Sorry, Chamber of Commerce, Fed Transparency Is More Important
Last week, like a parent admonishing their child, the Chamber of Commerce published a condescending attack on Senator Paul’s attempt to force a vote on Audit the Fed in exchange for votes on nominees to the Fed’s Board of Governors.
While the author acknowledged Senator Paul’s request is in line with longstanding Senate traditions, the Chamber went on to warn that Paul’s tactics could lead to economic apocalypse (of Biblical proportions, à la Ghostbusters) if the Fed didn’t have all 12 of the seats on the FOMC (Federal Open Market Committee) filled, ASAP!
Thankfully, common sense prevails elsewhere among academic types discussing monetary policy matters.
Writing at Forbes, Heritage Foundation scholar Norbet Michel points out the FOMC was fully staffed leading up to the 2008 financial crisis and that certainly didn’t seem to help matters any.
A fully staffed FOMC consists of all seven members of the Fed’s Board of Governors, as well as five Federal Reserve district bank presidents. The New York district bank president has a permanent seat on the committee, and four other district presidents rotate on a yearly basis.
So we normally concentrate the power of the Federal Reserve in the hands of 12 people. And now, with Stein’s vacancy, that power will be concentrated in the hands of nine people—this sort of reduction in force hardly portends economic disaster.
In fact, the debate over vacancies at the Fed serves only to distract us from the real issue, which is transparency at the Federal Reserve.
Michel goes on to point out that Senator Paul’s S. 209 has 29 cosponsors, and Rep. Paul Broun’s H.R. 24 has 224 cosponsors, with identical legislation having passed the House in July 2012 by a vote of 327-98.
Rather than looking at Senator Paul as an obstructionist, the Chamber of Commerce should be pointing their finger towards the other side of the aisle — squarely at Senate Majority Leader, and self-made Senate Dictator, Harry Reid. (As an aside: Since Senator Reid broke the Senate rules in November 2013 to allow for confirmation of Executive nominations with only a simple majority rather than 3/5ths of the Senate, effectively eliminating the advice and consent power, everyone with respect for long-standing traditions and rules of the Senate, and in particular the Constitution, should take to calling Reid out for what he is, a ham-fisted dictator.)
For over three years, and counter to his previous positions (including a 2010 debate with Sharon Angle), Dictator Reid has blocked any vote on Audit the Fed — despite its repeated bipartisan success in the lower chamber.
The public has every right to know exactly what the Fed does on a regular basis, even with regard to open market operations. Like any government agency, the Federal Reserve must be held accountable to Congress and, therefore, to the public.
Maybe more detailed audits will reveal absolutely nothing useful about the Fed’s past operations, but there’s no reason anything they’ve done should be kept secret. There’s also no reason our elected officials shouldn’t be held accountable to a yes or no vote on this issue.
If you believe the public should be able to know exactly what the Fed is doing to your money, then sign your Audit the Fed petition here and call your representative and senators at 202-224-3121 to demand they Audit the Fed now!