Abolish the Federal Reserve?

Jason

Thanks to blast_flame for Digging this story:
Ron Paul wants to dismantle the FR.

Is there some inside joke of which I am unaware? Why does this guy seem to have so many grassroots supporters among Netizens? Isn't he batshit crazy? How can the Internets cheer for a guy who believes the gold standard is a viable idea in the 21st century?

Somebody explain this to me.

HMTKSteve

I think it is because many of the batshit netizens see the fall of American power as a good thing.

Rym

 
How can the Internets cheer for a guy who believes the gold standard is a viable idea in the 21st century?
People on the Internet who are displeased with the current system/status quo/machine/whatever seem to flock to and band together over ANY idea that they perceive as being the "real solution that the media/big brother/WTO/whatever is trying to silence."  They perceive the resistance from experts in the field as resistance from the secret shadow government Zionist Zurich Gnomes trying to keep them in line as part of the New World Order.
 
The formula for making one of these ideas "Internet popular" is fairly straightforward.

Come up with a broad and ill-defined problem that appeals to anyone already dissatisfied with the status quo.
Come up with a solution to said problem that, when oversimplified, sounds incredibly common-sense and obvious.
Claim that said idea is "put down by the man" and discredited to keep it from becoming too well known by the masses.
Dismiss the critical evaluations of said idea by experts as part of the conspiracy.
Get at least one moderately well-known yet marginally media-present person to back the idea.
Claim that this person's lack of media coverge is part of the conspiracy.
Profit.

These steps accomplish the following:

The problem being broad and vague, people can easily assign to it their own more specific problems, garnering mass appeal.
The idea is now compact and, in this simplified form, makes sense.  It can be transmitted among people easily like a meme, retaining only the barest core of the idea.  This core cannot be disproven without extensive argument, these arguments being much larger and more difficult to spread.
This creates buy-in.  The victim is now outraged that they were once fooled by the conspiracy.
This innoculates the victims against most of the rational arguments that could be made against the idea.
This removes or reduces the "kook factor" of the idea, making it more palatable to more moderate people.  "He believes it, and he's not crazy, so I'm not crazy either."  The more rational this person appears, the more powerful this effect is.
This cements the buy-in, driving the victim not only to believe, but to take action.  "Support that man!  Spread the Word!  Fuck the Media!  I can make a difference!"
The idea is now widespread, and the focus person from step 5 now has a grassroots movement behind him.

This was vastly simplfied, but I think you get the point.  "Propaganda and Persuasion 401" for the win.

Apreche

It's really quite simple really. There are a number of factors that when combined will create large support for the gold standard among netizens.

First of all, peoples on the nets tend to be rebellious. We're all about taking down the system and fighting the man. If our current economic system was a gold standard, then Digg would be in favor of the federal reserve.

Secondly, economics are complicated. Relatively few people fully and truly understand what it means to have a gold standard. Almost noone understand the historic, present, and future consequences of a federal reserve, a gold standard, or any other currency system. This is complicated stuff. I readily admit, I hardly understand it at all.

When you have people who don't understand something getting a simple and easy to digest explanation, they will eat it up. Ron Paul is making a case that our current money is worthless paper. It doesn't represent anything. If our money was backed by gold, then it would be worth something! I may not fully understand how the federal reserve or a gold standard work, but I know that this is an extreme oversimplification. It really takes some kind of person to think our economy is that simple. However, this explanation, if you ignore its vast oversimplification, makes sense. It makes you feel like you understand the economy, and it will register with even a logical person.

Third, people, like those in the Digg community, like the underdogs. Going in line with their rebellious nature, and their fight against the man, they want the person they see as furthest from "the man" to win. They also like many of Ron Paul's libertarian ideas, which I also like. So these people find themselves liking Ron Paul for a few reasons, and thus they end up buying his entire platform. Most people tend to purchase ideas in sets. That's why we have political parties, and we only have two. Even the idea of being socially liberal and economically conservative is too much for most people to handle. When you sell someone an inch, they are likely to take the mile.

As I said, I don't know much about economics, but I can tell you this. The vast majority of the people who do understand economics say that a gold standard is the stupidest idea ever, and without the Federal Reserve, we would presently be up shits creek. I'm inclined to believe them in the way that I'm inclined to believe Stephen Hawking when it comes to Physics or Richard Dawkins when it comes to Biology.

Jason

The gold standard is easy to understand. The problem with the gold standard is that it assumes there is a fixed amount of wealth available, and everyone has to fight to a percentage "slice" of the pie. In reality, wealth is like trees, where investment creates "seeds" that can be planted to create new wealth.

Here is a very intelligent article talking about the economic pressures induced by the gold standard.

Kiey

Ron means well (wanting to shrink the size of the national government,) but apparently he needs to sit down with an economist who can explain to him why he's a freakin idiot.

The Fed has finally gotten to the point that they can actually help the economy out, by helping it expand or forcing it to contract.

SK3L3T0R

G. Edward Griffin has defined the four kinds of money and his model serves well to illustrate how we got here and how we can reverse the process. The lawful, actual dollar, authorized by the Constitution and defined by Congress, is a specific form and amount of silver minted as a coin—a commodity. Griffin calls this and other forms of specie, commodity money—the first form of money. The second form is receipt money, such as notes "payable to bearer on demand." Receipt money remains as such, until more notes are printed and issued than there is commodity money to redeem them with. This creates a condition that is referred to as fractional money—only a fraction of the notes can be paid, even though they say "payable to bearer on demand." The fractional money scheme fraudulently creates wealth for the issuers, but can only continue until the note holders discover the trick, as happened in American history during March of 1933, when the people made a run on the banks. When demands for payment exceed the amount of commodity money that can fulfill the demand, the currency system must either collapse or be converted to a fiat money system—money of no intrinsic or redeemable value that exists as "money" by an official declaration. Fiat money, the fourth form of money, is the basis of the creditory system—it allows a virtually unlimited "right to issue credit-money."
http://www.proliberty.com/observer/20070314.htm