Defending himself against critics, Representative Ron Paul of Texas played down continuing concerns on Friday that his amendment to give Congress sweeping new oversight powers over the Federal Reserve would compromise the central bank’s political independence. He asserted that the Fed was not truly as independent as it would like the public to believe.
“There is already a tremendous amount of political pressure on the Fed,” Mr. Paul, a libertarian Republican, told DealBook. “The Federal Reserve Board chairmen have notoriously been sympathetic to the presidents who might be reappointing them and there has been evidence to show that.”
Mr. Paul also asserted that the Fed was beholden to pressures beyond the government from special interests, including Wall Street. “It’s not like the banks and Goldman Sachs doesn’t have influence over the Fed,” Mr. Paul said. “Every time the Fed says it wants its
Rand Paul Reintroduces Audit The Fed Bill, DeMint And Vitter Co-Sponsors
by ilene - January 26th, 2011 6:49 pm
Courtesy of Tyler Durden
If there is one thing that the one-time GAO audit of the Fed disclosed, is how woefully insufficient the extremely superficial data discovery was. Another thing uncovered was just how needed this disclosure was: it provided extended material into how the Fed subsidizes banks (both domestic and international) on an ongoing basis, not to mention substantial number crunching for the blogosphere. Either way, if Bernanke was hoping that the Frank-Dodd bill would take care of the Fed opacity, pardon, transparency issue in perpetuity, he may be disappointed: Ron’s son, Rand, has just announced he is introducing legislation to, well, Audit The Fed, precisely along the lines of what his father did previously and generated massive support from everyone in Congress. Once again Ben Bernanke is about to become a major thorn on the side of the political puppetry.
WASHINGTON, D.C. – Today, Senator Rand Paul introduced legislation allowing for a full audit of the Federal Reserve. This legislation is a Senate version of similar legislation long-championed by and introduced this session in the House of Representatives by his father, Congressman Ron Paul of Texas. Co-sponsoring the “Federal Reserve Transparency Act of 2011” (S. 202), are Senators Jim DeMint of South Carolina and David Vitter of Louisiana.
“We must take a critical look at the Fed’s monetary policy decisions, discount window operations, and a host of other things, with a real audit – and not just pay lip-service to the idea of an audit,” Sen. Paul said today. “At a time when we’re seeing great volatility in small Euro-zone economies like Greece, Portugal, and Ireland, it is more crucial than ever that we have real transparency at our own central bank.“
The bill will eliminate the current audit restrictions placed on the Government Accountability Office (GAO) and mandate a complete audit of the Federal Reserve to be completed by a firm deadline, finally delivering answers to the American people about how their money is being spent by Washington.
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What Does The Financial Reform Bill Do Other Than Being Completely And Utterly Worthless?
by ilene - July 15th, 2010 6:44 pm
What Does The Financial Reform Bill Do Other Than Being Completely And Utterly Worthless?
Courtesy of Michael Synder at The Economic Collapse
Is it possible to write a 2,300 page piece of legislation that accomplishes next to nothing and is pretty much completely and utterly worthless? The answer is yes. Barack Obama has been trumpeting the Dodd-Frank financial reform bill as the "biggest rewrite of Wall Street rules since the Great Depression", but the truth is that after the Wall Street lobbyists got done carving it up, the bill that was left was so watered down and so toothless that it essentially accomplishes nothing except creating even more government bureaucracy and even more mind-numbing paperwork.
The bill is so riddled with loopholes for the big banks that it is basically the legislative equivalent of Swiss cheese. The Democrats in the Senate were ecstatic when they announced that they had secured the 60 votes needed to pass this legislation, but when they are asked about what the financial reform bill will do, most of them are left stammering for some kind of cohesive response. The sad truth is that most of them probably don’t understand the bill and none of them will probably ever read the entire thing.
So will the financial reform bill do any good at all?
Well, yes.
A very, very small amount.
Essentially, it is kind of like going over to the Pacific Ocean and scooping out a couple of cups of water.
That is about how much good this bill is going to do.
But U.S. Senate Majority Leader Harry Reid is making this sound like this is some kind of history-changing legislation….
"We’re cleaning up Wall Street."
Oh really?
Charles Geisst, professor of finance at Manhattan College recently had the following to say about this absolutely toothless bill….
