold These Truths does not place him in the camp of those favoring a constitutional convention.
3. Willis Stone’s strategy is clear. He wanted to force Congress to act to pass the Liberty Amendment resolution in order to prevent creation of any constitutional convention.
4. The book by Herbstreith and King confirms the Stone strategy.
5. An apology for accusing The John Birch Society for denying its history and betraying its mission directed to me and to the memory of Robert Welch, Larry McDonald, and Willis Stone should be issued by COS. It would be received with gratitude.
Learn of other false accusations made by Con-Con supporters here.
A former U.S. Marine officer, Mr. McManus joined the staff of The John Birch Society in August 1966 and has served various roles for the organization including Field Coordinator, Director of Public Affairs, and now President. He remains the Society’s chief media representative throughout the nation and has appeared on hundreds of radio and television programs. Mr. McManus is also Publisher of The New American magazine and author of a number of educational DVDs and books.
What to Do About Government Economic Fraud
by JBS President John F. McManus
Paul Singer manages the hedge fund Elliott Management. He’s a billionaire and has helped those who invest with him to reap substantial gains. In a recent message he sent to the fund’s clients, he stated:
Nobody can predict how long government can get away with fake growth, fake money, fake jobs, fake financial stability, fake inflation numbers and fake income growth…. We do not think optimism is warranted, and we think a lot of the data is cooked or misleading.
Is Singer correct? The New York Times published a denial from Jesse Eisinger, a reporter for the independent new provider Pro Publica. Eisinger could hardly be more dismissive of the claims issued by Mr. Singer.
Who’s right and who’s wrong? We tend to side with Singer. We do so because of numerous phony claims issued by government. For instance, the unemployment rate claimed by officialdom doesn’t include people who have given up finding a job or others who were formerly employed full-time and are now able to find only part-time jobs. Counting part-time employment as real employment when the people involved want a steady job is deceitful. Real unemployment is likely twice the figure given by government.
In addition, government relies on a fraudulent definition of inflation – that it is rising prices. Even then, what’s in the “basket” of goods whose costs are totaled in the Consumer Price Index is regularly changed in order to reflect government’s reassuring claims. But inflation is an increase in the quantity of currency – the making of newly created dollars that have no backing and derive their value by lessening the value of everyone’s dollars. Ask a supermarket shopper whether it costs more dollars to shop each month and you’ll get a good lesson in what inflation truly is.
As for growth, U.S. manufacturing wealth creation is way down, and so is income growth. When the value of the dollar shrinks by an amount that even a raise in pay doesn’t cover, there’s no growth – except in the true rate of inflation.
In recent years, the Federal Reserve has waged war on the dollar with a program dubbed Quantitative Easing. That’s a clever name for a thieving process that creates dollars out of nothing and floods a favored few with them. But Q.E. is inflation pure and simple. It may have helped some “too big to fail” friends of the Fed to survive. But meanwhile, the American people continued to face higher prices, fewer jobs, and deceitful statistics.
So the conclusions reached by Paul Singer are worth consideration.
What to do about this? Start with an audit of the Fed, a demand recently made by 333 members of the U.S. House that awaits approval in the Senate. Unfortunately, the Senate will be led by Harry Reid until January when a new measure will have to be generated by the House and then sent to the Senate again. Maybe then, it will get the respect it deserves.
If the full truth about the Fed were known, public sentiment aimed at having it abolished would mushroom. Then, there would be moves to end deficit spending and cut back the size of government to what is authorized by the Constitution. Eliminating unconstitutional agencies and bureaus (education, energy, housing, medical care, foreign aid, and more) would be a boon to the nation. Also, Congress should put an end to creation of so-called “free trade” agreements that make it advantageous for businesses to flee the U.S. for cheap labor overseas. Finally, demand truth from government officials – all of them right up to and including the President.
The course our country is on amounts to suicide. Those who provide the fake data and the cooked books are steering America into a world government. Some honesty about that would help to bring about needed corrective actions and guarantee continued existence of our nation, free and independent.
Mr. McManus joined the staff of The John Birch Society in August 1966 and has served various roles for the organization including Field Coordinator, Director of Public Affairs, and now President. He remains the Society’s chief media representative throughout the nation and has appeared on hundreds of radio and television programs. Mr. McManus is also Publisher of The New American magazine and author of a number of educational DVDs and books.