The Perpetual Myths Surrounding the Federal Reserve: Debunking the Banker-Controlled United States

The myth of the United States being controlled by bankers has been pervasive for decades, but it is nothing more than a fallacy perpetuated by ignorance and misunderstanding of economic principles. In this article, we will dispel these misconceptions and explore the actual decoupling of monetary policy from political influence.

A Historical Perspective on Monetary Control in the US

The Federal Bank of Alexander Hamilton

The United States has a rich history with its central banking institutions. The first incarnation of the Federal Reserve was established in 1791 under the leadership of Alexander Hamilton. However, Andrew Jackson saw this as a form of federal control over the nation's currency. Consequently, he shut down the First Bank of the United States in 1811.

The Panic of 1895 and J.P. Morgan's Intervention

The US faced recurrent financial crises throughout the 1800s, with the Panic of 1895 being particularly devastating. With less than $20 billion in gold reserves, the economy teetered on the brink of collapse. J.P. Morgan orchestrated a consortium of other bankers to rescue the economy, but this intervention did not go unnoticed by the public. The public outcry against the role of bankers in running the economy soon led to a political and social backlash.

The Establishment of the Federal Reserve: A Democratic Response

With these experiences in mind, Woodrow Wilson signed the Federal Reserve Act in 1913. The creation of the Federal Reserve System aimed to stabilize the economy by pushing politics out of monetary policy. This system has since been the envy of the world for its independence from political influence.

Travis' Influence and Political Implications

President Trump attempted to influence the Federal Reserve, but even the Republican Majority Leader Mitch McConnell intervened, forcing Trump to withdraw his nominees from the Board of the Federal Reserve. This incident highlights the unwavering commitment to the Federal Reserve's independence.

Achievements of the Federal Reserve: Stabilizing the US Dollar and Promoting Full Employment

The Federal Reserve's success is evident in the stable purchasing power of the US dollar and low unemployment rates. These achievements are a testament to the effectiveness of its monetary policy, which is independent of political influence.

While the Federal Reserve plays a crucial role in stabilizing the economy, fiscal policy and government spending remain outside its scope. Politicians continue to face the challenges of balancing the national debt and managing fiscal policy, often at the expense of economic stability.

Challenges and Ensuring Independence

The resilience of the US economy can be attributed to the independence of the Federal Reserve in managing monetary policy. However, there are ongoing challenges and a need for better public education on the role of the Federal Reserve. Greater transparency and clear communication about the financial decisions and their implications is essential to ensure the public's trust and support.

Conclusion: Protecting the Independence of the Federal Reserve

The Federal Reserve's independence is vital for maintaining economic stability. Any attempt to undermine this independence would lead to the risk of politicizing money creation, potentially leading to the economic chaos seen in countries like Turkey, Zimbabwe, and Venezuela.

It is crucial for the public to understand that the Federal Reserve is not a puppet of bankers but an institution designed to serve the public interest by maintaining the stability of the US dollar and promoting economic growth.