# What is this "Audit the Fed" stuff I have been hearing about? **URL:** \ **Category:** Great Debates\ **Created:** [July 24, 2012, 2:11pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235 "2012-07-24T14:11:25Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [July 24, 2012, 4:22pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/21 "2012-07-24T16:22:21Z")
> [@newcomer](#): > > What’s the use of a fiscal policy when a monetary policy guys can do whatever they think should be done? The “use” is to have monetary policy decisions decided by an entity that is not directly subject to the political whims of the Legislative and Executive branches of the government. ---
**Author:** ![sweeteviljesus](https://avatars.discourse-cdn.com/v4/letter/s/898d66/32.png) [@sweeteviljesus](https://boards.straightdope.com/u/sweeteviljesus)\ **Post date:** [July 24, 2012, 4:30pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/22 "2012-07-24T16:30:01Z")
Newcomer, what do you have to say to Ravenman’s post? Thanks, Rob ---
**Author:** ![newcomer](https://avatars.discourse-cdn.com/v4/letter/n/e5b9ba/32.png) [@newcomer](https://boards.straightdope.com/u/newcomer)\ **Post date:** [July 24, 2012, 4:45pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/23 "2012-07-24T16:45:40Z")
> [@msmith537](#): > > The “use” is to have monetary policy decisions decided by an entity that is not directly subject to the political whims of the Legislative and Executive branches of the government. Are you suggesting that, say, Feds creating Maiden Lane(s) is not a political decision? ---
**Author:** ![newcomer](https://avatars.discourse-cdn.com/v4/letter/n/e5b9ba/32.png) [@newcomer](https://boards.straightdope.com/u/newcomer)\ **Post date:** [July 24, 2012, 4:56pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/24 "2012-07-24T16:56:45Z")
> [@sweeteviljesus](#): > > Newcomer, what do you have to say to Ravenman’s post? > > Thanks, > Rob The post where he calls Ron Paul - the most knowledgeable member of Congress about fiscal and monetary matters and the only guy who asks Bernanke a meaningful question and then has a follow-up - “a hack”. To top it off, in the next sentence he states “I wouldn’t call myself an expert”? Let me rephrase that for you – “I have no idea or any clue about any of that and I cannot comprehend anything Ron Paul says but I can certainly say he is a hack because that’s what I gathered so far.” I don’t respond to that. I laugh at that. And likely, reverse is true. However, with that post the ship of Insignificance has left Port of Reason. What’s next? Ron Paul is wrong because he’s racist? ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [July 24, 2012, 4:58pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/25 "2012-07-24T16:58:10Z")
> [@Ravenman](#): > > Ron Paul is a hack. Well, at any rate, he is no economist. ---
**Author:** ![sweeteviljesus](https://avatars.discourse-cdn.com/v4/letter/s/898d66/32.png) [@sweeteviljesus](https://boards.straightdope.com/u/sweeteviljesus)\ **Post date:** [July 24, 2012, 4:58pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/26 "2012-07-24T16:58:54Z")
No, I meant respond to the part about the bill forcing the Fed to disclose which banks sought bailouts. (his 4th paragraph) Thanks, Rob ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [July 24, 2012, 4:59pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/27 "2012-07-24T16:59:50Z")
> [@Ravenman](#): > > 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. Wait, why is that “needless”? > [@Ravenman](#): > > 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. And why is **that** needless? ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [July 24, 2012, 5:20pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/28 "2012-07-24T17:20:35Z")
> [@newcomer](#): > > The post where he calls Ron Paul - the most knowledgeable member of Congress about fiscal and monetary matters and the only guy who asks Bernanke a meaningful question and then has a follow-up - “a hack”. To top it off, in the next sentence he states “I wouldn’t call myself an expert”? > > Let me rephrase that for you – “I have no idea or any clue about any of that and I cannot comprehend anything Ron Paul says but I can certainly say he is a hack because that’s what I gathered so far.” I’m a bad baseball player. I’m slow, my arm is okay, and I can switch hit, but I have no pop in my bat, I strike out a lot, and I’m bad at taking pitches. That doesn’t mean that I lack the ability to discern that [Mario Mendoza](http://en.wikipedia.org/wiki/Mendoza_Line) was a lousy baseball player. I may not be an expert on transparency at the Fed, but it doesn’t take someone with a pointy head to know that Paul’s position of putting the country back on the gold standard makes him a certifiable crank and therefore not worth taking seriously on any matter of economics. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [July 24, 2012, 5:33pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/29 "2012-07-24T17:33:37Z")
