Bob Schmetzer – 8/25/11

This page was last updated on August 25, 2011.

Audit of Fed overdue; Bob Schmetzer; Beaver County Times; August 25, 2011.

I critiqued 13 previous Schmetzer letters and they are usually broken records. A 2004 letter asserted Republicans were “driving Americans into the ground.” That letter claimed the GOP planned “to reflect their commitment to defend our homeland by reintroducing the draft in 2005” despite the fact Democrats were the only guys talking about reinstating the draft. Other letters resurrected the Cheney/Halliburton talking point, lobbied for VP Cheney’s impeachment, lobbied for surrender in Iraq, and blamed President Bush for a mine cave-in. Breaking the trend were letters lobbying for a government-run, taxpayer-funded healthcare system and another expressing panic at offshoring. One letter was nearly word-for-word plagiarism. More recent letters were entitled “Act on drilling before it’s too late,” “Health plan would level playing field,” and “The time to protect our water is now.” In one letter, Mr. Schmetzer tried to refute a letter to the editor I wrote. Mr. Schmetzer’s last letter was entitled “There are two sides to the drilling story.”

The BC Democrats website used to list Robert Schmetzer as the local town chair for South Heights, but that page no longer exists as of this writing. Mr. Schmetzer is also “vice-president of PA 4th CD Chapter of Progressive Democrats of America.” The PDA-PA4 website is Beaver County Reds. Why doesn’t the BCT mention these associations in an editor’s note when it publishes Mr. Schmetzer’s letters?

Below is a detailed critique of the subject letter.

“In a constitutional democracy, it seems prudent that transparency should be foremost in the minds of its citizens.

“Years ago, Congress privatized the money system. The Federal Reserve is not a government agency. The Fed has lent trillions of dollars from the U.S. Treasury.”

[RWC] “Years ago” was nearly 100 years ago in 1913. Democrats were the majority in both houses of Congress and President Woodrow Wilson was a Democrat/Progressive. Funny how Mr. Schmetzer – VP of the local chapter of PDA as noted above – didn’t include that info, isn’t it? In fairness, it appears the Federal Reserve Act passed with bipartisan support.

Congress didn’t “privatize the money system.” The Fed is a public/private hybrid entity. Members of the seven-member Fed Board of Governors are appointed by the President with consent of the Senate. Members serve 14-year terms. Again with the consent of the Senate, the President appoints the Board Chairman and two Vice Chairmen for terms of four years. Theoretically, the way the Fed is set up is supposed to minimize the effect of politics – especially the short-term variety – on Fed decisions/policies.

“Congressional hearings asked the inspector general, Treasury Secretary Timothy Geitner [sic] and Fed Chairman Ben Bernanke three questions: How much was lent, to whom did you lend our money and under what terms.

“No answers were given.

“Now, Congress wants to audit the Federal Reserve under HB 1207. This would be the first audit of the Fed ever.”

[RWC] Mr. Schmetzer is a bit out of date and mistaken. “HB 1207” was introduced in the last Congress (111th) by U.S. Rep. Ron Paul (R-TX) but nothing happened. In the current Congress, Mr. Paul and his son U.S. Senator Rand Paul (R-KY) reintroduced H.R. 1207 as H.R. 459 and S. 202.

In any case, the “audit” to which Mr. Schmetzer appears not to be what he believes it to be. The Fed’s “books” are audited on a regular basis. The auditing to which H.R. 459 and S. 202 refer is about how the Fed goes about making its decisions.

“The public wants to know just why our monetary system is not working for them. Why are interest rates for banks near zero percent, while these same institutions can charge more than 20 percent for credit cards?”

[RWC] While concern about the Fed is nice and probably warranted, the Fed didn’t get us where we are. The presidents, representatives, and senators we elected over the years did. With the exception of 11 years scattered about, we’ve been overspending, running deficits, and increasing our debt during the 66 years since World War II. The “straw that broke the camel’s back” was the subprime lending mess.

As for credit card interest, those rates have always been much higher mostly because the credit extended by the card issuer is unsecured. That is, what I borrow is not tied to a piece of property (car, house, etc.) the lender can repossess should I not repay what I borrowed. The high risk is why unsecured loans of any kind have relatively high interest rates.

“Americans have lost their livelihoods, homes, hospitalization, families, etc. They see top executives reap exorbitant salaries, bonuses, perks and job security. I think the audit will tell it all.”

[RWC] What does the Fed have to do with “top executives reap[ing] exorbitant salaries, bonuses, perks and job security?”