Posted on 02/05/2015 11:43:29 AM PST by HomerBohn
The Federal Reserve is lashing out at Sen. Rand Paul’s plan to give Congress more oversight over the central bank, a proposal that could gain traction in the new Republican-led Congress.
The Kentucky Republican reintroduced his “Audit the Fed” legislation last month with 30 co-sponsors, including other potential 2016 GOP hopefuls, Sens. Ted Cruz (Texas) and Marco Rubio (Fla.).
The proposal — once championed by his father, former Rep. Ron Paul (R-Texas) —would subject the central bank to an audit by the Government Accountability Office (GAO).
Regional bank presidents from around the country are decrying the plan, which they argue could damage the economy.
“Who in their right mind would ask the Congress of the United States — who can’t cobble together a fiscal policy — to assume control of monetary policy?” Richard Fisher, president of the Federal Reserve Bank of Dallas, said during an interview with The Hill.
Fed Chairwoman Janet Yellen has already vowed to fight the legislation, and President Obama would likely veto it.
Still, Fed watchers note that Paul has become emboldened by the new Republican majority in Congress. And he possesses an ever louder national microphone, as he moves closer to a 2016 presidential run.
Together, those factors could elevate the issue in the coming months, a prospect that has spurred strong words from bank officials.
Philadelphia Fed President Charles Plosser told The Hill that financial auditing “already exists” for the Fed, and warned that Paul’s plan would empower Congress “to audit and question monetary policy decisions in real time.”
“This runs the risk of monetary policy decisions being based on short-term political considerations instead of the longer-term health of the economy,” Plosser said.
Paul pushed back against the criticism, saying Fed officials “will say and do anything to keep their business hidden from the American people.”
For Paul, the legislation allows him to burnish his Republican-libertarian credentials.
And he appears to want to make it part of his early presidential campaigning. On Friday, Paul will hold an Audit the Fed rally in Des Moines, Iowa, as part of a weekend trip to the early presidential caucus state.
The issue could give Paul an opening to tap into the public’s mistrust of the government, more than six years after the federal bailouts that followed the 2008 economic crisis.
“This secretive government-run bureaucracy promotes policies that have impacted the lives of all Americans,” Paul said. “Citizens have the right to know why the Fed’s policies have resulted in a stagnant economy and record numbers of people dropping out of the workforce.”
Fisher said lawmakers are looking to shift blame, having proven “unable to get together with their own colleagues on a working fiscal policy or construct a regulatory regime that incentivizes investment and job creation.”
“So they simply find it convenient to create a boogeyman out of an entity that does its job efficiently — the Federal Reserve,” Fisher said. “To some outsiders the Fed appears to be some kind of combination of Hogwarts, the Death Star, and Ebenezer Scrooge — especially to those who don’t take the time to read the copious amounts of reports and speeches and explanations we emit.”
The twelve presidents of the Fed’s regional banks are well connected, their boards of directors stacked with influential business leaders. They are likely to intensify their opposition to Paul’s proposal.
On Wednesday, Cleveland Fed President Loretta Mester criticized the legislation as “misguided” during public remarks in Columbus, Ohio.
“They really are about allowing political considerations to influence monetary policy decisions,” Mester said in her speech. “This would be a tremendous mistake, because it would ultimately lead to poorer economic performance.”
Yellen, who met with Senate Democrats last week on Capitol Hill, is scheduled to testify before Congress later this month. The appearance will be her first since Republicans seized control of the Senate, and she will likely face questions on the legislation.
Senate Banking Committee Chairman Richard Shelby (R-Ala.), whose panel has jurisdiction on the bill, has also said he is interested in holding hearings on the issue.
What we call money is actually fiat money - our dollars are debt instruments, not money. Thank you Woodrow Wilson for allowing the Federal Reserve to be our banker. The U.S. was wealthy in 1913, by 1933, thanks to the Fed, the U.S. was flat broke and it has only gotten worse since.
The Federal Reserve is the foundation, props and support for progressive, leftist, nanny-state government. It can NOT exist without the FED.
Imagine a country where money was backed by something politicians could not control, where interest rates were solely determined by the free-market, and where a central bank could not monetize debt?
Do you think for a second we would have ever got to $18 trillion in debt, Obamacare, or had Solyndra, government-supported abortions, and 1000 other leftist social-engineering schemes???
As if that hasn't been the M.O. of the Fed for at least a decade. The Fed is nothing more than the tool of the multi-national banking and financial cartel.
I have problems with Rand, but he is spot on on this issue!
Well, that’s not exactly true - money is what we agree is worth something. We agree those bills have value and can be exchanged for goods.
That said, the Fed does need to be audited...regularly.
Target. Anti-aircraft fire.
He might want to get food testers, stay out of bars alone at midnight and out of small aircraft. Just sayin’.
Why doesn’t the Central Bank want to be audited?
The Creature from Jekyll Island bites back!
Uh, the people who wrote the Constitution?
Something about the ability to coin money?
Amazing that a Fed Head would say this. Kinda like the employee telling off the boss in no uncertain terms.
We all know how that usually ends up.
Oh, and while auditing the Fed, might as well audit/inventory Fort Knox as well...
It’s going to get real interesting real quick if the constitutionally supported, rightfully elected Congress starts investigating these powerful, yet constitutionally questionable “agencies” of the Executive Office... ain’t it?
Ask JFK.
“This runs the risk of monetary policy decisions being based on short-term political considerations instead of the longer-term health of the economy,” Plosser said.
And They Aren’t ALLREADY?
The Congress shall have Power... To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;--Article I, Section 8, US Consititution
He might receive an anonymous delivered copy of the Zapruder video. This one from a different angle.
Correct, but after wards we still had our money backed by Silver, we still had lots of real money, I remember when ALL the Slots in Vegas had Real Dollars. It went from bad to worse when LBJ instituted his War on the Family Plan in 1964. In order to fund it, we stopped minting Silver Coin and eliminated any redemption of precious metal from ALL Silver Certificates in existence. I still have some. Within 7 short years the US was Officially Bankrupt and Nixon closed the Gold Window on the Brits and Italians as well as we Americans. It has steadily gone down hill since.
It will end, and it will end badly, time is short.
This is about an AUDIT of the Fed.
The fact that they are LYING about the proposal and objecting to the oversight, is a strong sign they are hiding something.
But the Fed creates money out of thin air because congress wants the money to spend.
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