Insider Trading at the Fed, Thanks to Herr Lincoln

October 3, 2010

I very much appreciate Robert Wenzel of EconomicPolicyJournal.com for his post featuring this Special Report on how former Federal Reserve employees profited from their access to Fed secrets by providing the info to big Wall Street investors. To me, that’s like “insider trading,” but in this case the Fed is a government institution, so they’re taking inside secrets of an institution to which the general public doesn’t have access. And yes, the Federal Reserve is a public, government institution, regardless of the state-propagandists suggesting that it’s “private,” consisting of “private” banks, as Murray Rothbard pointed out:

It is little known, however, that there is a federal agency that tops the others in secrecy by a country mile. The Federal Reserve System is accountable to no one; it has no budget; it is subject to no audit; and no Congressional committee knows of, or can truly supervise, its operations. The Federal Reserve, virtually in total control of the nation’s vital monetary system, is accountable to nobody…

But it is one thing to say that private, or market, activities should be free of government control, and “independent of politics” in that sense. But these are government agencies and operations we are talking about, and to say that government should be “independent of politics” conveys very different implications. For government, unlike private industry on the market, is not accountable either to stockholders or consumers. Government can only be accountable to the public and to its representatives in the legislature; and if government becomes “independent of politics” it can only mean that that sphere of government becomes an absolute self-perpetuating oligarchy, accountable to no one and never subject to the public’s ability to change its personnel or to “throw the rascals out.” If no person or group, whether stockholders or voters, can displace a ruling elite, then such an elite becomes more suitable for a dictatorship than for an allegedly democratic country. And yet it is curious how many self-proclaimed champions of “democracy,” whether domestic or global, rush to defend the alleged ideal of the total independence of the Federal Reserve…

When you have a state-protected monopoly of money production (i.e. legalized counterfeiting), state-protected legal monopoly of control over the money supply, and a state-protected cartel of banks in which prospective competition is forbidden to enter into the business, the Fed is not only a government institution, but is literally a criminal racket. So that makes the secrets within that institution and the people who profit from that insider knowledge even more criminal.

So, this kind of “insider trading,” if you will, goes on in these years following the time when New York’s state-parasite Rudy Giuliani persecutes a totally innocent individual Michael Milken for doing nothing but making lots of money. America has become such a place of mass resentment toward someone who gets rich not by feeding at the public trough, which is what Rudy has done most of his adult life (along with Barney Frank, Dick Cheney and the rest of the political misfits of our time), but by honest interactions in the marketplace. Speaking of the former New York Mayor’s persecution of Milken when Rudy was U.S. Attorney, as Paul Craig Roberts noted,

Giuliani leaked to his media pimps that a 98-count indictment was coming down against Milken. As Milken had done nothing and Giuliani had no case against him, Giuliani’s strategy was to coerce Milken into a plea bargain. When Milken failed to send his attorneys to work out a plea arrangement, Giuliani used Laurie Cohen to report eighteen times in the Wall Street Journal that Milken would imminently face an expanded superseding indictment of between 160 and 300 counts.

To increase the pressure on Milken, prosecutors threatened to indict Milken’s younger brother, Lowell, unless Milken made a plea deal. US Attorney General Dick Thornburgh quipped to his deputies: “A brother for a brother.” Afterwards, Giuliani’s assistant US attorney, John Carroll, told Seton Hall Law School students in April 1992 that Lowell Milken was a “sort of ready chip in the negotiations.” Giuliani even went so far as to send FBI agents to hound Milken’s 92-year old grandfather.

Thank God Giuliani didn’t get that Republican presidential nomination. Yech! He is just another disgusting example of the Left’s envy and resentment toward the rich. Michael Milken clarifies several myths on his website, including the myth that he was ever involved in insider trading. He wasn’t. Rudy just made it up, to pursue his own career in siphoning taxpayer dollars and at the same time persecute people who had honestly achieved more in life than Rudy ever will (and I mean honestly: being mayor or president obviously isn’t included in the “honest” category).

And now we have the criminals at the Fed and formerly at the Fed and profiting from their insider knowledge, and the Wall Street criminals who profit from the Fed and from various other criminal-government institutions and policies. We can thank the chief fascist-mercantilist Honest Abe for much of this. Lincoln’s Legal Tender laws, which mandated that all Americans use the fiat paper currency issued by the U.S. government, preceded the Federal Reserve and “Federal Reserve Notes” by about 50 years. Lincoln’s National Bank Act created the bank cartel protected by the government. These fascist acts by Herr Lincoln unconstitutionally restricted Americans’ rights of trade and commerce, as well as property and association rights. We have a God-given right to open a bank and have customers deposit their money, and a right to deposit our money in any bank we want, whether it is “permitted” by the State or not, and it’s the same thing with currency.

The involvement of the State in money and banking has corrupted those activities, because the State itself is an institution with the power of compulsion over others which should never be allowed in a free society. That unchecked power is what paved the way for a Rudy Giuliani to persecute an innocent individual like Michael Milken, and paved the way for corrupt Fed cronies to get away with profiting from insider information at the expense of the American people. And it has also paved the way for a socialist Wall Street Bailout that further bankrupts America while providing the Wall Street parasites with big bonuses.

And Giuliani and his ilk are further reason why the State should not have a monopoly in law and justice.