The Federal Reserve, which has printed money in exchange for assets from the nation’s banks, has long operated opaquely. It is virtually impossible to size up its balance sheet.
So on its face, the [Ron] Paul amendment seems well intended. After all, who can argue with a little more sunlight?
But consider these words of caution from Senator Judd Gregg, Republican of New Hampshire: “Congress has demonstrated time and again its inability to manage the nation’s fiscal policy, illustrated by our staggering national debt in excess of $12 trillion. So how can anyone think that its involvement in monetary policy would be good for the country?”
So any unintended consequences of the amendment ”” what Senator Gregg calls “a dangerous move by this Congress to pander to the populist anger” ”” could indeed lead to less independence for the Federal Reserve, and the result ultimately may not be good for the economy.
Again, those firmly entrenched in the ‘status quo’ are against any move by the people who put them in power, to some form or call to accountability.
It’s also interesting that when their side protests, it’s voicing patriotism. When the other side protests (in greater numbers) it’s “pander(ing) to the populist anger”.
JE
I agree fully libraryjim. The backroom deals between the Fed and foreign governments may not be audited by anyone. Not even the CIA gets such secrecy.
Financial accountability and transparency does not equal partisanship, no matter how much Bernanke and his ilk want us to believe so.
I worked as a senior auditor for the Federal Reserve Bank, and I can assure you all that the Fed is audited with extreme rigor and detail. The head auditors of each Federal Reserve Bank don’t even report to the Presidents of each Bank. They report directly to the Bank’s Board of Directors. In addition, the Federal Reserve System has another set of auditors based in D.C. that do additional audits of the Banks and audits of each Bank’s Audit Department, as well as audits of the overall Federal Reserve System. All the departments I audited took their responsibilities very seriously and followed all the rules.
Why should we assume that the members of Congress, who will sell their votes to the highest bidder and pay for votes with reckless, defecit spending, can do a better job than what is being done by the Federal Reserve System. By all means, publish the results of all the audits already done and make the Fed as transparent as possible, but please don’t let the Congress get their greedy little hands on its operations, or the Fed will end up running like Congress. I, for one, think that eventuality will end badly.
Let’s give transparency a try. I couldn’t hurt. The truth is that the fat cats are probably getting this information already, it’s just the average taxpayer who doesn’t have it. And just because Congress can’t be trusted doesn’t mean transparency is not a good idea. If Congress is bad at fiscal policy it could very well be because voters don’t hold them accountable because they’re unaware of the extent of their skullduggery. I say more sunshine in Congress, too.
#3. The Fed is literally owned by large private banks. It does the will of these banks. Witness the Goldman Sachs and other large banks debacle. Abolish the Fed!