The U.S. economy continues to grow, but at a slower rate than in earlier 2018. From currency to emer...
The System Is Falling Apart
10/08/2012 10:15 am EST
Sometimes starting from scratch is better in the long run than patchwork renovations, and the US economic system is approaching the point where we need to start asking that question, says G. Edward Griffin in an interview with Louis James of Casey Research.
Louis James: I'm speaking with the author of The Creature from Jekyll Island. How can we get more into the politicized economy than that? So, can you update those who weren't here on what you said at the conference today?
G. Edward Griffin: The basic thing I was trying to accomplish is to take a look into the future, because most people, I guess, are concerned about the way things are changing in the economy. They know that the old rules that used to apply—the old ideas of American free enterprise and free markets—the rules have been changed. We are living in a different environment now.
People are wanting to know, "How does this affect me? And my retirement and my savings? And what kind of a world are my children going to live in?" This sort of thing. So my job was to try and project some of these trends that we find today into the future, and to see what's coming down the line.
It's not as hard to do as you might think, because if you want to project anything, you get a graph, and you see where we are now, where we came from, and you just draw a straight line between those two points, and you can see where we are headed.
My theme was that unless we make some major changes in the forces that are acting on the economy today, we are going to continue heading in exactly this same direction that we have been heading for the last 100 years. If you project that line into the future, you don't have to go another 100 years to realize that the end of the line is coming.
So that was my job, to bring the bad news and ask people to stop being in denial, to stop thinking, "Well, everything is going to turn out OK if we just leave it alone." We have to make some very important changes.
Louis James: Do you find in general that people are even able to comprehend that message? Let alone willing? Most people think, "Well, that can't happen here. That doesn't happen in America; this can't happen to us." When you say things like this, do people run away or disbelieve? And how do you get over that?
G. Edward Griffin: Well, some do. There is no question about that. But I find that a lot fewer do it now than when I first started to talk like this, which was when my book came out in 1998.
I had projected certain trends into the future—all of which have come true now. But that was years ago. People thought I was crazy to be talking about a banking crisis and the collapse of the purchasing power of the dollar and things like that. They would say, "What kind of a nut are you?"
Well, now we're living through it, aren't we? So it's easier to say, "Things are not going well, and we can see that in our lifetime."
To answer your question, most people today are open to a discussion. They may not like it, they may prefer that we change the topic and talk about who's going to win the election, or who's going to win the baseball game, or something like that. But more people are open to the realities of the economy than they used to be.
Louis James: That's interesting. Let's talk about those people whom you can even speak with. You started out by saying, "Unless we have serious changes, we are coming to the end of the line." But in a politicized situation, how realistic is the idea of any serious change?
How can any politician get elected promising the painful medicine that you and I both know needs to happen? Are you really saying that we are coming to the end of the line, no matter what, because the changes won't be embraced? Or are you an optimist, and if so, on what basis?
G. Edward Griffin: Well, I don't consider myself to be an optimist, nor a pessimist. I like to think of myself as a realist. And realistically speaking, I think what you just said is correct: the chances of there being a great awakening among the masses of the American people in time to avert some very serious consequences are small. But they are not zero.
See, that's the point. It depends to a large extent on how energetic and successful we are in getting this message out. It's not just, "Hey, look how bad things are." The rest of that message is, "Why are they that way? Who did that to us? Are they still in positions of power? Are they still doing the same thing to us?" And so forth.
If that message gets across, then the next message is, "It's time to make a change in who is in power—who we elect." And that means a challenge of the two-party system, really. That's hard to do. But I think now, more and more people are beginning to realize that the two-party system really is a cover for a one-party system.
Louis James: We, writ large—think of these two parties as sort of written in the bedrock of the universe. It seems like it has always been that way. But we started out with Whigs and Tories in this country, and things do change. You get to points where history happens: the Civil War happens, or other major events.
To focus the question, I can see things changing if we get to the end of the line, if the wheels come off the current system. People will get uncomfortable enough, they will be hungry enough, literally, to demand change.
But can it really happen before then—before Joe Sixpack turns the switch on the TV and it doesn't work because there is no power? Can we really get that sort of person to reconsider the realities that they have been ignoring all this time?
G. Edward Griffin: That's a good question. I wish I knew the answer to that. I'll go back to what I said a moment ago. It's unlikely, to tell you the truth. I think it is unlikely, but it's not impossible, and that's what I am counting on. Rather than just sitting there and doing nothing because it's unlikely, I've got to do something, right?