> [@BrainGlutton](#): > > Wait, why is that “needless”? Let’s say a bank is considering whether to seek assistance from the Fed to keep itself afloat. It’s a close call: maybe the help won’t be needed. In this case, making the bank’s name public could have an effect on whether or not the bank makes the phone call to the Fed. One could make an analogy with, say, a STD clinic: if the government required people to disclose their names before getting an HIV test, wouldn’t that discourage people from seeking help when they may need it? Honestly, I can see both sides of the argument. Right now, the system is biased toward stability of banks, at the expense of transparency. However, I’m not one who is generally inclined to think that total transparency is always prudent. > [@](#): > > And why is **that** needless? I didn’t say it was needless. But in some respects, the Fed has greater transparency than the Oval Office. You don’t see minutes coming out of the Situation Room on deliberations about the President’s new tax plans, for example. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [July 24, 2012, 6:26pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/30 "2012-07-24T18:26:47Z")
> [@newcomer](#): > > The post where he calls Ron Paul - the most knowledgeable member of Congress about fiscal and monetary matters and the only guy who asks Bernanke a meaningful question and then has a follow-up - “a hack”. To top it off, in the next sentence he states “I wouldn’t call myself an expert”? What do you base this claim on? Does Paul have any formal education in economics? Accounting? Business? Is he recognized as an expert by any academic of professional organization? What makes Paul “more knowledgeable” about “fiscal and monetary matters” than, say, Mo Brooks, Eric Cantor, Jim Jordan, John Campbell, or Jeb Hensarling, who all have actual degrees in economics? ---
**Author:** ![Linden\_Arden](https://avatars.discourse-cdn.com/v4/letter/l/53a042/32.png) [@Linden\_Arden](https://boards.straightdope.com/u/Linden_Arden)\ **Post date:** [July 24, 2012, 8:09pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/31 "2012-07-24T20:09:50Z")
The Fed has always been audited - currently by Deloitte and Touche. What Ron Paul means by an “audit” is for Congress to scrutinize Open Market Committee decisions - a TERRIBLE idea. Imagine Maxine Waters and Ron Paul debating Quantitative Easing or bank loans. Ron Paul and Waters are financial morons. Sadly, Alan Grayson joined in on this as some sort of populist move. Dodd-Frank contained a measure of transparency (also misnamed as an audit) that specified who emergency loans went to during the 2008 Credit Crisis. ---
**Author:** ![Deeg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/deeg/32/2955_2.png) [@Deeg](https://boards.straightdope.com/u/Deeg)\ **Post date:** [July 24, 2012, 8:14pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/32 "2012-07-24T20:14:34Z")
> [@newcomer](#): > > The post where he calls Ron Paul - the most knowledgeable member of Congress about fiscal and monetary matters and the only guy who asks Bernanke a meaningful question and then has a follow-up… I’m sorry, but anyone who thinks going back on the gold standard is either practical or a good idea is not the most knowledgeable member of Congress, even if the bar is low. He has also stated a belief in the Amero conspiracy nonsense. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [July 24, 2012, 8:48pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/33 "2012-07-24T20:48:36Z")
> [@newcomer](#): > > 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. In all seriousness, do you know what an “audit” is? The Federal Reserve, as pointed out, is already subject to standard financial audits. What sort of audit is it you think should be conducted there in addition to the ones already conducted? A health and safety audit? A quality audit? What standard should it be audited to? Or is this about audits at all? ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [July 24, 2012, 8:58pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/34 "2012-07-24T20:58:16Z")
> [@Ravenman](#): > > Let’s say a bank is considering whether to seek assistance from the Fed to keep itself afloat. It’s a close call: maybe the help won’t be needed. In this case, making the bank’s name public could have an effect on whether or not the bank makes the phone call to the Fed. I’m very far from an expert on the matter, but i feel like if a bank is irresponsible enough to need to be “bailed out” by a quasi-public enterprise the public has a right to know. Who knows what conflicts of interest are at play? > [@](#): > > One could make an analogy with, say, a STD clinic: if the government required people to disclose their names before getting an HIV test, wouldn’t that discourage people from seeking help when they may need it? Yes it would discourage people from seeking help in that situation. If someone does end up having HIV, the people that are having sex with that person have a right to know about it, right? Shareholders and depositors have a right to know what their bank is doing. As I said I’m not an expert so I don’t know if this info is already available without the upcoming bill. > [@](#): > > Honestly, I can see both sides of the argument. Right now, the system is biased toward stability of banks, at the expense of transparency. However, I’m not one who is generally inclined to think that total transparency is always prudent. Who says blind bias toward stability of individual banks is in the public interest? Right now it is the federal reserve that says so. Not a surprise considering they are bankers who are benefitting from public largesse. Doesn’t the public have a say in what policy should be? > [@](#): > > I didn’t say it was needless. But in some respects, the Fed has greater transparency than the Oval Office. . That’s not saying a whole lot. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [July 24, 2012, 9:12pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/35 "2012-07-24T21:12:38Z")