Like health-care reform, this bill is being drawn up to grab headlines but its details betray it as nothing more than a slap on the wrist for Wall Street. It is true that Wall Street can commit grand theft and apparently get off with nothing more than community service.
The truth is that most of us never expected the U.S. government to truly take on Wall Street. The relationship between the two is just way too cozy for that to happen.
So does the financial reform bill actually accomplish anything?
Yes.
Let’s take a look…
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The Financial Crisis Is Everywhere a Fraud, and Official Complacency Inevitably Leads to a Crisis
by ilene - July 1st, 2010 4:02 pm
The Financial Crisis Is Everywhere a Fraud, and Official Complacency Inevitably Leads to a Crisis
Courtesy of JESSE’S CAFÉ AMÉRICAIN
"A revolution is coming — a revolution which will be peaceful if we are wise enough; compassionate if we care enough; successful if we are fortunate enough — But a revolution which is coming whether we will it or not. We can affect its character; we cannot alter its inevitability." Robert F. Kennedy, 9 May 1966
The Fed is now engaged in a control fraud, and what appears to be racketeering in conjunction with a few big investment banks. They may have entered into it with good intentions, but they seem to have been turned towards deceit and corruption.
This is not an historical event, but an ongoing theft in conjunction with a number of Wall Street banks, and politicians whom they have paid off through a corrupt system of campaign financing and influence peddling.
This is nothing new in history if one reads the unsanitized version. But people never think it can happen today, that somehow yesterday things were different, as if one is looking at some distant, foreign land. This is a facet of the illusion of general progress.
Audit the Fed. Vote out incumbents until they give you what you demand. Take back the billions stolen through millionaire’s taxes similar to those in place before the ‘Reagan Revolution.’ If there is no profit in theft, it will not happen. EU Puts Tough Restrictions on Banker’s Bonuses.
The individuals in government are not a ruling class, and were never intended to be, although after a second term they start to feel themselves to be privileged, with better pensions and benefits and pay raises than the people whom they serve. These are your chosen representatives, sworn to uphold the law and governing with your consent. The United States is not the Congress, the Supreme Court and the Executive in Washington, it is the people joined freely by their mutual consent under the Constitution. It is of the people, by the people, and for the people.
Goldman Sachs, AIG, and the NY Fed are at the heart of it. Everyone in the government, the media, and on the Street knows this. We are now in the coverup stage of a scandal, similar to Watergate when the White House was stone-walling. The difference is that the corruption and capture of the government…
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Ron Paul Says It’s NOT Too Late To Call Your Senator; Sanders Wimps Out; Paul Backs the Vitter amendment
by ilene - May 11th, 2010 2:55 pm
Ron Paul Says It’s NOT Too Late To Call Your Senator; Sanders Wimps Out; Paul Backs the Vitter amendment
Courtesy of Mish
The New American says $Trillion Bailout of Euro, Greece Shows Need to Audit the Fed
The timing of the sellout by Senator Bernie Sanders (I-Vt.) last Thursday, May 6, on legislation to audit the Federal Reserve could not have been more auspicious — or more suspicious. After pledging for months that he was going to offer an amendment in the Senate identical to "Audit the Fed" legislation in the House (H.R. 1207) authored by Congressman Ron Paul (R-Texas), Sanders caved in to pressures from the Obama administration and the Federal Reserve.
In a last-minute switch, Sanders agreed to substitute a watered-down version of the audit as an amendment to financial reform legislation sponsored by Senate Banking Committee Chairman Christopher Dodd (D-Conn.).
The new Sanders amendment would provide the administration, the Fed, and Members of Congress with a certain level of cover, allowing them to claim that they had supported auditing the Fed, while at the same time allowing the Fed to continue most of its operations in secret, beyond the scrutiny of Congress and the public. The effort to push the Sanders amendment through on a rush vote on May 6 failed thanks to the efforts of Senator David Vitter (R-La.), a fierce Fed critic, who insisted on a side-by-side vote of the Sanders sellout amendment with the original audit amendment.
With the vote in the Senate possibly coming as soon as Tuesday, May 12, champions of genuine transparency are urging an all-out push to flood the Senate with emails, calls, and faxes to oppose the Sanders sellout amendment and support the Vitter amendment.
