Conservatives and the Fed (A Tale of Enlightened Despotism)
One thing I find interesting about many conservatives is their advocacy for limited government, balanced budgets and the like coupled with their defense of the Federal Reserve and fiat currency. The inconsistency arises on many levels. The first is a political inconsistency. In most things conservatives seem to be in favor of freedom and representative government. But, when it comes to money, many of them seem to be in favor of the “enlightened despotism” of the Federal Reserve and its chairman. Though unelected (and I wouldn’t be in favor of one man having this much power even if he were elected), the chairman of the Federal Reserve has the power to create money out of thin air. He has the power to inflate (taxation without representation) and deflate the currency at will. He has the power to create fortunes and the power to wreak untold havoc on our economy and the economy of other nations. The second is economic inconsistency. Again, in most things, conservatives are in favor of a free market and voluntary exchange for mutual benefit. But, when it comes to money, many of the them are in favor of legal tender laws and a government monopoly on the issuance of a fiat currency (a triple whammy since only the government can create it, everyone must accept it, and the only thing that makes it valuable is the threat of force behind the legal tender laws). Eventually, of course, a fiat currency tends to its real intrinsic value, that of the paper that it is printed on (almost nothing). The third is Constitutional inconsistency. In most things, conservatives are in favor of fidelity to the plain language and original intent of the United States Constitution. But, when it comes to money, many of them go through the most entertaining rationalizations and logical gyrations to defend fiat currency (what part of “To coin Money” don’t they understand) and a central bank (nowhere in the Constitution is a central bank mentioned nor is it necessary and proper to the functioning of the federal government, regardless of the logical machinations of Chief Justice Marshall). Now, some will say that money is just too important to leave to the free market. On the contrary, money is just too important to leave to the government!!! Until a large number of conservatives check their premises and their understanding of the symbiotic nature of a central bank, fiat currency and a leviathan of a federal government, I fear that any progress toward a limited government will be rather. . . um . . . LIMITED!
(I suggest starting with the writings of Thomas Jefferson and Andrew Jackson regarding the destructive nature and threat to freedom that central banks pose. Ironic that each of them ended up on their own Federal Reserve Notes.)