Louis James: Well, you wrote The Creature from Jekyll Island 14 years ago. Has there been a change in perception of the book? Is it being dismissed, "Well, you know, it was 18 years ago, it doesn't matter," or are people paying more attention to it now: "Gee, you were right"?
G. Edward Griffin: Yes, exactly what you said. When it first came out, it was sort of an academic little study, and there were some people interested who were already students and scholars in that field. But there was no great interest, because things were very good.|pagebreak|
The economy was bubbling along. There were no tent cities. Employment was high...all of these things. Of course, I could see that all of that was coming apart and that there was going to be a lot of fallout, but most people didn't see it yet.
Well, now it's underway—it's fully underway—and interest in the book has accelerated tremendously. We've come a long way. In the beginning we were pretty much ignored by the mainstream media. Now we get honorable mentions—even on the mainstream media that for the most part is opposed to what we are saying—but at least they mention us. Sometimes not kindly, but they mention us.
Louis James: Is there something in the book that you predicted, a turn of events that you can say, "Look, this really shows that what I said is true and deserves attention"? Because 14 years ago your book was seen as a sort of radical-libertarian, tinfoil-hat kind of thing.
It's like Einstein, when he first promulgated his ideas; it was very strange thinking in 1908, but then astronomers started seeing light bend. Some 30 years after the fact, his predictions started being observed. Is there something like that you can point to?
G. Edward Griffin: I think there is. I think that Einstein's E=Mc2 was the epicenter of all his theories. I think in our case, the epicenter was the realization that the Federal Reserve system is a cartel, and not an agency of the federal government.
That single fact alone is, when you think about it, so shocking to most people—or it should be, because we have been raised to think that it's the government, that they're looking after us. To think that it's no different than an oil cartel or a banana cartel—it simply happens to be a banking cartel, and we have given them the monopoly to create the money of the United States, and that they can create it out of nothing and charge interest on nothing—all these pieces start falling into place.
People realize that this is not in the best interest of the American people, was never designed to be from the get-go, and it has been a means of legalized plunder of the American people. That all stems from the realization that the Federal Reserve is a cartel and not a government agency. I think that's it.
Louis James: It occurs to me that maybe the "Occupy [Wall Street]" people might be interested. That anger that they tapped into and the reason that became a worldwide movement connects directly to what you are saying. On a gut level, a lot of people realize they've been set up. Things are not for the people's benefit. Are you finding that other people are listening now who weren't listening before, because of things like this?
G. Edward Griffin: Yes, I think that's it exactly. People realize that they are being had; they've been fooled and deceived over and over and over again.
But unfortunately, some of them—particularly in the Occupy movement—don't have the big picture yet. They resent the fact that there are some very wealthy people in the banking industry and the politicians who are living high, while the average guy on the street is not living well at all. And so they get out there and say, "This is capitalism; we must bring down capitalism."
They don't realize that what they're looking at is the difference between the haves and the have-nots, and that's not capitalism at all. They don't understand the fact that this is favoritism—this is socialism that we already have.
They're advocating more government control as though somehow our elected representatives are all saints. If we just had politicians running everything, everything would be fine, they think. They have a lot to learn yet. They keep calling for more of the same bad medicine that has brought us to this point.
Louis James: It's egregious for somebody to lose so much money and then get a government bailout and then get a bonus for that, but who gave them the bailout? The government.
G. Edward Griffin: We're back to the realization that the Fed is a cartel; but it's more than a cartel. It's a cartel in partnership with the federal government. We really have kind of a duopoly here. The bankers and the politicians have formed this partnership that works very well for both of them.
Louis James: The famous revolving door.
G. Edward Griffin: The revolving door. See, in order to create money out of nothing—which the Fed does—they need an act of Congress to authorize it.
So that's when their buddies in Congress say: "OK, we vote another trillion dollars to help the poor people of this country because we want them to have jobs, we want to give them work. We'll create a big employment machine, so we'll need another trillion dollars." But nobody asks, "Well, where does the money come from?"
The politicians raise their hands—they vote for the money. They don't have the money, of course, but they vote for the trillion dollars, because "we're gonna create jobs for people." And so they get elected; they're big heroes.
But people don't realize that then the Federal Reserve says, "OK, Congress has just demanded another trillion dollars. It doesn't have it, so we will create this trillion dollars, because that's our part of the partnership. And we will give it to the government to spend on jobs."
