By: Michael Clayton
Last Thursday, I had the pleasure of attending my first Congressional committee hearing. Janet Yellen, the nominee to be the next Fed chair, appeared in front of the Senate Committee on Banking, Housing, and Urban Affairs. I was very excited to see how the committee hearing process works and to get to experience firsthand testimony from Dr. Yellen herself. Although not yet confirmed, she is hand-picked by President Obama to become the head of the most powerful financial institution on the planet, and the markets are already reacting to her every word. Although much of what Dr. Yellen said at the hearing was expected, it was nice to hear some comments and questions by Senators who are skeptical of the Federal Reserve and its policies.
Notably, in her opening testimony, Dr. Yellen spoke about the Federal Reserve’s goal to work toward transparency:
- Specifically she claimed, “Like the Chairman I strongly believe that monetary policy is most effective when the public understands what the Fed is trying to do, and how it plans to do it.” She continued with her thoughts on Fed openness, “I have strongly supported this commitment to openness and transparency and I will continue to do so if I am confirmed and serve as chair.
- Interestingly enough, Sen. David Vitter (LA) specifically asked Dr. Yellen, “Would you publicly support S.209?”(The Federal Reserve Transparency Act of 2013, more commonly known as “Audit the Fed”)
- She again pronounced a commitment to openness and transparency while claiming that the Fed is one of the most transparent central banks in the world. But… “What I would not support is a requirement that would diminish the independence of the Federal Reserve in implementing and deciding on implementing a monetary policy.”
Wait a minute… I thought she said she was open to transparency? But of course she wouldn’t just open up the Fed’s books for Congress and the American people. When she refers to transparency, all she is promising is, as Sen. Vitter put it, more of the same “PR campaign” that Ben Bernanke has been using for the last few years. It is just a false front to convince the masses that the Fed is being more transparent, when all they are really doing is pushing a finely tuned agenda in public relations.
It also baffles me that the American people aren’t furious with the comment about the Fed’s independence from Congress. S.209 has absolutely nothing written into the bill that would give Congress (or anyone else for that matter) authority over monetary policy. Has Dr. Yellen even read the bill? It simply provides for “a full audit of the Board of Governors of the Federal Reserve System and the Federal Reserve banks by the Comptroller General of the United States.” This has nothing to do with Congressional authority over monetary policy. However, it IS an attempt to inform the American people about what the Federal Reserve is really doing with our currency. This is precisely why Fed leadership has been dodging this legislation for years. Now is the time to hold them accountable.
There are currently five members on the committee who are cosponsors of S.209: Senators Mike Crapo (ID), David Vitter (LA), Pat Toomey (PA), Tom Coburn (OK), and Dean Heller (NV) have all signed on to support the bill known most popularly as “Audit the Fed.” Of course, two other Senators on the committee, Richard Shelby (AL) and Mark Kirk (IL), have cosponsored similar legislation in the past but have yet to sign on for this go around. It is critical we get the support of these men at this crucial moment.
An opportunity to gain ground against central banking and big government only comes so often. With the vote on Dr. Yellen’s nomination to be the new chair of the Fed fast approaching, and Sen. Rand Paul threatening to block it unless he gets a vote on S.209, this is one of those opportunities. You can find a full list of Senate cosponsors for S.209 here. If your Senators are not on that list, please call them immediately and let them know how you feel. I also urge you to make your most generous contribution to our Audit the Fed Money Bomb right away so we can apply full pressure on the failed central banking system.