Gary North

Feb. 11, 2011

Ben Bernanke has always been given a free ride, as have all previous Federal Reserve Chairmen.

The last time that the Republicans controlled the House of Representatives, it was in the middle of the financial crisis in late 2008. Then the dominant player was ex-Goldman Sachs CEO Hank Paulson. Bernanke was close to invisible.

The Democrats took over the House in 2007. Barney Frank protected the FED from Ron Paul's call to audit the FED, even though it received a majority of the House as co-sponsors.

Now Ron Paul is the chairman of the House subcommittee on monetary policy. Not since 1975, the year before Paul was elected, has there been any committee chairman as hostile to the FED. Then, Wright Patman, the populist, was chairman of the banking committee. He was overthrown in a coup by House Democrats. Henry Reuss, a pro-FED member, was made chairman.

Now it's Paul's turn. Or maybe not. The question is this: Will Bernanke show up at any hearing? If the House refuses to compel him to appear, he may escape a direct confrontation. Can he do this for two or more years?

Then there is Paul Ryan, a critic of the FED, but not as outspoken as Ron Paul. He is chairman of the Budget Committee. He opposes QE 2.

Lew Rockwell explained in advance what happened on January 9. (Rockwell was Paul's Administrative Assistant in the early 1980s.)

The historic first hearing of Chairman Ron Paul's monetary committee, to expose the Federal Reserve as the prime creator of unemployment and so much human suffering, will take place at: 10:00AM on Wednesday, February 9, 2011, in Room 2128 of the Rayburn House Office Building, which is the main hearing room of the Financial Services Committee. Rayburn is across the street from the US Capitol at Independence Ave. and South Capitol St., Washington, DC 20003. The witnesses include the eloquent Austro-free-market stars Thomas DiLorenzo of Loyola University Maryland and Richard Vedder of Ohio University. This great event is open to the public.

The Fed itself, and at least three big banks, lobbied against Ron's chairmanship. Republicans who share their fear of the truth worked with Paul Ryan, chairman of the "Budget" Committee, to schedule hearings with Bernanke at the exact same time as Ron's this Wednesday, to try to diminish the significance of Ron's. Ryan, btw, is the fair-haired boy of the Republican leadership who gave the boring response to Obama's boring State of the Empire Sermon. Like the Republican leadership, Ryan talks about cutting spending, but that is only a ruse. He is a big-government neocon, and so naturally supported TARP, Bush's prescription drug welfare, his wars, and the empire in general.

I don't believe this insider trick will work against Ron, because his support comes not from the regime or the Republican leadership, but from the grassroots. I think the Paulians will pack Ron's hearings, and not only to show their support for him against the power elite. These hearings will have huge significance in the fight against the Fed, the fractional-reserve banksters, and other destroyers of our prosperity and freedom. It will also be a huge amount of fun!

Never before have two chairmen been this hostile to the FED during the same Congressional term. So, Bernanke is forced to deal with a soft-core critic. Before 2008, there were only Ron Paul and Senator Bunning.

Here is what we have seen so far.

He was not alone.

Bernanke is likely to face increasing hostility when the economy fails to produce jobs. He will not be able to explain this. Keynesianism says that the job market should be expanding. Instead, there are no more jobs today than there were in 1999.

When he testifies, he never mentions economic theory. He describes the past. He dwells on summaries of events that we all know about. He cites statistics that are public knowledge. But he never mentions economic causation. He never mentions banks that do not lend: why not, what the FED can do about it, and what to expect because of this refusal. It is the elephant in the living room.

Congressmen do not ask these questions. So, he avoids having to deal with them. If he can avoid Ron Paul, he will find it easier to get away with this.

My hope is that Ron Paul can schedule hearings from experts in FED policy. He asks them. Then he posts the videos.

Not to use YouTube to put pressure on Bernanke would be a mistake.