Auditing the Fed

Rep. Ron Paul (R-Texas) and Sen. Jim DeMint (R-S.C.) make the case for auditing the Federal Reserve in today's Wall Street Journal:

For nearly a century the Federal Reserve has operated in the shadows, away from the prying eyes of Congress, journalists and the American people. Created in 1913, the Fed was given enormous responsibility to protect the value of our currency. Yet in the last 96 years the U.S. dollar has lost more than 95% of its purchasing power. The Fed's unprecedented actions over the past year in attempting to stabilize the financial system have now forced it into the spotlight, and caused millions of people around the country to question the opacity of the Fed's financial transactions….

What is needed is a full audit of the Fed, something that has never happened. We need to know who the Fed is giving money to, what types of securities are being purchased and what backs those securities, how much money is being paid for those securities, etc….

As strong opponents of government intervention into the economy, we do not want to see Congress directly dictate monetary policy. But while the Fed is involved so heavily in monetary policy and its actions so heavily influence the future of our economy, it is necessary that it be fully transparent. Interventions into the economy on the order of trillions of dollars cannot continue to escape public scrutiny. American taxpayers deserve better.

Read the whole thing here. And then read Brian Doherty on how the movement to curtail the Fed went from fringe to mainstream.

Comments

[ChicagoTom]

Never gonna happen.

As much as it needs to happen and the Fed should be audited and more transparent -- it will never happen.

[Paul]

I agree. We'll legalize marijuana before the Fed gets audited...

[TrickyVic]

Never say never. But if it does it will probably resemble this http://www.securityinfowatch.c.....el/1286378

[Warren]

That ain't going anywhere. Wall Street is the prime beneficiary of the FED's purposeful destruction of the $USD.

[Paul]

No complaints from me. Well written missive from Paul and Demint

[Old Mexican]

The Paul-Grayson bill has just been voted on committee - it is now on its way to the whole floor, but fortunately, the modifications made by the SOB Mel Watt was voted down.

Congratulations to Rep Ron Paul and Grayson for this victory - now needed is a few more like this to win the war.

[Aresen]

Don't cheer yet.

Even if there is an audit, it will probably be done by former employees of Arthur Anderson who haven't been able to find work for the last few years.

[DJF]

Bernie Madoff's ex-accountants are available

[BakedPenguin]

Grayson's arguing for this does take away a big chunk of his overall douchiness, I admit.

Still, I'm glad I didn't vote in that election.

[John C. Randolph]

I propose a new term: "Melwatt", as a synonym for "Quisling", especially when referring to a legislator who's been bought.

Example: "Chris Dodd is a tax-sucking melwatt who isn't worth the paper his cut-rate mortgage is printed on."

-jcr

[BakedPenguin]

More good news - I just heard Geithner's getting his ass handed to him. Congresscrap are actually calling on him to resign.

[smartass sob]

Yeah, I think he's going to be looking for a job before long.

[BOB]

Practically all the major world currencies have declined over the course of the last century (or as long as they have been in existence). Even the Deutsche Mark and the Swiss Franc rolled relentlessly downhill, just more slowly. It's a sign of an advancing economy.

[Random Dude]

Andddddddd the award for most ignorant statement of the day goes to...... BOB!

When you have a fixed supply of currency and a increasing supply of goods, you get deflation as each currency unit purchases more.

Which, in fact, is what happened for the entire history prior to the Fed.

The inflationary exceptions in the deflationary pre-1913 trend were due to paper-backed government currencies to finance the war of 1812 and the Civil War.

DEFLATION is the sign of a growing economy.

[Random Dude]

I should also mention to my own post, that the 19th century saw ~4% averaged compounded real GDP growth over the course of its century to the 20th's 3%.

[Factory]

OTOH, it's not the Fed that came up with the idea of inflation targetting. Blaming the Fed because it's doing the job it was setup to do is stupid.
Better to argue that it's mission should be changed away from inflation tagetting.
(not that I necessarily agree with that)

[Random Dude]

I blame the Fed precisely because it's doing the job "it was supposed to do". That's my point.

I don't have this wall that separates between my opinion about the people who work at the Fed and my opinions on that institution.

Central banking is systemically flawed. Hence, the widely promulgated falsehood that inflation is due to economic growth.

The pressures that were originally in place to alter the Fed's mandate will always be present; I don't see how ending their full employment mandate will prevent it from being added again when the politicians need a bogeyman.

[Random Dude]

Also, BOB. Sorry for the insult--my first sentence was unwarranted and ridiculous.

My apologies.

[Ben Bernanke]

You can't handle the truth!

[Alan Greenspan]

Fuck you all. I bought gold ingots with fiat dollars, suckers!

[Paul Volcker]

Before you assholes fucked it up, people respected Fed chairmen.

[madmikefisk]

I think one of the bigger concerns right now with auditing the Fed at the present moment is that it seems intent on influencing its policies. That aside, the motive of increased transparency in the Federal Reserve isn't necessarily a bad one; a couple of Bernanke's old papers actually list positives of certain policy directions as additional transparency in the Fed.

At the very least, the Treasury Department needs to be thoroughly gone through with respect to TARP, and then try getting the Federal Reserve to open up some of their decision-making processes in a gradual, managed fashion where asymmetric information problems are resolved faster without the Fed becoming a de facto part of the partisan political process.

[briareus]

The Federal Reserve should be abolished.

[TrickyVic]

If their mission was to protect the value of the dollar, then there outright failure to do so should give plenty of ammo on why your right.