BY GREG ADOMAITIS There were a lot of angry white males — as well as a few angry white females and a ticked off kid or two — demonstrating on the west side of City Hall Sunday morning. About 200 gathered to demand an end to the Federal Reserve and the general disrespect the government has treated its citizens with recently. Rob Pepe, a primary organizer of the rally and member of the Montgomery County school board, has been at work in this realm of politics for 26 years. “I hope today creates more awareness about the criminal cabal that has manipulated our currency and made it a tool of the international elite.” Monopoly money, which may eventually have an edge on our own currency, was tossed around by the handful and blew among the half dozen “Don’t Tread on Me” flags. Keith Smith, a roofer from Downingtown whose house was recently foreclosed, drove 40 minutes to make his voice heard. “I want an audit, I want to know where my money’s going then I want the Fed abolished and replaced with nothing.” A police escort led the march east down Market to the Federal Reserve Bank of Philadelphia at 6th and Arch. Some drivers honked out their approval to the beat of the protesters chants. Congressional hopeful Jake Towne and six others spoke out front while the guards at the building gawked from the Fed’s front doors and roof. Joel Willis, a retired Master Sergeant in the Air Force who was called to active duty during Operation Desert Storm, attended last year just by chance. “I found an ad on the ground with the date and time and I didn’t approve of the Fed’s policies so I went and I’ve been doing research since.” He attributed his ownignorance to the conflicting information that mainstream news outlets feed the public. “The people aren’t stupid but they are sure naïve.”
RELATED: William Greider, author of “Secrets of the Temple: How the Federal Reserve Runs the Country”, knows more about the Fed than just about anyone alive, with the possible exception of those who worked there. And that’s only a possible exception. As such, his essay bemoaning the “antiquated” structure of the Fed and offering a proposal for reform should be taken pretty seriously. The key point, I’d say, comes near the top, when Greider takes aim at the Fed’s vaunted independence.
Representative Wright Patman, the Texas populist who was a scourge of central bankers, once described the Federal Reserve as “a pretty queer duck.” Congress created the Fed in 1913 with the presumption that it would be “independent” from the rest of government, aloof from regular politics and deliberately shielded from the hot breath of voters or the grasping appetites of private interests–with one powerful exception: the bankers.
The Fed was designed as a unique hybrid in which government would share its powers with the private banking industry. Bankers collaborate closely on Fed policy. Banks are the “shareholders” who ostensibly own the twelve regional Federal Reserve banks. Bankers sit on the boards of directors, proposing interest-rate changes for Fed governors in Washington to decide. Bankers also have a special advisory council that meets privately with governors to critique monetary policy and management of the economy. Sometimes, the Fed pretends to be a private organization. Other times, it admits to being part of the government.
The antiquated quality of this institution is reflected in the map of the Fed’s twelve regional banks. Five of them are located in the Midwest (better known today as the industrial Rust Belt). Missouri has two Federal Reserve banks (St. Louis and Kansas City), while the entire West Coast has only one (located in San Francisco, not Los Angeles or Seattle). Virginia has one; Florida does not. Among its functions, the Federal Reserve directly regulates the largest banks, but it also looks out for their well-being–providing regular liquidity loans for those caught short and bailing out endangered banks it deems “too big to fail.” Critics look askance at these peculiar arrangements and see “conspiracy.” But it’s not really secret. This duck was created by an act of Congress. The Fed’s favoritism toward bankers is embedded in its DNA. MORE