It’s Not Too Late To Call
Ron Paul says It’s NOT Too Late To Call Your Senator And Demand a Thorough Fed Audit.
Senator Offers Grayson/Paul Audit the Fed Amendment as Stand-Alone Amendment
The Daily Paul reports Sen. Vitter to Offer Grayson/Paul Audit the Fed Amendment as Stand-Alone Amendment
While some are celebrating the Sanders’ Audit the Fed compromise as a victory, Ron Paul isn’t one of them. And according to the Matt Hawes of the Campaign for Liberty, David Vitter will be offering up the original Grayson-Paul amendment as a stand-alone amendment.
Although Ron Paul called Bernie Sanders and asked him to offer the bill in the Senate
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“Audit the Fed” Dies But Doesn’t Really Die
by ilene - May 7th, 2010 6:30 pm
"Audit the Fed" Dies But Doesn’t Really Die
Courtesy of Jr. Deputy Accountant
After much lip-flapping over the dangers of exposing the Fed’s top secret monetary policy thought process to ignorant outsiders, opponents of a full Fed audit have gotten their wish and killed Audit the Fed as we knew it.
Don’t worry, it’s not quite dead.
Plan for Congressional Audits of Fed Dies in Senate (WSJ):
Last-minute maneuvering in the Senate allowed the Federal Reserve to sidestep legislation that would have exposed its interest-rate decision-making to congressional auditors.
Pressure from the Obama administration led Senate lawmakers to alter a provision pushed by Sen. Bernie Sanders (I., Vt.) that was gaining momentum despite opposition from the Treasury and the Fed. It would have largely repealed a 32-year-old law that shields Fed monetary policy from congressional auditors.
The compromise, endorsed by Senate Banking Committee Chairman Christopher Dodd (D., Conn.) and the Treasury, would require the Fed to disclose more details about its lending during the financial crisis. It would also require a one-time audit of those loans and a one-time review of Fed governance. A formal vote was pushed back until next week.
Thursday’s Senate showdown came after senators on the left and right joined forces to support Mr. Sanders’ provision.
"At a time when our entire financial system almost collapsed, we cannot let the Fed operate in secrecy any longer," Mr. Sanders said. "The American people have a right to know."
But Fed Chairman Ben Bernanke, while insisting on a commitment to "openness" at the Fed, said in a letter to Congress the Sanders measure would "seriously threaten monetary policy independence, increase inflation fears and market interest rates, and damage economic stability and job creation."
Gee, would Bernanke feel seriously threatened because he is smart enough to know that if we were to crack open his secret diary we’d discover that it’s been HIM stoking inflation and manipulating interest rates?
Anyway, we’ll never get to crack into monetary policy (just a guess) but that’s probably for the best; the more we pick at the Fed, the more we expose their weaknesses to foreign governments or central banks who might like to manipulate the precarious position our own central bank is in. It’s a strategic move, and those sorts of moves (some of …
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Fed Privately Lobbies Senate to Kill Audit; What You Can Do!
by ilene - May 4th, 2010 2:46 pm
Fed Privately Lobbies Senate to Kill Audit; What You Can Do!
Courtesy of Mish
A bill sponsored by Ron Paul and Alan Grayson to thoroughly audit the Fed, passed the House. However in a brazen move that ought to offend the sensibilities of every citizen, the Fed is lobbying Senate members to water down the bill so that it is meaningless.
The Huffington Post tells the story in Fed Privately Lobbying Against Audit.
The Federal Reserve is privately lobbying against a bipartisan Senate amendment that would open the central bank to an audit by the Government Accountability Office, according to documents distributed to Senate offices by a Fed official.
In order to obtain the documents, HuffPost agreed not to reveal the name of the Federal Reserve official who did the specific lobbying in question.
"As I mentioned, we believe that the bipartisan Corker-Merkley provision in the Dodd Bill is quite strong and addresses issues of transparency and disclosure without impinging on the independence of monetary policy," the official goes on.
Merkley teamed with Sen. Bob Corker (R-Tenn.) on an audit provision, but Merkley himself says he’d prefer to go further. "I appreciate Representative [Alan] Grayson’s concerns over accountability at the Federal Reserve. I have been a strong proponent of Fed reform and voted against the re-confirmation of Ben Bernanke because the Fed has been so lax in using its regulatory powers," Merkley said in a statement to HuffPost, responding to an analysis from Rep. Alan Grayson (D-Fla.) showing that the Senate bill did not meaningfully expand transparency.
