Opinion: On Banks and Foreign Policy, Ron Paul is Right

Ron Paul was no more likely to win the Republican presidential nomination this year than Ralph Nader was to win the presidency in 2000, but such candidates don’t run to win, they run to raise issues, and we should thank them for doing so.

Nader’s rants against the dominance of corporations and banks in our politico-economic system seem a lot more relevant in the wake of the 2008 crash than they did back in 2000. Paul’s arguments against foreign military involvement, indeed, against the stated desire of the United States to be the dominant military power on earth, should likewise be gaining traction as our entanglements in the Mideast threaten to lead us into multiple simultaneous wars.

Paul was mocked during the primary season for his proposal to close most U.S. military bases abroad, to stay out of all but defensive wars, and to significantly cut the size of the armed forces. But it is nothing short of alarming now to consider the prospect that, within no more than a few months after Election Day, we could be at war not only in Afghanistan, but also in Syria and Iran.

Until recently, the $1 billion U.S. intervention in Libya was touted by the Obama administration as a model of successful participation in the so-called Arab Spring. But with one U.S. ambassador murdered and virulent anti-American demonstrations resurgent throughout much of the Islamic world, that argument has lost its luster. Paul made a lot of sense, and echoed many Vietnam-era Democrats, when he argued that the U.S. can no longer afford to be the cops of the world.

We now face a situation in which leaders of both parties talk about the need to for “entitlement reform,” by which they mean cuts to Social Security and Medicare. At the same time, they are trying to find a way to avoid implementing the sequestration bill that is supposed to cut $500 billion from the Pentagon budget, beginning next year. So, the parties apparently agree that the nation cannot afford to care for the health and well being of its aging citizenry, but they vow to find enough money to fund war after war. And with Paul out of the presidential campaign, the main event now pits hawk against hawk.

Another of Paul’s signature issues, a call to thoroughly audit the Federal Reserve Bank, has been perennially dismissed as naive and dangerous. But more recently, only a few weeks after Paul’s formal exit from the race, no less respected a figure than Paul Volcker, a former Fed chairman and key advisor to President Obama, has publicly raised the question of whether the Fed has grown too powerful. In an interview with Reuters, Volcker said reforms such as the Dodd-Frank bill have left the Fed with significantly more power than it had before the crash. “Is too much being centered in the Federal Reserve now, should there be a different arrangement?” asked Volcker. “I'm not ready to take it (authority) away from the Federal Reserve entirely, but it deserves a look.''

Rather than write off Paul as a libertarian crackpot, defenders of the Fed’s supposed “independence” would do well to look back at reporting done by Bloomberg Markets magazine in January of this year. Here’s the lead: “The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing. The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates.”

Such stories make one wonder what else the Fed is hiding that regular, comprehensive audits might discover. We also have the Fed to thank for the fact that banks no longer pay any appreciable interest on savings accounts or CDs.

It’s a pity the mainstream media and the leadership of both big parties cast ideas such as Paul’s and Nader’s as having come from the lunatic fringe. True, some of Paul’s proposals, such as an end to income taxes, are extreme, and much of Nader’s reform agenda would have proven impractical. But both candidates raised important issues that should be seriously considered and fully debated, not dismissed as the rantings of deluded idealists. Unfortunately, neither Obama nor Mitt Romney has any interest in a reconsideration of American militarism or the unbridled power of the Fed.