Hey, Ron Paul, end the Fed … as financial regulator

September 28, 2009

If not for unprecedented actions by the Ben Bernanke-led Federal Reserve, the United States economy might be mired in a depression.

Yet the Fed finds itself on the defensive on Capitol Hill. There was its general counsel, Scott Alvarez, pleading last week to the House Financial Services Committee to reject attempts to expand Government Accountability Office audits of the Fed. Already, the GAO reviews the central bank’s supervisory and regulatory functions. But a bill introduced by Representative Ron “End the Fed” Paul, a Texas Republican, would also subject monetary policy and discount window operation to GAO audits. The bill has nearly 300 co-sponsors and as well as conceptual approval by Barney Frank, chairman of the committee.

The Fed views these expanded audits as threats to its independence from political pressure. As Alvarez put it, “These concerns likely would increase inflation fears and market interest rates and, ultimately, damage economic stability and job creation.”

For instance, when it comes time for the Fed to start withdrawing monetary stimulus from the economy despite continuing high unemployment, the last thing it will need is haranguing from Capitol Hill that it’s moving too fast, too soon.

And if the Fed becomes the regulator of systemically important financially institutions, as the White House advocates, it’s easy to imagine how the central bank would be subject to even more intense and frequent grilling from an emboldened Congress.

Now the move for expanded Fed audits results from both the Fed’s unprecedented efforts to end the financial crisis and its regulatory failures that contributed the financial crisis. The audit bill should be a wakeup call to the central bank that the more it gets involved in the regulatory process, the great future scrutiny from a skeptical Capitol Hill.

And it’s not just Congress. World Bank President Robert Zoellick says that after reviewing the Fed’s regulatory performance, he’s concluded that it’s a bad idea to “vest the independent and powerful technocrats at the Federal Reserve with more authority.”

Past regulatory failures have already undercut confidence in the Fed – “technocrats” is hardly a compliment — and breaking new regulatory ground in the field of systemic risk increases the chances for further erosion. As it is, the Fed is already buckling to congressional pressure. Alvarez told the committee that the Fed would be “happy to work” with lawmakers on ways to release names of companies that borrow from the central bank, perhaps after a period of time.

Not only should Congress reject the idea of expanded Fed audits, it should reject the idea of expanding the Fed’s role as regulator. If need be, create a new regulatory agency or council. Let Team Bernanke focus on executing its stimulus exit strategy and strengthening its reputation as an inflation fighter.


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It’s so time for us to get back to the basics. Our country was founded on human potential, and the belief that people are smart and innovative and can make their own way. Fuck you idiots who think the government should choose for us. I beleive in people. We don’t need the government to tell us who to be, or what to say, or what to do. For the people; By the people. It’s time for us to get involved. It’s time for us to choose for ourselves. It’s time for us to make this country our own again. No more diversions,(like entertainment, and sports, and stuff). We need to get our priorities in line. We owe it to the thousands of men who died young to pay for our freedom….. to die for our right to contest the government.. to stand up and say “No you don’t represent me!!!” POWER TO THE PEOPLE

Posted by andrea webb | Report as abusive

Meet Baghdad Bob.

That’s where that bastard went. Face it. FED is COMING to an END. There is NOTHING in the world that will stop it. LIVE with it, ya sycophant turd of the NWO Banksters!

Posted by EatMePrincePhilipVirus | Report as abusive

“f not for unprecedented actions by the Ben Bernanke-led Federal Reserve, the United States economy might be mired in a depression.”

Are you serious? It’s because of the Federal Reserve that we are in this financial situation in the first damn place. You sir are an idiot.

Posted by Justin | Report as abusive

James, did you just get out of high school??? Have you read the book??? I think your idea is to keep spending money that we don’t have???? You and so many other people are so brain washed. I’m sure Ben Bernanke is doing the best for the American people, yeah right LMAO!! What are you going to tell me next that everyone pays their taxes? Go back to school and try again.

“you carpheads keep talking about the writer smoking crack and crackpipes but your the ones smoking cracks. your hero ron paul is hte one who wants to make everyody smoke pot and crack. so your the crackheads. the auther is write. if the federal reserve didnt take any action we would be in a depression now. if you dont believe that then your an idiot and a moron so go read a book on economics 101. ther are NO economics who belive that we should edit the federal reserve. that is known as a CRACKPOT THEORY. and it goes well with your other CRACKPOT CONSPIRAY THEROIES. you nazis need to be rounded up and throne in jail were you belong. ether that or go to iran were you think its so safe. you and the iranian leader can bomb america since both of you HATE america.”

Oh my goodness. Thank god these are the people defending the FED. The same people who want to tell people what to do with there lives, which of course is the most antiamerican thing there is. Ron Paul certainly doesn’t want people to use drugs, he just defends freedom which means defending personal choice and responsibility. That way its up to families to talk to their children and be in their lives enough to direct them the right direction. If they fail there are churches and charity groups to do it. Not pork barrel spending programs that are proven to create more crime.

On the fed note (back on topic) there are many economists (I believe that is the word you were looking for). Who follow Austrian economics and oddly enough they made the predictions that the FED would create the problems they did and why. Ignorance is bliss. Learn about economics before you write dumb things. Keynesian economics don’t work we are finally coming to realize it.

Posted by JAy | Report as abusive

This article was obviously written by a poor uneducated individual. You can worship the Fed all ya want, but the evidence is stacked against them. We’d be better off without them… audit the Fed, then END IT. Stop drinking the Keynesian Kool-aid and wake up to the reality of Austrian Economics.

Posted by CCarter | Report as abusive

For those of you who want to end the FED, lets end the defense depart. The state dept. and Pentagon and our standing army as well. That would save an abundance of our tax money. We shouldn’t be in foreign countries anyway.And we should be promoting peace not war. Oh I forgot peace is not profitable, so that won’t happen. But don’t forget that we the people will have to join militias to protect our country since we won’t have an army anymore. I don’t know about you but I don’t think I would have the time or energy to join, I am too old. :)

Posted by klisco | Report as abusive