Ron Paul: America Is Hurting While the Fed’s Cronies Enjoy Full Employment and Jackpot Bonuses

by Ron Paul

Unemployment continues to plague our economy. In spite of constant claims that we have just turned the corner into recovery, the jobs report remains grim with no real signs of improvement. While Keynesian economists and big government apologists scratch their heads about persistent unemployment in spite of unprecedented government so-called “investment” in the economy, free-market economists understand the problem perfectly well. In short, they understand that we are looking to the Federal Reserve to solve an unemployment crisis that the Fed itself largely created.

For example, the Fed is supposed to maintain full employment as half of its dual mandate. But the Fed simply has the wrong tools to do this. In fact, its credit expansion and manipulation of interest rates cause harm when they are applied to “help the economy.” As we saw with the housing boom and bust, Fed-created inflation cannot be sustained without harmful consequences. The Fed’s artificial boom led to the unemployment we’re suffering today.

The Fed is not a small business or a manufacturer that creates value or increases productivity to sustain real job growth. It literally destroys value by printing more money and distributing it through sweetheart deals to well-connected banks and corporations, including foreign banks. The only success the Fed has had in maintaining full employment has been on Wall Street, where it props up crony banks and investment houses to protect them from going bankrupt as they should. Instead they survive to malinvest another day while their executives enjoy jackpot bonuses.

The Fed also pumped up employment in the housing industry with artificially low interest rates that created an unsustainable demand for housing. Millions jumped into the sector when the money was loose and the bubble inflated. Besides the many who bought houses they could not afford and now face foreclosure, there were also those who became employed in housing-related fields. These people invested time and money in training and spent years establishing careers in real estate, mortgage lending, construction and contracting. Careers that all vanished into thin air with the burst of the bubble. Now they face considerable disruption in their lives as they struggle with unemployment, underemployment, and decisions about retraining for different careers. This amounts to a tremendous amount of unnecessary waste that would not have occurred had the housing industry be allowed to develop naturally according to market demands.

Jobs are properly created by entrepreneurs who are willing to work hard and take calculated risks. Jobs are also created through real increases in productivity, resulting from real investment profits or conservative borrowing at market interest rates. But the Fed has made those risks impossible to calculate and made borrowing money artificially cheap. As a result, economic growth has been chilled while unemployment skyrockets.

Until those in power understand the harm they do with central economic planning, we will continue to slide backwards and lose jobs. The Fed needs to stay out of the job-creating business altogether, and the federal government needs to focus on its constitutional duties. Just when we need government to back off, we hear about more government intervention in the economy in the form of “more spending”, only they call it “investment”. It is more properly called “malinvestment”, and the resources that are funnelled into industries by government policies will only hurt employment more in the long run.


  • rpierre777

    Unemployment skyrocketed because businesses looked at layoffs as the most cost-cutting tool available in order to maximize or not fall below project profits.

  • rpierre777

    Develop naturally through market demands????? Uh, the number of sales in real estate show how the demand was. Are you only addressing this from a business aspect?

  • rpierre777

    These bonuses which were funded by stimulus money are the same ones that your party refused to demand repayment of. So, which is worse: Given the money to the banks, or letting them keep it?

  • rpierre777

    Well, Ron, you cannot try to simplify the situation by blaming those who wanted to buy houses for the financial crisis. For, the crisis is more than the real estate market. Also, those who bought houses have no say so in what accounts are sold to other banks nor what rates their APR’s will increase to every year. It is the “market” that decides that. If you want to blame someone, blame those that control the market.

  • zg76

    “The only success the FED has had in maintaining full employment has been on Wall Street, where it prompts up crony banks and investment houses, to protect them from going bankrupt as they should..” couldn’t said it better.

  • KaptKan1

    Canadians hope that our southern neighbours will elect Dr Paul so that you can enjoy liberty and prosperity.
    Dr Paul is quite popular here; he may be the only politician in North American who is honest, pro-liberty, and anti-war.
    God bless Dr Paul and the American people.

  • aragornsargonath

    That’s impressive…..6,369 views and 0 dislikes.

  • somaticcinema

    Has Ron Paul seen Zeitgeist Moving Forward? I’d love to hear his thoughts on it.

  • BlackCatSaloon

    Excellent video. Remember the financial bailout that nearly every intelligent American was against? Well, when it passed, what you just witnessed is called a Financial Coup D’etat. . Our Democracy has been slowly eroding towards a full-blown Plutocracy. Sometimes I wonder if we haven’t already arrived.

  • kevinyankee2

    Go Ron!

  • youvefoundit

    Please run!! I’m beggin your from Poland :))

  • ed2point0

    Inflation is theft. So is taxation.

  • ncguy

    Ron and Rand Paul are the only two people in Washington I trust.

  • waynef20001

    Golly, what does it take to entice you to run! You are the real voice of America.

    How can we sue this private company? I’m a private company and I can get sewed.

  • waynef20001

    Golly, what does it take to entice you to run! You are the real voice of America.

    How can we sue this private company? I’m a private comapny and I can get sewed.

  • ASacredSpirit

    run for president!


    Thanks,God for dr. Paul,he is the voice of the working class…

  • taliskwackerman

    since Nov. you have many new followers…like me!
    you have my vote now.

  • dajwilkinson

    Pretty much like what we have in Britain: we face ever more taxes and spending cuts to fund failed banks, prestige London-based money-wasting spectacles like the Olympics and high-speed rail links, and Housing Benefit for those who are losing their jobs, most of the latter benefit ending up in the pockets of private landlords – including members of the Royal Family and the House of Commons. To reverse President Reagan’s terminology, UK and USA both have “trickle-up” economies now.

  • CrushingBastards

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