PhillyDeals: Ron Paul backers in Philadelphia call for end to Fed

It's spring, and the marchers are out, right and left, protesting Comcast and the Federal Reserve, taxes and the companies that pay them, or don't.

Four days before Ben S. Bernanke gave the first news conference by a Federal Reserve chairman to defend his cheap-money policy, more than 100 descended last weekend on the Federal Reserve Bank of Philadelphia to cheerfully demand that the nation's central-banking system shut down.

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Supporters of presidential candidate U.S. Rep. Ron Paul (R., Texas), libertarian- and tea party-backed author of the book End the Fed and current head of the House banking subcommittee for monetary policy, held their third yearly Philadelphia "Fedstock" festival, with live music, in hopes of making the arcane cause of private, competing, gold-backed currencies popular.

Fedstock organizers are small-business operators: James Babb runs an employers' help-wanted direct-mail and magazine advertising service. Rob Pepe has an industrial-filter manufacturing business in Montgomery County. Mike Salvi is a residential real estate agent. Darren Wolfe is a business-website salesman who moonlights as a chess instructor. Government may help wayward giants like Citi and GM; these guys say it just makes their lives hard.

The crowd filled out with senior citizens and Drexel and Temple students, reached through Facebook and other social-networking sites that preach, as Babb puts it, that "they'll be working their butts off to pay for today's government blunders."

The crowd applauded as Wolfe tossed a copy of the Communist Manifesto, blaming it for popularizing free public schools, government roads, central banking, "socialized medicine" and other projects that predate Karl Marx. He blamed the Fed, and the income tax, for enabling the government to fund murderous, costly wars such as in Afghanistan and Iraq: "Giving the state resources, by giving it control over our money, only feeds the war machine."

That's the Ron Paul message: You can't trust Americans to have an army and not use it; and you can't trust our central bank to control interest rates: The result is ruinous inflation and dollar devaluation and unpayable debt and a self-destroying out-of-control government. End the income tax, end the Fed, promote private currencies, let markets rule.

Never mind that debt, boom, and years-long busts were common before there was a Federal Reserve; or that the big difference between today's weak economy and those of 100 years ago is unemployment insurance and other government programs (which libertarian thinker Friedrich Hayek supported, so long as they are evenly administered, as he wrote in his popular book The Road to Serfdom).

"The Fed is the cause of the boom-and-bust cycle," Babb assured me. "We now have massive booms, devastating busts. The tech boom and bust. The real estate boom and bust. The final bust is going to be the government bust. What's going to happen to all the people dependent on the government when the money runs out?"

Tax those guys

State Rep. Phyllis Mundy (D., Luzerne) has introduced a longshot bill that would lower Pennsylvania's top corporate tax rate to 7.4 percent (from just under 10 percent) but that would also cost big companies more by making it tougher to use Delaware subsidiaries to legally shelter Pennsylvania profits from state taxes.

North Carolina, New Jersey, and Ohio, among others, "closed the Delaware loophole." But previous Pennsylvania bills under Gov. Ed Rendell died unpassed.

Mundy pitches her bill as a way to force "large corporations like Wal-Mart and Exxon Mobil," which are based out of state, to pay "their fair share of taxes to Pennsylvania."

But supporters allied with the Service Employees International Union took the fight last week to Comcast Corp., leafleting local offices of the video giant identified by authors of a similar bill last year as one of the biggest companies using Delaware to escape Pennsylvania tax.

The union often launches such corporate campaigns when it is organizing workers at a target company or its contractors. Staffer Matt Painter says his union isn't organizing Comcast workers; it's trying to show ways to boost state revenue and ease pressure on members of the union who are social workers, school cleaners, and other public employees. It wants higher taxes on gas drillers, too.


Contact columnist Joseph N. DiStefano at 215-854-5194 or JoeD@phillynews.com.