We have a local DJ who is a Ron Paul devotee who announced yesterday that the House was going to vote on a bill to audit the Federal Reserve. I find Dr. Paul’s ideas about economics, um, interesting and I question the wisdom of politicizing the Fed. Is this a good idea, a bad idea, a harmless way to get gold bugs to shut up or what?
Thanks,
Rob
Well, don’t you know he’s “crazy”? Which means, even though it’s a good idea, it’s still “crazy”. And you are crazy to listen to a DJ who is Ron Paul fanboy.
Everything’s fine with the Feds and with the banking system.
It’s running smoothly and very, very smart guys are running it so don’t bring no Ron Paul who - while the rare member of Congress who actually KNOWS what each of the Fed moves MEANS and can make informed questions - he’s crazy.
//** Ron Paul called a “hack” in next four posts.
It’s a pointless measure designed to reassert congressional control over the Federal Reserve, and most of the people behind it are the ones who don’t want a Federal Reserve - Mike “I stand by my statement and I misspoke” Coffman, Louie “take your pick of really stupid public statements” Gohmert, Dana “the Taliban will establish a disciplined, moral society” Rohrabacher, and Jason “inexplicably disgusted by the greater sage grouse” Chaffetz.
There are a couple of serious banking policy wonk sponsors, though, such as Spencer Bachus.
Thank you for that rambling preemptive strike.
Got anything to say about the bills that are the topic of this thread?
Is there an estimated cost for this bill?
Sure.
What one hopes is that a measure like this will lead to a more people understanding how Feds operate. Audit as a process, if this one relatively harmless goes through, should apply to the process of making any decision related to monetary policy.
You cannot have a tight control of monetary policy if Congress/Senate only exercise control over taxes while someone else handles money supply.
It would be like a married couple trying to run a household with a joint account and only one person has a credit line. Then, every time a credit line person draws, the other one says “you cant do that” and credit line person says “oh, please”. And the life goes on…
There are 271 co-sponsors, so unless 53 are “serious” sponsors we should see the House voting to “End the Fed” in the near future according to your expert analyses.
So if it passes, what exactly would this law do?
Huh?
That would be a point of debatable value, but it would not be pointless.
“and most of the people behind it are the ones who don’t want a Federal Reserve”.
If this was true, there would be popular support in the House to end the federal reserve, but there is not. There is popular support to audit the federal reserve, though. Your characterization of the supporters of the bill as “ones who don’t want a Federal Reserve”, is either misleading or factually incorrect.
Ron Paul is a hack.
Now that we have that out of the way, let me share what I have gathered on this topic, but I wouldn’t call myself an expert.
The Federal Reserve is currently required to produce annual reports that include an independent audit of of its financial statements. Furthermore, the Government Accountability Office conducts periodic reviews of the Fed.
As I understand it, the key area of disagreement is that the Fed is extremely reluctant to share detailed lending records that would show which banks were seeking help from the Fed. Proponents of the “audit the Fed” bill argue that the public has a right to know where any “bailouts” are going. The flip side of the argument is that the Fed makes aggregate numbers available (e.g., how much was loaned out in total) but that releasing specific information on specific banks would needlessly undermine investor confidence in those banks, as well as discourage banks from seeking assistance when they might need it the most. I believe the “audit the Fed” bill is specifically designed to require detailed disclosure of these activities to the Government Accountability Office.
There is also a debate on the degree to which Fed deliberations on monetary policy should be subject to disclosure. Right now, the discussions are largely kept out of public release for fear that the decisions on monetary policy would become politicized.
The Federal Reserve exercises control of our monetary policy by handling our money supply. Congress’s control over taxation effects our fiscal policy. Are you arguing one institution should control both monetary and fiscal policy?
The Constitution gives Congress the power to “regulate the value” of money.
Taxation is fiscal policy, not monetary policy.
Besides who do you think created the Federal Reserve to regular the value of our money?
(It was Congress)
Actually, I see terms like “goofball” or “loony” applied to him far more often; “hack” would be a step up. And googling “Ron Paul” + hack, most results are about Ron Paul supporters hacking websites, not Ron Paul being called a hack.
Market Committee meetings minutes are already released to the public, albeit several weeks after the actual meeting takes place.
In general, as you say, the Fed is already pretty transparent. Aside from the annual review by the CBO and the independent audit they also release weekly balance sheets.
I should have been clearer: I think that there is a concern that the minutes would turn into transcripts that are not delayed in release, identifying specific proposals and so on.
No.
I’m arguing that fiscal policy and monetary policy are complementary.
What’s the use of a fiscal policy when a monetary policy guys can do whatever they think should be done?