Do u agree w/ this statement by Ron Paul that Federal Reserve transparency thru audit is needed?
Posted Sunday, July 18, 2010 by admin
“Before the Committee on Financial Services, Humphrey Hawkins Hearing on Monetary Policy, U.S. House of Representatives, July 21, 2009
Mr. Chairman, at a time when we find ourselves once again receiving a report on the Federal Reserve’s conduct of monetary policy, it is more important than ever that we in the Congress push for more effective oversight and transparency of the Federal Reserve System. It would be unconscionable for this body, especially after the financial crisis of the last two years, not to take forceful and deliberate action to bring more transparency to the Fed.
A common misconception is that the Fed is completely independent of political pressure, and that any attempt to oversee or audit the Fed would jeopardize that independence. While the Fed has far too much authority to make agreements with foreign governments and central banks, or create temporary liquidity facilities, the governors and, more importantly, the chairman, are appointed by the President. The chairman is the dominant figure within the Board of Governors and the Federal Open Market Committee, the public face of the Fed, and he must be reappointed by the President every four years, with the advice and consent of the Senate. Thus, his job security as chairman is dependent on keeping the President and the Senate pleased. Every time the chairman acts, it is with the knowledge that within four years he will be forced to justify his actions to the President and the Senate.
Meetings of the Federal Open Market Committee, the committee responsible for conducting monetary policy and setting interest rates, are held in secret. Minutes are released after three weeks, and transcripts after five years. The ostensible reasons for this secrecy are that too much openness will either hamper the freedom of FOMC participants to discuss issues freely, or that markets will be unnerved. However, this is not really a condemnation of transparency, but rather a sign that far too much power has been given to one tiny organization.
We here in the Congress hold our committee hearings publicly, broadcast on C-SPAN and over the Internet. We are the most powerful branch of the government and our decisions have no less effect on the lives of everyday Americans than the decisions of the Fed. More importantly, our discussions have a direct impact on our ability to win re-election. Every word we speak can be used against us in our campaigns for re-election. It would be far easier for us to hold hearings in secret and release minutes and transcripts well after the fact. Yet we understand that the American people deserve to know not only what comes out of Congress, but also what goes on in the legislative process.
In the same way, it is vital that the American people understand what is going on inside the Fed. Attempts at enhanced transparency and auditing of the Fed’s auctions are not intended to dictate monetary policy to the Fed or second-guess the Fed’s actions. To my knowledge not a single legislative proposal put forward thus far has this as its intended goal. We as Congressmen have the ultimate responsibility for keeping the Fed in check, but how can we fulfill that duty if we do not know what the Fed is doing? Greater transparency is the first step, and only then can we begin to perform effective oversight. Given the Fed’s abysmal stewardship of the dollar and repeated fumbling of financial crises, we owe this to the American people.
The last… this is what he said.
Ron Paul is quite mentally unstable
Yes agree 100%
Yes! It is lunacy to have an Agency with the economic influence the FED has and NOT have constant audits with results made public. I have always said I do not want to be President, I want to be FED Chair.
I agree totally.
The Federal Reserve is out of control and clearly has to be stopped
I agree with the need to audit the Fed.
The question is, what institution would perform an honest audit of the Fed? The ex-Arthur Anderson liars? Or maybe the ex-Bear Stearns failures? Or maybe the aiders and abeters in the S.E.C.? Or finally what about the cheaters in Congress?
Even if Ron Paul gets his wish and the Fed is audited, it won’t matter because the auditor will be a political hack or banking employee and the auditor will not-too-surprising conclude that the Fed does everything right.
Kind of a sad state our country is in.
I agree with Ron Paul if your summary is really what he said – I can’t bear reading a long Ron Paul statement. But didn’t Obama say that too? What they say and what they do are almost always two different things.
I also agree with the person who said Ron Paul is mentally unstable. Libertarians need to find a quicker horse to ride!
You know I agree.
Mary W, it would be the comptroller general, who I believe is a head accountant for the government. I think that’s up there with inspector generals, who Obama is firing for being honest. I think if the comptroller general did the audit it might really be honest.
yes the fed has bn screwing us for years they seem to have misplaced a couple of billion while doing so, imagine that. Audit them and prosecute
“We here in the Congress hold our committee hearings publicly, broadcast on C-SPAN and over the Internet.
“We are the most powerful branch of the government and our decisions have no less effect on the lives of everyday Americans than the decisions of the Fed.
“More importantly, our discussions have a direct impact on our ability to win re-election.
“Every word we speak can be used against us in our campaigns for re-election.
–> “It would be far easier for us to hold hearings in secret and release minutes and transcripts well after the fact. Yet we understand that the American people deserve to know not only what comes out of Congress, but also what goes on in the legislative process.”