Should the Federal Government be given more and new powers to manipulate the economy?
    As a believer in less government, my first answer would be “NO.”  You have to figure that the federal government has enough power to mess things up; we don’t need to give them anymore.
    The Federal Reserve is part of the current problem.  Giving them more power and authority isn’t going to help things.  Reducing their influence on the economy would be a better option.  The Federal Reserve can manipulate the economy in many ways already.  If they can’t fix things with the power they have, what makes people think they can fix things with more power?
    The Federal Reserve does two things: it can reduce the rate at which it lends money and it can print more money.  Currently they are doing the wrong thing in both those areas.  For some reason, people think that the government can just keep printing money without backing it up.  That is contributing to the devaluation of the dollar around the world and the increase in inflation.  Pretty soon the dollar won’t be worth anything and the American public won’t be able to buy anything with their money.  That will not be a good situation.  You think things are expensive now, just wait.
    The other problem is the Federal Reserve keeps reducing interest rates at which it loans money to other banks.  They are trying to get people to borrow more money again in order to jump start the buying of houses, cars and other big ticket items.  Maybe the better plan would be to protect the value of the dollar and let nature take its course.  Yes, people are going to lose their homes, their savings, and other things but that happens when you make bad business decisions.   Instead of buying the house twice as big as they needed because the realtor told them they could sell it in two years for a huge profit, they should have stuck with the house they could afford even if the economy started to fail.
     Another bad thing about the Federal Reserve is they have too much influence.  The stock market is always waiting to see what the Federal Reserve is going to do with interest rates.  That shouldn’t be a major factor in the buying and selling of stocks.  Investing should be based on good economic sense not because the Federal Reserve is dropping interest rates.
    During this last mess, the Federal Reserve has decided on another bad policy – backing the debt of a publicly traded company. Bad CEO’s and other executives shouldn’t be allowed to destroy companies and then walk away from the problem and let the government bail out the company or the industry. 
    Why does the Federal Reserve think it needs to provide financing to JP Morgan in order to buy out the financial company Bear Stearns?  I say let JP Morgan deal with it. Again, if it isn’t a good business decision, why should the government take all the risk?  Why is my tax money being used to bail out someone else’s mistake?  If the assets of Bear Stearns dry up even more, then the Federal Reserve is out of the money, not JP Morgan.  That doesn’t make sense to me. Who are we saving?  Bad executives? Shareholders? If that is the case, then we shouldn’t be doing it.  People make bad investments all the time.  That is part of the risk in life.  The government doesn’t need to get involved.
    We had a different kind of financial crisis several years ago when Enron went under because its executives were greedy and either doing illegal transactions or questionable business practices.  All the politicians started jumping up and down screaming for reform.  All that came out if it was a bunch of laws and regulations and, guess what, we have another financial crisis and the politicians are trying to create new laws, regulations and oversight.  How come I have the feeling that we will have another financial crisis in another couple of years?
    How do we solve the problem? Separate government and business.  Everyone seems to think bigger government is going to solve all the problems.  That is the worst thing we can do. We need to put the power back into consumer’s hands.  Personal responsibility is what is needed, not bigger government.
    Don’t give the Federal Reserve any more authority; let the existing laws and common sense solve this problem.  Hopefully the consumers, lenders and investors who are getting burned due to the financial crises will not make the wrong choice again – remember the old rule?  If it is too good to be true, then it probably is.