> [@WillFarnaby](#): > > I’m very far from an expert on the matter, but i feel like if a bank is irresponsible enough to need to be “bailed out” by a quasi-public enterprise the public has a right to know. Who knows what conflicts of interest are at play? To my understanding, there’s supposed to be disclosure of these particular types of transactions by the Fed, five years after they occur. What’s wrong with that? > [@](#): > > If someone does end up having HIV, the people that are having sex with that person have a right to know about it, right? But in Libertopia, there would be no right for the government to compel a person to disclose such a thing. However, if a person spread HIV, the people he infects could sue him. That’s libertarianism; no nanny-state government is needed, _right?_ > [@](#): > > Shareholders and depositors have a right to know what their bank is doing. As I said I’m not an expert so I don’t know if this info is already available without the upcoming bill. But in Libertopia, people are against interfering in how a company runs its business. If shareholders and depositors don’t like how transparent a bank’s finances may be, they will take their business elsewhere, _right?_ > [@](#): > > Who says blind bias toward stability of individual banks is in the public interest? Right now it is the federal reserve that says so. Not a surprise considering they are bankers who are benefitting from public largesse. Doesn’t the public have a say in what policy should be? Show that it is “blind bias.” Also, do you acknowledge that the Fed has been audited annually for many years now? Ron Paul doesn’t seem to understand that point. ---
**Author:** ![newcomer](https://avatars.discourse-cdn.com/v4/letter/n/e5b9ba/32.png) [@newcomer](https://boards.straightdope.com/u/newcomer)\ **Post date:** [July 24, 2012, 9:13pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/36 "2012-07-24T21:13:24Z")
> [@RickJay](#): > > In all seriousness, do you know what an “audit” is? > > The Federal Reserve, as pointed out, is already subject to standard financial audits. What sort of audit is it you think should be conducted there in addition to the ones already conducted? A health and safety audit? A quality audit? What standard should it be audited to? > > Or is this about audits at all? I know what audit means. I also know that the most important aspect of Feds operation is not audited. Yes, you could argue “who are you to know?” but that is not an answer. Every bank in US was audited yet financial crisis occurred. Which means, either auditors were clueless or risky subprime was well hidden and excluded from audit scope. Somehow, I lean toward the latter. ---
**Author:** ![Simplicio](https://avatars.discourse-cdn.com/v4/letter/s/c37758/32.png) [@Simplicio](https://boards.straightdope.com/u/Simplicio)\ **Post date:** [July 24, 2012, 9:16pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/37 "2012-07-24T21:16:04Z")
> [@newcomer](#): > > I also know that the most important aspect of Feds operation is not audited. What, specifically, isn’t audited that you feel should be? ---
**Author:** ![Jonathan\_Chance](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jonathan_chance/32/701_2.png) [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)\ **Post date:** [July 24, 2012, 9:22pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/38 "2012-07-24T21:22:57Z")
> [@Deeg](#): > > I’m sorry, but anyone who thinks going back on the gold standard is either practical or a good idea is not the most knowledgeable member of Congress, even if the bar is low. He has also stated a belief in the Amero conspiracy nonsense. My favorite was the time he said that banks fractional reserve requirement should be 100 percent. Gonna be hard to make loans with that in place. ---
**Author:** ![Dissonance](https://avatars.discourse-cdn.com/v4/letter/d/85f322/32.png) [@Dissonance](https://boards.straightdope.com/u/Dissonance)\ **Post date:** [July 24, 2012, 9:32pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/39 "2012-07-24T21:32:35Z")
> [@newcomer](#): > > The post where he calls Ron Paul - the most knowledgeable member of Congress about fiscal and monetary matters I feel compelled to thank you for the laugh. That’s a good one. ---
**Author:** ![Linden\_Arden](https://avatars.discourse-cdn.com/v4/letter/l/53a042/32.png) [@Linden\_Arden](https://boards.straightdope.com/u/Linden_Arden)\ **Post date:** [July 24, 2012, 9:38pm UTC](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235/40 "2012-07-24T21:38:33Z")
> [@newcomer](#): > > I know what audit means. I also know that the most important aspect of Feds operation is not audited. Is someone at the Fed stealing money? [Previous page](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235.md?page=1) [Next page](https://boards.straightdope.com/t/what-is-this-audit-the-fed-stuff-i-have-been-hearing-about/629235.md?page=3)