The Last 200 Years: An Economic Comparison.

I came across these charts earlier today. They compare and contrast economic factors within the US between the eras of 1812-1912, and 1913-2013. The United States from 1812-1912 was much more freedom-oriented on an economic level, with a largely free-banking system and free market in currency up until 1913*. In 1913, then-President Woodrow Wilson rode the progressive wave of the era and passed the Federal Reserve Act, which turned American banking into a quasi-fascist system and established the Federal Reserve’s monopoly on currency.

*Note: After the Civil War, the banking and currency system became much less free, although it was still much freer than what existed post-1913. This began to cause problems in the economy, which Progressives such as Wilson came to blame on the free market as opposed to blaming the real culprit of government intervention distorting the economy.

Comparing growth between the two eras…

Tracking uncertainty…

Tracking inflation… My goodness.

Establishment economists maintain that the Federal Reserve was necessary to curb the evil inflationary tendencies of free banks, and to prevent the periodic “panics” of every few decades, when multiple banks would go bust all at once. Supposedly, the Federal Reserve and its monopoly on printing money would prevent banks from wrecking the economy with inflationary behavior, and protect depositors. As we can see, this is nonsense. Look at the last chart and tell me the Federal Reserve has curbed inflation. The Federal Reserve is about power and control. The Federal Reserve serves two purposes: to empower and protect the large Wall Street banks (“too big to fail”, anyone?), and to give politicians a subtle method of taxing the American public through inflation.

From the very beginning, the Federal Reserve was about one thing only: Large national Wall Street banks such as J.P. Morgan and Co. stomping out the smaller and viciously competitive regional banks. When the Federal Reserve Act was being put together in 1910 by a conference of national bankers on Jekyll Island, GA, the true purpose of the conference was infamously described as to discuss winning the banking community over to government control directly by the bankers for their own ends. Furthermore, the bankers were assured by pro-Federal Reserve politician Senator Nelson Aldrich that the Federal Reserve Act would “increase the power of the big national banks to compete with the rapidly growing state banks, (and) help bring the state banks under control.”

 

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