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.
Newcomer, what do you have to say to Ravenman’s post?
Thanks,
Rob
Are you suggesting that, say, Feds creating Maiden Lane(s) is not a political decision?
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?
Well, at any rate, he is no economist.
No, I meant respond to the part about the bill forcing the Fed to disclose which banks sought bailouts. (his 4th paragraph)
Thanks,
Rob
Wait, why is that “needless”?
And why is that needless?
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 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.
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.
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.
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?
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.
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.
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’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?
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.
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?
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That’s not saying a whole lot.
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?
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?
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?
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.
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.
What, specifically, isn’t audited that you feel should be?
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.
I feel compelled to thank you for the laugh. That’s a good one.
Is someone at the Fed stealing money?