At first glance, abolishing the Federal Reserve and returning to the gold
standard seems a quaintly eccentric idea, but Texas congressman Paul presents
a plan to eliminate our country's central bank, and return to a private banking
system, that's both serious and plausible. The questionable aspects involve
Paul's predicted results: not only will ending the Fed eliminate inflation
(the government cannot print more money than it has gold reserves), but also
business booms and busts, wars, income inequality, trade imbalances and
the growth of government. Further, and perhaps most important, it would
"disempower the secretive cartel of powerful money managers who exercise
disproportionate influence over the conduct of public policy." Paul tends
to gloss over those periods in history, including the Panic of 1907, in which
private banking and the gold standard were law: "the bad reputation of
nineteenth century American banking... is largely the result of... propaganda
agitating for the creation of the Fed." With respect to "secretive cartels,"
Paul takes up the interesting question of whether J.P. Morgan is in fact
preferable to Ben Bernanke. An engaging response to big-government solutions
for the financial crisis, this knowledgeable and opinionated look at
U.S. economics, from a firebrand public servant, should provoke much thought.

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