While seemingly progressive on its face, “End the Fed”—which
demands that the Federal Reserve System, the central bank of the United States,
be abolished—is no panacea. The forces bringing the slogan to the protests are
not progressive at all.
The Fed was created in 1913 in response to a series of
financial panics similar to that experienced in 2008 and 2009. Its duties are
to conduct U.S.
monetary policy, supervise and regulate banking institutions, maintain the
stability of the financial system, and provide financial services to depository
institutions, the U.S.
government and foreign official institutions.
In that capacity, it serves as lender of last resort to keep
crumbling banks afloat. It also tries to moderate the booms and busts of the
capitalist industrial cycle by manipulating the money supply and interest
rates.
Although the Fed ostensibly operates at the discretion of
Congress, it is unaccountable to any democratic oversight and instead directly
serves the interests of the 1%. It is only accountable to the ruling class and
major banks.
Demand falls short of
real problem
The “End the Fed” advocates, however, badly misplace the actual
role of the Federal Reserve and shift focus away from the true cause of the
ongoing economic crisis—the contradictions built into the capitalist system.
“End the Fed” activists want a return to a more stable form
of currency. (All U.S.
currency is now issued by the Fed, leaving aside credit—money created through
loans by private banks.) They believe that the abolition of the Fed would
magically free the U.S.
economy, and therefore the people of the United States, from the control of
shadowy, unaccountable bankers. This reflects conspiratorial views
traditionally associated with right wing and even fascist movements.
Make no mistake: The Federal Reserve is a crucial instrument
in the capitalist system. However, abolishing the Federal Reserve System alone
would accomplish little. The Fed serves Wall Street; the banker owners do not
serve the Fed. This was demonstrated by the multi-trillion dollar bailouts
provided to banking and insurance giants.
Simply abolishing the Fed without simultaneously destroying
the entire capitalist system would accomplish little. In this scenario, another
entity would quickly take its place, either with or without government
authority, and the same mechanisms of control over the value of money and the
issuance of credit would remain in unaccountable hands.
People who want to end the rule of the 1% over the 99%
should be wary of any isolated demand to “End the Fed.” To move toward a more
equal society, our central demands must focus on dismantling Wall Street and
ending its control of the country’s finances. We, the people, should control
the U.S.
economy and direct its financial decisions in the interests of the 99%.
