In case you have not seen this video going around on Facebook, Zaid Hamid appeared on DIN News a few days ago to give a lecture on central banking and economics. The lecture is almost as entertaining as the Zaid Hamid’s photos of himself in his costumes, but unlike those pictures, media appearances such as this are no laughing matter.
Let’s start at the beginning, shall we? Zaid Hamid, to the shock of his host, claims that ‘US government does not have money to pay salaries’. He is referring to the US government shutdown that lasted for two weeks and ended last Friday.
Actually, the US government never ran out of money. The issue was not a question of whether the US government had money but how to spend the money they do have. The opposition Republican politicians could not come to agreement with President Obama’s majority Democratic politicians about how to spend the money. Specifically, the Republicans did not want to allow money to be spent on President Obama’s new health care program.
Zaid Hamid then goes on to deliver a frightening lecture about how the US Federal Reserve is privately owned by a group of Jewish bankers who have the US government under their thumb because they are the ones who print US bank notes. Actually, the Federal Reserve is not ‘owned’ by a group of Jewish bankers. In fact, it is not ‘owned’ by anyone.
The Federal Reserve System fulfills its public mission as an independent entity within government. It is not “owned” by anyone and is not a private, profit-making institution.
As the nation’s central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.
However, the Federal Reserve is subject to oversight by the Congress, which often reviews the Federal Reserve’s activities and can alter its responsibilities by statute. Therefore, the Federal Reserve can be more accurately described as “independent within the government” rather than “independent of government.”
The 12 regional Federal Reserve Banks, which were established by the Congress as the operating arms of the nation’s central banking system, are organized similarly to private corporations–possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.
After giving viewers inaccurate information about who controls the US Federal Reserve, Zaid Hamid then proceeds to give a lecture on economics that is so fantastically silly that it is a wonder he can manage to buy a cup of chai without help.
According to Zaid Hamid, the US government’s expenditures exceed its revenue which is something that is ‘unsustainable’ and ‘unnatural’ and something a normal person would never do because they would immediately find themselves in overwhelming and eternal debt. I have met school children with a more sophisticated understanding of finance.
Businesses, for example, often take out very large loans to acquire new and improved equipment because having this equipment allows them to be more productive and efficient. By taking out a loan, the businesses don’t fail, they actually make more money.
Zaid Hamid says no civilization can live on loan, and yet this nonsense is disproven by not 200 years of American history, but thousands of years of global trade and economics. Before America was even existing, loans were helping to create winners and losers at the global scale for centuries. BBC aired a much more information and authentic explanation of the history of government debt written and narrated by British historian and Harvard University professor Niall Ferguson.
Unfortunately, I don’t have the time or energy to go through all the incorrect claims of Zaid Hamid, but let me give you one more example as a case in point: Zaid Hamid spends several minutes explaining that the American President John Kennedy was killed by this secret cabal of Jewish bankers because he issued Executive Order 11110 which allowed the US Secretary of the Treasury to issue silver certificates, which Zaid Hamid claims undermined the Federal Reserve’s power over the US Government (even though the Federal Reserve is part of the US government, as I explained at the beginning).
Here’s the problem: If President Kennedy was killed because of Executive Order 11110, wouldn’t you expect that the next President would rescind it? Only that didn’t happen. Actually, Kennedy’s order remained in place until President Ronald Reagan issued Executive Order 12608 in 1987 which revoked the language of Kennedy’s order – over 20 years and four presidents later.
I do want to thank Zaid Hamid for one thing, though, which is giving me reason to do some research on the US banking system which is how I found this very informative report by G. Thomas Woodward, an actual specialist in Macroeconomics, that refutes almost every single one of Zaid Hamid’s ridiculous talking points.
Zaid Hamid’s nonsensical ramblings affect more than just TV ratings, though. Just last month media reported that ‘the US and British governments are controlled by a “high cabal” of banking families who seek to manipulate each of us by putting microchips in our brains and who sponsor terrorist attacks in Pakistan’. What is more disturbing than the content is the source, which was not a bloviating talking head dressed in a phony Army costume, but Vice Chancellor Punjab University Mujahid Kamran.
All of this would be quite funny, actually I could not stop myself from laughing out loud as I watched Zaid Hamid’s comedic ranting, but the problem is that it is warping our ability to reason and so badly that supposedly educated people are being duped by this nonsense.
Zaid Hamid predicted that soon the Americans are going to wake up one day and find themselves homeless. Maybe this will happen some day. But only a few days after his prediction, it looks like it’s not going to happen because of a US government shutdown.