The Fed argument is a replay of a tactic that the bank tried in the House. Instead of outright opposition, the Fed backed an amendment in the lower chamber from Rep. Mel Watt (D-N.C.), which the bank said would expand transparency but not interfere with monetary policy. It became clear, however, that the amendment would not expand transparency and was an attempt to defeat the audit in general. The Watt amendment was soundly defeated.
The Corker-Merkley amendment is the Senate version of the Watt amendment and the Fed is once again arguing that the broader amendment will impinge on the independence of monetary policy.
"The Sanders amendment, however, would directly interfere with monetary policy," argues the Fed official. "The amendment removes the current statutory protection for core monetary policy activities from GAO audit and would permit the GAO to
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In Defense Of Secrecy; Three Prong Attack On The Fed; Selective Myopia
by ilene - January 13th, 2010 1:49 pm
Here’s another terrific article by Mish. If you’ve wondered like I have about the 45B the Fed apparently made last year, towards the end, Mish questions that figure. Op-Toons has a suggestion to improve the accuracy of reported numbers (keep reading). – Ilene
In Defense Of Secrecy; Three Prong Attack On The Fed; Selective Myopia
The Fed is pulling out all stops to defend its secrets, including publishing self-serving mathematical gibberish. Please consider the St. Louis Fed article on the Social Cost of Transparency.
Unless you are an academic wonk, you will be stymied by pages that look like this …
There are 24 pages of such nonsense with titles like
- 2.2 Private Information and Full Commitment
- 2.3 Private Information and Limited Commitment
- 3.2.1 Decision Making in the Day
- 3.2.2 Decision Making at Night
- 3.2.4 A No-News Economy
Just for good measure here is the page describing 3.2.4 A No-News Economy
The article culminates with …
For an asset economy then, the prescription of “full transparency” is not generally warranted.
Approaching the problem under the premise that fuller transparency is always desirable may not be the right place to start.
Hiding Behind Empirical Formulas
The problem is Bernanke places his complete faith in such gibberish, so much so that he has lost all sense of real world action by real people. The result is that in spite of his PhD, he could not see a housing bubble that was obvious to anyone using a single ounce of common sense.
Moreover, had Bernanke simply opened his eyes instead of relying on a poor interpretation of an already fatally flawed Taylor Rule, the credit/housing bubble would not have gotten as big as it did, and we might not be discussing the above ridiculous mathematical formulas that supposedly show us the Fed needs to be secretive.
For more on Bernanke’s love affair with the Taylor Rule (even though Taylor Disputes Bernanke on its usage), please see Taylor, NY Times, Dean Baker Call Out Bernanke.
Appeals Court To Hear Bloomberg’s Freedom of Information Suit
Bloomberg has been in a battle with the Fed for two years over the Fed’s “unprecedented and highly controversial use” of public money. In August it "won" the lawsuit but the Fed has appealed.
Please consider
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Pawns For The Fed: George Will, Robert J. Samuelson, Bonddad, Time, Others
by ilene - December 17th, 2009 2:26 pm
Pawns For The Fed: George Will, Robert J. Samuelson, Bonddad, Time, Others
Courtesy of Mish
The Fed is fighting tooth and nail Ron Paul’s Audit The Fed proposal. Along the way it has picked up backers in some surprising places.
Without even looking at the bill (or perhaps simply not caring to report the truth), rumors abound that the bill will purposely interfere with the Fed’s monetary and interest rate policy.
Please consider Why the "Audit the Fed" Movement Is Dead Wrong by Hale "Bonddad" Stewart. Here is a summary of points Bonddad, followed with my rebuttal.
Bondad asks:
“So — we already have an audit every year. Why do we need another one?”
“There are two answers to that question. The first is downright scary: the Texas Republican’s proposal requiring audits of the central bank’s interest-rate decisions is getting traction.”
Mish Reply:
If there is nothing to hide, why object?
Bear in mind there are many things the Fed does not report on but should. There is is no marked-to-market reporting of what is on the Fed’s balance sheet nor is there accounting for currency swaps to foreign central banks.
