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Hyperbole the Fatal Flaw of Corbett’s New Anti-Fed Documentary

By: Fergus Hodgson - @FergHodgson - Aug 20, 2014, 6:00 am
Where it all began: the Jekyll Island Club, home to the infamous meetings that led to the creation of the Federal Reserve System. (PanAm Post)
The Jekyll Island Club, home to the meetings that led to the creation of the Federal Reserve System. (PanAm Post)

EspañolThe pernicious, unaccountable nature of the Federal Reserve System is gradually seeping into the mainstream. In 2009, End the Fed by former US Representative Ron Paul (R-TX) made it onto the New York Times bestseller list, and the “End the Fed!” rallying cry has become familiar to many.

creature-from-jekyll-island
(Amazon.com)

However, with Ron Paul’s prominence fading (now out of office) and still no serious audit for the quasi-governmental institution, let alone its outright elimination, one wonders how the stream of heightened understanding can turn into an unstoppable wave. G. Edward Griffin and Murray Rothbard laid much of the historical groundwork with The Creature from Jekyll Island and The Origins of the Federal Reserve, respectively, but their laudable work has failed to captivate the wider public.

There remains a need for documentaries, books, and advocacy organizations with messages both accessible to the layman and resilient in the face of scrutiny from academics and policy specialists — along the lines of the Atlas Network’s Sound Money Project, the Independent Review, and the Mises Institute. Consequent awareness will pave the way for the adoption of viable, non-governmental alternatives, such as bitcoin and digital currencies delineated in gold.

Corbett to the Rescue?

With this reality at the forefront of my mind, I tuned in to James Corbett’s documentary, Century of Enslavement: The History of the Federal Reserve, released in early July 2014. One can listen to it in audio form, which is what I did as I drove to and visited where it all began: Jekyll Island, Georgia — after handing over a few Federal Reserve notes to gain entry.

Jekyll Island, a state park since 1947, remains a quiet holiday spot off the coast of Georgia. (PanAm Post)
Jekyll Island, a state park since 1947, remains a secluded holiday spot off the coast of Georgia. (PanAm Post)

Corbett is a podcaster and self-styled “open source intelligence” journalist, based in Japan and supported by audience donations. Once one gets past his distinct, techie voice, the painstaking depth of his research is the most striking feature of the film. He packs a lot of detail into the 90 minutes, and his website provides a 13,000-word transcript.

His website also offers brochures (see below), so people can easily spread the word, in addition to free video and audio downloads for offline storage. The lack of any user fees or paywalls affirms Corbett’s desire not only to inform, but to motivate people to bring about change.

The gauge by which one can assess Century of Enslavement, then, is (1) whether it will bring awareness to new demographics and (2) whether it will motivate the choir into activism.

Speaking as a member of the choir, number two is where the film has value to offer. We can easily get wrapped up in popular topics of the day, while the Fed’s problems fail to come up on the news radar — aside from gibberish about Open Market Operations. Corbett’s film will awaken sympathetic viewers from their stupor, as it reaffirms the urgency and all-encompassing nature of the problem.

At the outset, there is a telling clip of former Fed Chairman Alan Greenspan (1987-2006): “There is no other agency of government which can overrule actions that we take,” and his successor Bernanke echoes the need for “independence.” After all, the Fed is a cartel with a monopoly on the money supply in the United States and various other countries — “a well-organized gang of crooks,” in Corbett’s words.

In particular, Corbett goes after the Fed’s benign “history as told by the victors,” and includes the story of the secretive 1910 meeting on Jekyll Island, with a cameo from G. Edward Griffin. Then, alongside the Fed’s failure to stop business cycles, he presents the ramifications of its protected, beyond-crony status: how it promotes inordinate financial-industry influence over the US federal government, and the nation’s tendencies towards excess spending and war — not to mention the redistributive inflation tax on all people who carry US dollars.

The Big But

The presence of loose, doomsday language, however, is immediate, pervasive, and likely to put many people off, particularly those unaccustomed to Corbett’s brand of anti-establishment media. This is where Century of Enslavement falls short on the first criterion of appeal to new demographics.

Corbett’s own narration begins with the following: “All our lives, we’ve been told that economics is boring; it’s dull; it’s not worth the time it takes to understand it; and all our lives, we’ve been lied to” — followed by a jarring explosion that cuts to a crying baby.

When I hear such sweeping statements, which are sensationalist and simply untrue in many instances, I sense the presence of a sophist. The Fed’s story is compelling and can stand on its own, without such dramatic ploys. Newcomers are likely to be less forgiving and simply dismiss him as a conspiracy nut.

“War, poverty, revolution; they all hinge on economics,” he continues. “And economics all rests on one key concept: money.” Corbett has yet to get past his third minute, and he has already turned off many in the economics profession. As Lionel Robbins explained in 1932, scarcity is the underlying principle of economics: the “relationship between given ends and scarce means.”

We are fortunate to have many outstanding free-banking economists in our era, including Lawrence White and George Selgin, who both blog and engage with popular media — yet they do not feature at all. Instead, Corbett presents nonspecialists such as Michel Chossudovsky of the less-than-credible, anti-capitalist Center for Research on Globalization and Andrew Gavin Marshall of the brazenly Marxist, “working-class” Hampton Institute, both based in Canada.

Even worse, some of Corbett’s assertions exude condescension towards the wider public: “Not one person in a hundred,” he says, “could answer … basic questions about money.” With barely a few YouTube clips as evidence, Corbett then seeks to explain why US Americans are purportedly so ignorant of the Fed and monetary economics, and to assert that the ignorance is planned.

