That odd sound you hear is the baying of Keynesian economists, howling with indignity at the effrontery of Senator Rand Paul to propose scrutiny of the Federal Reserve (S. 264, “The Federal Reserve Transparency Act of 2015”, and its companion bill H.R. 24 introduced by Rep. Thomas Massie). Ralph Benko previously noted that Wall Street and liberal economists have their knives out to savage Rand Paul and protect the Federal Reserve’s fantastic and undemocratic prerogatives.
The real significance of Senator Paul’s proposal is the removal of a prohibition against the Government Accountability Office analyzing and critiquing the monetary policy of the Federal Reserve.
Today Elizabeth Warren, the great liberal hope, joined up with Wall Street and 20th Street NW to shield the Federal Reserve from scrutiny by the GAO.
Senator Warren told the Huffington Post: “I oppose the current version of this bill because it promotes congressional meddling in the Fed’s monetary policy decisions, which risks politicizing those decisions and may have dangerous implications for financial stability and the health of the global economy.”
What the bill risks is that an honest appraisal of recent Federal Reserve policies will lay at its feet not only responsibility for the pathetic rate of recovery from the previous recession, but a hand in causing the recession of 2007 which in turn led to the banking crisis of 2008.
The American people are still suffering from the dysfunction of our economy. Monetary policy is too important to be conducted behind closed doors by a star chamber; it is high time for Congress to debate the appropriateness of our current policies. You would think that a “progressive” such as Senator Warren would be on the side of American middle class on this one.
Steve Wagner is the founder and president of QEV Analytics, a Washington DC -based public opinion research firm.