Where did the money come from? Well, that's a big mystery, isn't it? It comes out of thin air, which means it floods into the economy, and it pushes down the purchasing power of all the other dollars that are already out there—which means inflation. That's where it comes from.|pagebreak|
So all of the people who are supposedly being benefitted by jobs, or whatever, are paying for this thing out of one pocket. They pull $10 out of this pocket, and they get $1.50 back, and they think, "Oh, we've been saved by our great politicians and our bankers." That's the game.
Louis James: So what do you say to the people who say, "Well, if that's true, then how come we've seen, roughly, a tripling of the money supply since 2008, and prices haven't tripled?"
G. Edward Griffin: Good question. Prices have not tripled, that's true. But prices have gone up a lot more than most people think. If you just go look at the cost of groceries, you will realize that prices, real price increases, are much higher than what the government figures indicate. They fudge the numbers.
The other reason is that a lot of the money that's been created in this country has been snapped up by other countries around the world, because they want US dollars for their transactions. Believe it or not, their economies are even worse than ours.
You take a little country like Zimbabwe, for example. You've seen pictures of little kids with armloads of trillion-dollar notes; they are going out to buy a sandwich with all of that money. They cannot conduct a realistic financial transaction using Zimbabwean dollars. It's impossible, so any meaningful financial transactions have to be done in something else.
So far at least, the US dollar has been the reserve currency of the world. They want US dollars to do transactions. A huge quantity of this newly created money in America has been sent out to all these other countries.
Louis James: So we're exporting our inflation.
G. Edward Griffin: We're exporting our inflation, yes, exactly. And so those countries are suffering; they are paying terribly for that, though it's better than using their own native money because it's even worse.
That process has saved America for many years, but that's coming to an end now. More and more, other countries do not want US dollars, because they see that their value is going down, down, down. We are coming to the end of that game.
Another thing that we have to keep in mind is that a lot of this money being created is going into the coffers of the very wealthy. I won't say just the wealthy, because that makes it sound like it's the rich versus the poor. It's the politically favored class. They're wealthy not because they have produced something of value, not because they are in manufacturing or they provide some great service. It's because they've got political connections, and they have lobbyists.
G. Edward Griffin: [Laughs] Yes, that's it exactly. They have purchased their success through political power, through lobbying activity.
It's a terrible thing to realize, but it is the reality of our day that most of the big corporate successes that we see are able to achieve their profits, not through free-enterprise competition, but because they have purchased politicians who have voted for legislation which gives them an advantage. The consumer, once again, is the guy who winds up paying for all that.
The point I'm trying to make is that the system has changed. We used to live in a free-enterprise, competitive system. Now we are living in a politicized economy, and we're living in a world where the wealthiest people are not the producers who produce goods and services for the common man and raise his standard of living, but the ones that have political connections.
And that process—if it is not stopped, if it is not reversed—it's going to continue leading us in that direction until finally we reach the end of the line, which is totalitarianism. The free markets will be dead, and we will be living in a command economy based on the Soviet model or the Red China model. That's where we're headed.
Louis James: So you say there's some small chance we can change that. How do we do that? What possible—never mind politically realistic—but just what possible path is there?
G. Edward Griffin: I'm glad you said "Forget realism, let's think about possibilities," because major events in history have often gone against realistic odds. The American Revolution would be a shining example. There was no chance in the world that the American Revolution was going to be won against...
Louis James: A bunch of ragtag farmers against the world's most powerful military machine…
G. Edward Griffin: Yes, a bunch of ragtag armies—oh man, there was no chance. And [George] Washington had no funding. They didn't have ammunition for their rifles, guys didn't have clothes, they were freezing—and yet they won the war. So forget realistic. Let's think of possibilities.
I think the way this has to be turned around—and will be turned around—is that first there's the awakening stage. You and I are participating in that right now. Maybe somebody will see this video who might just become a dynamo and carry it to others. And through their efforts and our efforts and the efforts of millions of people we don't even know doing the same thing, we could break out of the mainstream-media confines and get this message out to huge numbers of people.
Louis James: Thank goodness for the Internet.
G. Edward Griffin: Thank goodness for the Internet. That's why the powers that be are trying their best to clamp down on the Internet right now. And they keep scaring us with, "Oh, we've got child pornography out there, we've got terrorism, we've got crime and so forth. We've got to control the Internet for you, to protect you and your children, right?"
And of course their real concern is that they don't want a free exchange of ideas, so they are using fear to generate support for their schemes. So yeah, thank God for the Internet for now. We have to fight to keep it free and open.
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