Audit the Fed Already!


The Daily Beast

Before the House of Reps high-tailed it out of D.C., it passed a bill to audit the Federal Reserve System by a massive bipartisan vote of 333 to 92. Now the legislation goes to the Senate, where it will…be ignored until the next Congress starts in January and the process will begin again. Standing in the way? Senate Majority Leader Harry Reid, who called for just such legislation back in the 1990s. Not no more.

In the wake of the bombshell report from Pro Publica illustrating absolute capture of Fed regulators by Goldman Sachs, there's even more reason to truly open the books of the nation's central bank and figure out exactly what's on its balance sheet and how it operates (the fed does get a perfunctory annual audit that really doesn't amount to much).

You don't have to be a Bilderberger conspiracist or a lefty New World Order wingnut to believe more transparency is called for here. As I write at The Daily Beast,

The Fed as an inherently problematic institution. The central bank is explicitly tasked with the fundamentally incompatible duties of conducting stable monetary policy, promoting full employment, acting as a lender of last resort, and regulating the banks it works with. Good luck with all that. Also, while it's technically independent, the federal government exerts massive political pressure on the Fed and appoints its chair and board of governors….

The Fed's operational furtiveness—there's a reason why William Greider titled his 1989 history of the bank Secrets of the Temple—is hugely at odds with growing interest in transparency in all aspects of contemporary life. How is it that we can know more about the coffee beans we buy at the grocery store than how our money gets made?

Read the whole thing.