Richard Fisher, the Dallas Federal Reserve Bank president, is once again going after everyone who supports an audit of the Federal Reserve System. In particular he has been hitting at Sen. Rand Paul for having introduced Senate Bill 264, which calls for a full audit of the Fed. Fisher has no new arguments against the audit. He repeats the same old clichés that have come from the Federal Reserve for the past several decades. I certainly have heard them all several times recited by Federal Reserve Board chairmen as they testified before the House Financial Services Committee.
The argument that the Fed is already audited is purposely misleading. Yes there is a minor financial audit of day-to-day expenditures of the Fed, but there has never been a full audit of the policies and the privileges passed out to the special interests. That is what remains secret – especially all foreign transactions.
Once again the Fed, through Richard Fisher’s recent tirades against the transparency of the Fed which 80% of the American people support, places all the blame on Congressional shortcomings. Though this is part of the problem, it is the expected consequence of the Federal Reserve becoming politicized and accommodating the politicians by monetizing the debt run-up for the purpose of pursuing illegal wars and excessive runaway domestic welfare spending. All the Fed needs to do to correct deficit spending is to quit buying government debt and quit accommodating the political special interests. Yes interest rates would rise, which would curtail Congressional spending and the Federal Reserve’s printing presses.
When members of the Federal Reserve Board argue against transparency of the Fed, they are arguing for secrecy for policies for which they would be embarrassed if they became public record.
Fisher, of course, like all Fed officials, confuses the issue by deliberately misinterpreting the audit the Fed legislation, claiming it would give Congress the authority to manipulate interest rates and credit as a central economic planner. The audit the Fed bills do nothing of the sort. The free market and the Constitution give no authority for either the Fed or the Congress to operate as a central economic planner.
Fisher concludes his statement attacking those of us who argue for transparency of the Fed by saying: “Audit the Fed is nothing more than an attempt to override purely economic judgments and bend monetary policy to the will of politicians. It is misguided. I pray we don’t go there. I can think of nothing that would do more damage to our nation’s prosperity.”
I would like to modify his last sentence to reflect what he’s actually thinking: “I can think of nothing that would do more damage to Wall Street’s prosperity, for which we central bankers are obligated to protect.”
Tags: Audit the Fed, Federal Reserve, Fisher, Wall Street