Had he looked for surveys on the matter, he would have found that 70 percent of US Americans support a public audit of the Fed, and 16 percent want it completely eliminated. In a 2010 Bloomberg poll, only 37 percent favored the Fed’s status quo.

Redeeming Qualities?

The challenge of a documentary on a topic as important and far reaching as the Fed is not an easy one, particularly given the potential to get lost in technical details and never-never land speculation. Although far more successful at generating attention, Aaron Russo’s America: Freedom to Fascism (2006) fell prey to a lack of precision, and The Money Masters (1996), at 3.5 hours, was only appealing to the diehards.

One saving grace and advantage that Century of Enslavement has over earlier films and presentations is timing. Corbett’s venture comes at a critical juncture: the tail end of the Great Recession and the budding of alternative currencies.

After detailing the colossal bailouts to the financial industry, Corbett gives the final 10-15 minutes to the next step, mediums of exchange that can make central banking obsolete. This is where the film shines and conveys optimism, that central banking is not a permanent, unshakable fixture; rather, there are profitable, practical alternatives available.

Corbett then poses the question to each of us: will the challenge “be answered by an informed, engaged, active population working together to create viable alternatives … or it will be answered by the same banking oligarchy that has been controlling the money supply … for generations”?

He intends for this film to contribute to the former, but whether it will drive more people away than it will motivate and educate hangs in the balance.

Fergus Hodgson Fergus Hodgson

Fergus Hodgson was the founding editor in chief of the PanAm Post, up until January 2016, and he now studies finance at Tulane University in Louisiana and Francisco Marroquín University in Guatemala. Originally from New Zealand, he has also lived in Argentina, Canada, Colombia, Ecuador, Ireland, and the United States. Follow @FergHodgson and his Facebook page.

The Myth of Underfunded Education in Puerto Rico

By: Frank Worley-Lopez - Aug 19, 2014, 5:33 pm

EspañolI remember sitting in a chemistry classroom in a government school in Puerto Rico in the 1980s, as the professor told me there wasn’t enough money to buy lab equipment. We would have to make drawings in our notebooks of lab equipment and pretend to conduct the experiments. When I asked him about it later, he alluded to the fact that Puerto Rico just didn’t get as much money as other US schools. I sat pondering this issue of unfairness as I looked out the screen-less windows of the classroom and swatted a mosquito in the midst of yet another Dengue Fever outbreak.… A couple of years later I attended a Defense Department School at Roosevelt Roads Naval Station (also in Puerto Rico), and not only did they have lab equipment, they had chemicals and safety stations. How unfair could the United States be? As I grew a bit older, I heard at one point that the Puerto Rico education budget was larger than the entire national budget for the Dominican Republic next door. I began to smell a rat. In fact, former Education Secretary Victor Fajardo served half of a 25-year prison sentence and was released in 2013 after pleading guilty to facilitating the extortion of millions of dollars for himself and his political party. But that was just a few million dollars. Why is it that teachers are paid so little in Puerto Rico? Why are classrooms still missing basic materials? Why are schools in such bad condition? Is it money? Let’s take a look. US governments at all levels currently spend about US$11,000 per year per student. That is a lot of money. Puerto Rico? About $11,000 per student per year. Wait, what? That can’t possibly be true, right? Puerto Rico, twice as poor as the poorest US state, spends nearly the exact same amount of money on education as the US average, and the commonwealth still can’t pay her teachers more than poverty-level wages? During the 2013-2014 school year, the Puerto Rico education budget was $3.6 billion — more than 12 percent of the island's total budget. This year, the island welcomed about 325,000 students (roughly 81 percent) out of a projected 400,000 anticipated enrollment. At 325,000 students, that works out to $11,000 per student, at the full 400,000, it works out to be about $9,000 per student. As a side note, 97 percent of principals and 95 percent of teachers reported for work on the first day. As of 2013, teachers in Puerto Rico made a base salary of just $18,000 dollars per year, or $1,750 per month. While the pay varies by state, the average teacher’s salary in the 50 states is about $56,000 per year. South Dakota pays just under $40,000 per year, while lowly Mississippi averages about $41,000. Governor Alejandro García Padilla has promised a pay raise for teachers, but he says a raise to $3,000 per month — which is what the unions are asking for — would cost the island about $1 billion per year. That's money the island just doesn’t have at the moment. For once, the governor is right, but teachers are leaving the island for greener pastures, just like other professionals who are sick of dealing with life in Puerto Rico and want not only better money, but a better life. So what could one do with the $3.6 billion budget to achieve a greater impact on schools, teachers, and students? Maybe the first thing we should ask is, where does all that money go in the first place? Or better still, how do "expensive" private schools rate on the scale of cost versus services delivered? Private schools in Puerto Rico tell a different story about how much things should cost. At the very high end is Ivy League college-prep Robinson School, whose website indicates that 11th and 12th grade students pay just shy of $12,000 per year in tuition and another couple thousand in fees, so let’s call it $14,000 per year. Tuition and fees at another college-prep school in the Palmas del Mar Resort community are less than $7,000 per year. Meanwhile in Ponce, the all English but small Washburn Academy charges a mere $3,000 per year per student, including fees and lunch! In other words, for the amount of money Puerto Rico spends on education, every student should be in a college-prep program, fluent in English and Spanish and ready to take on the world. Wherever the money is going, one thing is clear: mandatory government education has failed again. It has failed the teachers, the students, and the commonwealth. What would be wrong with privatizing the entire system? Would private interests really be such a bad alternative to the system we have right now? While government would retain some oversight and regulatory authority over taxpayer-funded schools, even if they were privately managed, there is no reason why the island could not raise the standards to require that students be fluent in two languages and be given college-preparatory classes — and still spend less money. We could even see better quality teachers get raises from the private institutions. We can do better; it’s time we start.

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