Liberty MavenMore of the same tired arguments against Ron Paul’s Fed Audit Bill
November 11th, 2009 11:47 am | by Marc Gallagher | Published in Banking, Commentary, Economics, Federal Reserve, Liberty, Maven Commentary, Ron Paul | 12 Responses
Ron Paul’s bill to audit the Federal Reserve (HR.1207) has over 300 cosponsors, well above 2/3rds of the House, including every single House Republican. A few days ago an opinion piece appeared in the Wall Street Journal arguing that the Federal Reserve is already transparent enough and that a full audit would be overkill and dangerous. They write:
Economic theory and massive amounts of empirical evidence make a strong case for maintaining the Fed’s independence. When central banks are subjected to political pressure, authorities often pursue excessively expansionary monetary policy in order to lower unemployment in the short run. This produces higher inflation and higher interest rates without lowering unemployment in the long term. This has happened over and over again in the past, not only in the United States but in many other countries throughout the world.
The Fed’s independence is critical to its credibility. During the financial crisis, this credibility allowed the Fed to take extraordinary action to prevent a possible depression without triggering inflation. But eventually the Fed will have to scale back its unprecedented monetary accommodation. When it does move to tighten monetary conditions, it must be allowed to do so without political interference.
This is a tired argument at this point. The bottom line, once again, is that the Fed cannot “maintain its independence” when it is not independent to begin with. It is politicized already and it is plainly obvious to most observers without an axe to grind. The fact that this opinion piece appears in the WSJ at all is evidence in itself of this. It’s always important to consider the sources. The authors of the piece are both “in bed with the Fed”, so to speak.
Anil Kashyup was “an economist for the Board of Governors for the Federal Reserve System. He currently works as a consultant for the Federal Reserve Bank of Chicago, and serves as a member of the Economic Advisory Panel of the Federal Reserve Bank of New York, and as a Research Associate for the National Bureau of Economic Research (NBER).” His faculty bio page is here.
Frederic Mishkin is a former member of the board of governors of the Federal Reserve (2006-2008). Perhaps more telling is the following juicy bit:
In 2006, Mishkin co-authored a report called “Financial Stability in Iceland”. The report maintained that Iceland’s economic fundamentals were strong. The report was commissioned by the Icelandic Chamber of Commerce in response to critical coverage of the Icelandic economy and certain Icelandic companies in the international business media.
Iceland subsequently experienced a spectacular collapse within a year of Mishkin’s good report.
So, considering the sources, this WSJ opinion piece should be ignored and ostracized as the comments on the article are already showing.
November 11th, 2009 at 8:28 pm (#)
The assumption that the Fed isn't, and hasn't ALWAYS been politically influenced is a bullshit argument. Don't fall for it. Who nominates the Board of Governors? Politicians!
November 11th, 2009 at 5:13 pm (#)
"Iceland subsequently experienced a spectacular collapse within a year of Mishkin’s good report."
Priceless! Credibility lost
November 11th, 2009 at 8:28 pm (#)
The assumption that the Fed isn't, and hasn't ALWAYS been politically influenced is a bullshit argument. Don't fall for it. Who nominates the Board of Governors? Politicians!
November 11th, 2009 at 8:28 pm (#)
The assumption that the Fed isn't, and hasn't ALWAYS been politically influenced is a bullshit argument. Don't fall for it. Who nominates the Board of Governors? Politicians!
November 12th, 2009 at 2:35 pm (#)
It seems that We the People are finally beginning to wake up from our long slumber. I wonder though if it's really possible to push Dr. Paul's Transparency Act through Congress. The plutocrats have plenty of money with which to defeat, denature or deflect it.
November 12th, 2009 at 2:35 pm (#)
It seems that We the People are finally beginning to wake up from our long slumber. I wonder though if it's really possible to push Dr. Paul's Transparency Act through Congress. The plutocrats have plenty of money with which to defeat, denature or deflect it.
November 12th, 2009 at 4:59 pm (#)
Independence of the Fed is exactly what we do NOT want.
CONGRESS, and ONLY Congress is charged with responsibility for monetary policy. So says the US Constitution, Article 1, Section 8. Nothing in the Constitution authorizes Congress to establish a central bank in the first place. It certainly does not allow Congress to delegate its responsibility to a semi-private, quasi-governmental cartel of banks.
The only answer is to END THE FED!
November 12th, 2009 at 7:24 pm (#)
Good job shooting down that article Mr. Marc Gallagher.
I would have added the following:
From the article by ANIL K KASHYAP
"The Fed produces a report and testifies twice a year before Congress about its monetary policy actions. During this testimony, the Fed is forced to explain what it has done,"
This statement is false. If it were true, there would be NO support for Ron Paul's bill because we would already know where our trillion + went.
November 12th, 2009 at 7:24 pm (#)
Good job shooting down that article Mr. Marc Gallagher.
I would have added the following:
From the article by ANIL K KASHYAP
"The Fed produces a report and testifies twice a year before Congress about its monetary policy actions. During this testimony, the Fed is forced to explain what it has done,"
This statement is false. If it were true, there would be NO support for Ron Paul's bill because we would already know where our trillion + went.
November 12th, 2009 at 7:24 pm (#)
ANIL K KASHYAP has used a self defeating argument. He says the Fed should not be audited, but an audit would only produce redundant information. Then what’s the harm Mr. Kashyap?
ANIL K KASHYAP said: The Fed's independence is critical to its credibility." Meaning, If Americans knew what the Fed was really doing, we would see reason to not trust it. Is there harm in Americans receiving redundant information about the Fed, or is there something else, something that motivates the Fed Chairman himself to lobby against the Paul bill?
I see reason to believe that Mr. Kashyap does not want the public to learn what we will learn if the Fed is audited, otherwise why even bother to write the article?
November 12th, 2009 at 7:24 pm (#)
ANIL K KASHYAP has used a self defeating argument. He says the Fed should not be audited, but an audit would only produce redundant information. Then what’s the harm Mr. Kashyap?
ANIL K KASHYAP said: The Fed's independence is critical to its credibility." Meaning, If Americans knew what the Fed was really doing, we would see reason to not trust it. Is there harm in Americans receiving redundant information about the Fed, or is there something else, something that motivates the Fed Chairman himself to lobby against the Paul bill?
I see reason to believe that Mr. Kashyap does not want the public to learn what we will learn if the Fed is audited, otherwise why even bother to write the article?
November 13th, 2009 at 12:53 pm (#)
Great post! This is what we need to do and you guys are on it. We need to identify all efforts to kills these bills ( HR 1207 & S604). Then we need to research the sources of the influence on those that oppose it. This post is the perfect example of doing this. Also, we need to identify all those in congress who actively oppose and research their campaign funding sources and other benefactors – then expose them in public. Unfortunately the so-called major media "journalists" will not do this. It is left to independent groups like Liberty Maven to do it.
Bravo!