Bill Weaver 

    With the Housing market crashing and the economy plummeting, our Secretary of Treasury has decided the government needs more control over the economy to prevent these sorts of things from happening again.  The best word to describe this plan to change financial oversight in our government is “ignit.”  Now, for those of you who haven’t been to any place more urban than downtown Rolla, “ignit” is an ignorant way to say the word ignorant.
            For a lovely parallel showing how ignit this plan is we’ll use the last sixty or so odd years of Middle Eastern diplomacy.  We’ll pretend the Middle east is a Badger on a leash, and our foreign diplomacy is a stick.  Each time that badger gets poked he’s gonna get more and more ornery, and eventually he’s gonna maul you. The government has had several responses to this dilemma. 
       The first one they tried to do is make it so we can torture people who may be Badgers so we can make certain they are Badgers.  Also, to keep promoting good faith in this and to keep our plans secret to the Badgers no one’s allowed to know anything about the Badgers or what we may be doing to them. 
    Another is to go to a place with no Badgers so we can steal oil to make the price go down (I’m still trying to figure this one out).  A favorite of mine is tracking non-Badgers so we can know where people who aren’t Badgers are.  Finally, and most effective of all, is to leave the border open so Mexicans and Badgers can come into the country allowing Mexicans to build the things we need to kill the Badgers.  
    What I’m trying to show here is whenever the government gets involved in anything they’ve screwed up, things get phenomenally worse.  The reason the economy is screwed up right now is all the games the government has been playing.  Games with the monetary system, games with credit, and games with trade.  
    The consensus on this plan is that it won’t be touched until we get a new president and a new congress making any speculation on this plan quite premature.  Not to mention, after this election we will likely see a great shift in the platform of both parties.  This makes it even hazier to predict who will be behind this bill.
    A plan from the Bush administration likely won’t be very popular come next year.  Bitterness over W. costing the Republicans the election and hatred for a man who went about being a stateist a little differently then the democrats wanted will kill this plan.  Either way, something much more horrible will be written to take its place.

Jonathan Taft 

    The federal reserve. Perhaps one of the most important government offices in existence. Let me restate that, one of the most prominent offices in existence. It is said by some experts that the Chairmanship of the Federal Reserve is the second most powerful person in the US (if they have the respect). Again, as always, I would like to inform my readers what exactly the Federal Reserve does. I believe the basics are always needed to form a rational opinion.
    The Federal Reserve System, usually Fed for short, controls the flow of money, credit, and makes loans to other banks. Their greatest and most prominent duty is to set the federal fund rate. This is the rate of interest with which banks lend each other money. Any change to this rate affects the economy immediately as investors and banks react to the change. Any actual long-term effects are debated by economists.
    What these rate changes are supposed to do is prevent inflation but not cause a recession. They make these changes based on several different factors on the economy in secret meetings. These rate changes were actually not publicly announced until 1994, so the immediate change was not as pronounced before that.
        Now to the real question, does the Fed do what it is supposed to do? Will giving more power help the situation at all? It depends on who you ask. For me, the big trouble I see is their ability to interpret what the economy is doing. Predicting the economy is like predicting the weather; some people may be more accurate than others, but nobody is right 100% of the time. The system is just too large!
    Former Chairmen like Alan Greenspan were able to keep the economy relatively stable by keeping a low rate of inflation for a number of years. The new guy, Ben Bernanke, is apparently quite smart when you read his biography, but he has been criticized that he has been too quick to raise or lower rates. Some have even gone as far as to blame him for the housing crisis.
    This leads me to the conclusion that the Fed is one of those departments that have a bit too much power. Which means it certainly doesn’t need any more power. So we really shouldn’t be giving it more power now should we? A lot of its power, however, is not given by the government, but the financial leaders of the United States. They instantly jump on any changes  that the Fed makes and don’t look for themselves if it is safe to jump.
    I believe Chairmen Bernanke and his committee do not give enough time for the economy to adjust to the changes. I also believe that the economy is becoming too large to manage in that way. I am not sure if there is a feasible way to manage an economy as large and diverse as the United States.
    So, giving the Federal Reserve more power will not help things. It will just mess the system up even more than it already is. Companies and people will begin to rely on the Federal Reserve to fix their mistakes for them and they won’t learn anything from this whole ordeal.  Giving the Federal Reserve anymore power than it already has is suicidal to the United States’ economy in the long term. This is just another quick fix in an election year that the people demand and the politicians are almost all too willing to give.
    As always you can contact me by sending an email to This email address is being protected from spam bots, you need Javascript enabled to view it with the subject line ‘Democratic Political Columnist.’ I’d love hearing from you.

Eleanor M. Wyatt