Friday
Sep252009
Ron Paul Seeks Fed Oversight, Fed Fights Back
Friday, September 25, 2009 at 4:35PM
by Julianne LaJeunesse- University of New Mexico
Should the Federal Reserve Committee be regulated by the Government Accountability Office? U.S. Representative Ron Paul (R-Texas) says yes, and Scott G. Alvarez of the Federal Reserve says no.
Paul is the sponsor of H.R. 1207, which calls for audits on the Federal Reserve, a quasi-public entity that in theory can control the nation's money supply, set interest rates, and implement monetary policy.
At a Friday hearing, Paul said the Fed needs GAO oversight because they aren't doing their job correctly.
"The Federal Reserve was designed, and their mandate was to make sure that we have full employment, price stability, and stable interest rates," Paul said. "In my lifetime, interest rates have been 21 percent and less than one percent- so they fail there. They [the Fed] want a stable dollar and stable prices... well, we have continuous inflation."
Paul said it's Congress' responsibility to make sure the Fed does what it was created for and not buy into the idea that the Fed needs more power and more secrecy.
Fed Board of Governors General Counselor Scott G. Alvarez argued before Paul, Chairman Barney Frank (D-Mass.), and other members of the House Financial Services Committee, saying that Fed autonomy is instrumental in safeguarding U.S. interest rates, but also that an independent Fed is a nonpolitical Fed.
Alvarez said from an economic stance, GAO regulation would hinder Fed access to and implementation of some programs.
"If it looks like the Federal Reserve is changing directions because a statement [of] the policy review by another agency is influencing the Federal Reserve's decision... then the integrity of the process will be undermined, confidence that the Federal Reserve will move in the direction that is best for the economy will be undermined, and we won't be able to carry out our job as well," Alvarez said. "And that's what we're concerned about."
Alvarez said the Fed has taken many steps to increase transparency since the 2008 bank bailouts, but when Rep. Emanuel Cleaver II (D- Mo.) asked him about the misinterpretation between Congress and the Treasury Department and the Federal Reserve, as far as Troubled Assets Relief Program allocations, Alvarez said the latter departments decided to use the funds to restore confidence to banking institution, a decision Cleaver said was not immediately apparent when TARP was passed.
Should the Federal Reserve Committee be regulated by the Government Accountability Office? U.S. Representative Ron Paul (R-Texas) says yes, and Scott G. Alvarez of the Federal Reserve says no.
Paul is the sponsor of H.R. 1207, which calls for audits on the Federal Reserve, a quasi-public entity that in theory can control the nation's money supply, set interest rates, and implement monetary policy.
At a Friday hearing, Paul said the Fed needs GAO oversight because they aren't doing their job correctly.
"The Federal Reserve was designed, and their mandate was to make sure that we have full employment, price stability, and stable interest rates," Paul said. "In my lifetime, interest rates have been 21 percent and less than one percent- so they fail there. They [the Fed] want a stable dollar and stable prices... well, we have continuous inflation."
Paul said it's Congress' responsibility to make sure the Fed does what it was created for and not buy into the idea that the Fed needs more power and more secrecy.
Fed Board of Governors General Counselor Scott G. Alvarez argued before Paul, Chairman Barney Frank (D-Mass.), and other members of the House Financial Services Committee, saying that Fed autonomy is instrumental in safeguarding U.S. interest rates, but also that an independent Fed is a nonpolitical Fed.
Alvarez said from an economic stance, GAO regulation would hinder Fed access to and implementation of some programs.
"If it looks like the Federal Reserve is changing directions because a statement [of] the policy review by another agency is influencing the Federal Reserve's decision... then the integrity of the process will be undermined, confidence that the Federal Reserve will move in the direction that is best for the economy will be undermined, and we won't be able to carry out our job as well," Alvarez said. "And that's what we're concerned about."
Alvarez said the Fed has taken many steps to increase transparency since the 2008 bank bailouts, but when Rep. Emanuel Cleaver II (D- Mo.) asked him about the misinterpretation between Congress and the Treasury Department and the Federal Reserve, as far as Troubled Assets Relief Program allocations, Alvarez said the latter departments decided to use the funds to restore confidence to banking institution, a decision Cleaver said was not immediately apparent when TARP was passed.
Reader Comments (6)
"Quasi-public" is probably accurate. "In theory", is patently false; the Fed in FACT controls the nation's money supply. The Fed does not want to open its books to an audit because they know that they will be done for tomorrow once their high crimes and shenanigans are exposed to the light of public scrutiny.
THE FEDERAL RESERVE MUST GO, END OF STORY.
MARK TOWNSEND FROM ALABAMA
Those who don't want light shined on what they are doing are usually doing something they what to hide, that is why the Fed doesn't want any light shined on their operation. What they are doing is un-Constitutional, they know it as well as those of us who wish to investigate. I am with Mr. Townsend from Alabama.... The Federal Reserve must go.
""Fed autonomy is instrumental in safeguarding U.S. interest rates, but also that an independent Fed is a nonpolitical Fed.""
Oh really! So the Fed is "nonpolitical" when the Chairman addresses the Congressional Black Caucus today?
If the House and Senate versions pass, I guarantee you, there will be numerous privately chartered flights to leave the country on the night of.
END THE BANKING CARTEL / END THE OLIGARCHY
Dear All,
There is no bill more important to the fate of the U.S. economy and with it the fate of the American people (read Labor and all workers who exchange 9-2-5 time for money) than HR-1207.
You must understand exactly why the oligarch capitalist elite of both parties are terrorified of this bill – including those elite within the Democratic party. It will completely destroy their control and guidance on broad investment in the United States, and their duplicitous trades off that overseas, think labor arbitrage, etc.
With the passing of HR-1207 and the eventual end of the Federal Reserve…investing PRIVATE EQUITY in the United States (not just buying our passive government bonds that does nothing for the American people) will be the greatest investment opportunity in over a 100 years.
Waves of domestic and international capital post HR-1207 will stop buying our bonds (which is passive to the American people) and start investing EQUITY (which is positive for the American people) direct into America business and will result in the full reverse of our sky rocketing unemployment. It will be an economic reset as if it was the 1880s all over again. We will find ourselves on par with China and others in a way that will upset all American & Chinese globalists (though not European)…..and with it flush down the toilet a whole class of double-faced elites that want nothing more to hold us down where they can arbitrage the American peoples ignorance to the bitter end – which is exactly what is still going on.
HR-1207 has broad bi-partisan support. There is NO QUESTION this bill can pass the House and Senate VETO proof. PLEASE CALL AND HARASS BARNEY FRANK AND OBAMA TO STOP STANDING IN THE WAY.