Moreover, Ron Paul explicitly put wording in his bill to not question the Fed’s interest rate decisions or monetary policy, and Ron Paul himself has concerns about the Fed’s independence from politics.
Please consider the New York Times article Ron Paul Defends His Plan for Fed Oversight.
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Dylan Ratigan Discusses The “Audit The Fed” Support Letter
by ilene - November 19th, 2009 1:52 pm
Must see video with Dylan Ratigan, Ryan Grim (featured here yesterday) and Naomi Klein. Naomi talks about the zombie banks actually being vampires, sucking the blood (money) out of our society, fearing the fate of withering and dying in the light. How can we help? Naomi suggests that we need to "out the lobbyists." – Ilene
Dylan Ratigan Discusses The "Audit The Fed" Support Letter
The pressure on both Geithner and Bernanke is finally reaching a crescendo. Fixing the US economy would start with the departure of Geithner (forced or otherwise) and the full audit of the Fed. Everything else is smoke and overleveraged, uncollateralized mirrors (perfectly acceptable in the Fed’s discount window). An interview by Dylan Ratigan of Ryan Grim and Naomi Klein makes this point loud and clear. The castration of Ron Paul’s bill must not occur if America does not want to end up in the same financial collapse gutter it found itself in 2008. Mel Watt and others have to look beyond their immediate financial gain and consider what is critical for the American people.
DYLAN RATIGAN: How is the Federal Reserve trying to basically game this Ron Paul amendment which looks like it will pass, and then chop its head off just as soon as it makes it into the room?
RYAN GRIM: This is an immensely consequential debate that’s going on in the House right now, and it also tells you a little bit about how Congress works.
The Ron Paul/Alan Grayson bill has enough support to pass. So instead of trying to kill it, which they can’t do any more, they come in with what they call a “compromise.” A serious with a capital “s” amendment, but if you look at the fine print of it, it actually just extends the secrecy of the federal reserve, and as you said it’s backed by prominent economists at the fed and formerly at the Fed. They didn’t say that they that they were with the Fed when they sent a letter around backing it, but a Google search checking their resumes show that these are Fed bankers behind it.There is really unprecedented and very meaningful opposition to the Federal Reserve that has come together from the left and the right kind of opposing the center that is
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Economists Opposing Fed Audit Have Undisclosed Fed Ties
by ilene - November 19th, 2009 12:13 am
Ryan Grim is the senior congressional correspondent for the Huffington Post, former staff reporter with Politico.com and Washington City Paper, and author of the book, "This Is Your Country on Drugs." Ryan won the 2007 Alt-Weekly Award for best long-form news-story. – Ilene
Economists Opposing Fed Audit Have Undisclosed Fed Ties
Courtesy of Ryan Grim
Article appears originally in the Huffington Post
As the debate over an audit of the Federal Reserve intensifies in the House, one camp is trotting out eight academics that it calls a "political cross section of prominent economists."
A review of their backgrounds shows they are anything but.
In a letter to the House Financial Services Committee earlier this month, all eight wrote that they support the type of amendment now being introduced by Rep. Mel Watt (D-N.C.). Watt’s approach purports to increase Fed transparency while it actually would tighten restrictions on any audits that could go forward.
The letter was sent around Wednesday by Watt’s staff to members of the committee in advance of a vote scheduled for Thursday.
Watt’s measure is in competition with an amendment cosponsored by Reps. Ron Paul (R-Texas) and Alan Grayson (D-Fla.), which would repeal the restrictions that Watt leaves in place.
But far from a broad cross-section, the "prominent economists" lobbying on behalf of the Watt bill are in fact deeply involved with the Federal Reserve. Seven of the eight are either currently on the Fed’s payroll or have been in the past.
The Fed connections are not outlined in the letter sent around to committee members on Wednesday, but are publicly discernible through a review of their resumes, which are all posted online.
In September, Huffington Post reported that the Federal Reserve has accomplished a soft form of effective control over the field of monetary economics simply by employing — and being the means for career advance — for an overwhelming proportion of the discipline.
Now that the Fed is locked in a legislative battle on the Hill, it can call on those economists to give their "unvarnished" opinions to lawmakers.
The connections that the seven economists lobbying Congress have to the Fed are not incidental and four of them maintain current positions.
Let’s run the traps:
Frederic Mishkin is a former board member, having served from 2006-2008. His career at the Fed…
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