Ron Paul pens an ideas piece for Politico. The meat:For nearly 100 years the Federal Reserve has operated largely in the shadows. The Fed’s monetary policy operations, including open-market operations and agreements with foreign governments and central banks, are exempt from audit by the Government Accountability Office.
Congressman Paul has introduced H.R. 1207, of which you can read full text here. If you are lazy like me, you can read a summary here.
Congress itself never delves into these areas in the limited time it has during the Fed chairman’s semiannual appearances before the House Financial Services Committee, and any pointed questions are evaded. Former Fed Chairman Alan Greenspan was adept at this — his “Greenspan-speak” was legendary — but Chairman Ben Bernanke is no slouch, either, at giving vague and nonresponsive answers to direct questions.
While I oppose giving the Fed any additional power, even members who support an expansion should support dealing with the crucial issue of Fed oversight — before proposals for giving the Fed additional power as a regulator of the financial system are discussed. Using Section 13(3) of the Federal Reserve Act, the Fed has gone on the warpath over the past two years. It has involved itself in direct financial support to individual firms such as Bear Stearns and American International Group, has developed new credit facilities to funnel money to numerous other financial companies and has boosted its balance sheet to more than $2 trillion — secure in the knowledge that the legal blocks put in place in 31 U.S.C. 714 to prevent GAO audits of the most significant of the Fed’s actions will hide it from any serious oversight. For an organization with arguably as much clout as the rest of the federal government put together to be able to escape significant oversight is a situation that needs to be rectified immediately.
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Photo: Evan Vucci/AP Photo
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