{"id":250740,"date":"2016-06-19T10:46:32","date_gmt":"2016-06-19T10:46:32","guid":{"rendered":"http:\/\/rinf.com\/alt-news\/newswire\/a-key-propaganda-tool-for-central-bank-liars\/"},"modified":"2016-06-19T10:46:32","modified_gmt":"2016-06-19T10:46:32","slug":"a-key-propaganda-tool-for-central-bank-liars","status":"publish","type":"post","link":"http:\/\/rinf.com\/alt-news\/newswire\/a-key-propaganda-tool-for-central-bank-liars\/","title":{"rendered":"A Key Propaganda Tool for Central Bank Liars"},"content":{"rendered":"
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Today the Bank of England announced<\/a> that it would follow the lead of the Federal Reserve<\/a> and maintain interest rates at .5%. The bank didn\u2019t stop there, however, warning voters that next week\u2019s Brexit referendum posed \u201cthe largest immediate risk facing UK financial markets, and possibly also global financial markets. \u201c Considering the\u00a0growing public support<\/a> for the UK\u2019s separation from the EU, the statement can be seen as a last ditch effort by the BoE to push back against the effort and the move has been strongly criticized by British politicians skeptical of the EU<\/a>.<\/p>\n

Of course, central bankers using their position of influence to try to the street the actions of both policy makers and voters is nothing unusual. (In fact, manipulation of public opinion has become an explicit policy tool<\/a> of central bankers in recent years.)<\/p>\n

In 2008, for example, it was an intense scare campaign lead personally Chairman Bernanke and Secretary Henry Paulson that helped finally push lawmakers to agree to the Wall Street bailout.<\/p>\n

In his book An Act of Congress<\/em>, Robert Kaiser detailed Bernanke\u2019s warnings to lawmakers:<\/p>\n

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Paulson understood the mission. His chief of staff, Jim Wilkinson, a veteran of the Bush White House staff, had laid it out to him as he left the Treasury for Capitol Hill: \u201cThis is only going to work if you scare the shit out of them.\u201d Paulson knew that Bernanke could do this best\u2026.<\/p>\n

Bernanke said that he had been studying the Great Depression for his entire adult life. \u201cIf we don\u2019t act in a very huge way, you can expect another Great Depression, and this is going to be worse,\u201d he said sternly. \u201cIt is a matter of days before there is a meltdown in the global financial system.\u201d And he warned, \u201cOur tools are not sufficient\u201d to deal with this crisis.<\/p>\n<\/blockquote>\n

Bernanke\u2019s warning had its intended effect:<\/p>\n

\n

If anyone at the table doubted Bernanke\u2019s unexpected conclusion that a second Great Depression could be imminent, he or she didn\u2019t say so that night. Who were they to question these two experts, who seemed so scared themselves? In such a situation, it is instinctive for members of Congress to defer to the executive\u2019s authority.<\/p>\n<\/blockquote>\n

Now if Congressman Ron Paul had been in the room, he might have reminded his fellow lawmakers that this was the same Bernanke that had spent years in denial of the housing bubble that he<\/a> and other Austrian economists<\/a> had warned about. Also largely ignored was that it was the Fed\u2019s inconsistent policy of bailing out AIG, and failing to do so with Lehman Brothers, that created greater uncertainty in the market. But Ben Bernanke had made it clear there was no time to debate Ben Bernanke\u2019s grasp of the economy.<\/p>\n

Of course, Bernanke was right that a failure to bail out Wall Street banks would have caused economic pain. It\u2019s likely that a number of large institutions would have gone bankrupt. But there\u2019s nothing unprecedented about the failure of large banks<\/a>, and the failures of such \u201ctoo big to fail\u201d firms would have brought with it less consolidation within the banking industry and served to have held irresponsible firms responsible for destructive lending policies. Instead, the Fed terrified politicians into adopting policies that have hampered economic growth<\/a>, while planting the seeds for a future financial crisis.<\/p>\n

Central bankers utilizing scare tactics to pressure politicians into agreeing with their desires over that of voters is hardly isolated to the United States.<\/p>\n

Earlier this month, Mario Draghi, head of the European Central Bank, has issued his own \u201cdire warnings<\/a>\u201d if the policy makers of members nations don\u2019t follow his policy advice. In the eyes of central planners like Draghi, the wishes of the people in the underlying countries cannot be allowed to get in the way of his policy vision for Europe.<\/p>\n

Of course, defenders of central bankers would argue that it is both natural and appropriate for politicians to listen to these financial experts. While it is true that it is important for policymakers to make informed decisions when it comes to matters of governance, it can be argued that no one is more responsible for the current weakness in the global economy than the unprecedented policies of people like Bernanke, Draghi, and Chairman Janet Yellen. But no matter how often these same actors are wrong, their opinion is still cherished by politicians star struck by their title.<\/p>\n

So no, central bankers should not be treated as wise oracles who\u2019s guidance is desperately needed. Instead, we should throw off the tyranny of the Ph.D.\u2019s<\/a> and embrace the decentralization<\/a> of power that is desperately needed to allow civilization to thrive.<\/p>\n

Brexit would be a great way to start.<\/p>\n

Note:<\/strong>\u00a0The views expressed on Mises.org<\/a> are not necessarily those of the\u00a0Mises\u00a0Institute.<\/p>\n

The Best of Tho Bishop<\/a><\/p>\n<\/p><\/div>\n

Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Today the Bank of England announced that it would follow the lead of the Federal Reserve and maintain interest rates at .5%. The bank didn\u2019t stop there, however, warning voters that next week\u2019s Brexit referendum posed \u201cthe largest immediate risk facing UK financial markets, and possibly also global financial markets. \u201c Considering the\u00a0growing public support […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[519],"tags":[],"class_list":{"0":"post-250740","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-newswire"},"_links":{"self":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/250740","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/comments?post=250740"}],"version-history":[{"count":0,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/250740\/revisions"}],"wp:attachment":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/media?parent=250740"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/categories?post=250740"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/tags?post=250740"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}