Audit the Fed is Not Enough

There’s a lot to admire in Alex Pollock’s Saturday piece in The Wall Street Journal, “It’s High Time to ‘Audit’ the Fed.”  Pollock, a longtime chief executive of the Federal Home Loan Bank of Chicago and currently a resident fellow at the American Enterprise Institute, attacks the faulty premise that the supposed “independence” of the Fed should lead Congress to forgo the wide-ranging audit called for in current legislation. In reality the Fed is a creature of Congress, which in turn is an elected institution specifically tasked in the Constitution (Article I, Section 8) with coining money and regulating its

Just Audit the Darn Thing

It has $4 trillion in holdings…close to one quarter of the U.S. GDP. The markets flip out anytime it even hints at making a move. It enabled the housing bubble and, in large part, the Great Recession that followed its bust. It has less oversight than a local pizza restaurant. (I’d know.) It’s time to audit the Federal Reserve. I don’t care what former real estate and development moguls like Tennessee Sen. Bob Corker say. We need transparency. Opponents of auditing the Fed say that doing so will disrupt the economy and cause harm to the markets. What does that tell you

Bankers versus Rand Paul?

Five of twelve regional Fed presidents have formally opposed Audit the Fed, and now Reuters reports: A Reuters survey of 24 state banking groups has found that four are actively opposed to Audit the Fed and five would probably take a stand against the bill if it gains more support, giving the central bank an influential ally as the Fed ramps up its own public opposition. . .[T]he Ohio Bankers League. . .is sending 82 members to Washington this week [to oppose the bill]. Meanwhile, as previously reported, Sen. Elizabeth Warren has flip-flopped, recanting her support for Audit the Fed. It is

Will Paul Get Serious About the Federal Reserve?

This is not another in a long line of often vitriolic attacks on Senator Rand Paul for his temerity to propose “auditing the Fed.” As is by now well-recognized, his proposal (S. 264, “The Federal Reserve Transparency Act of 2015”) is not about auditing the fed, but about subjecting Federal Reserve monetary policy to critique by the Government Accountability Office. The importance of Senator Paul’s proposal is that it is the beginning of a response to the principal economic concern of the American people:  their declining standard of living owing to the erosion of the purchasing power of the dollar. 

Why the Fed is Under New Scrutiny

The Hill reports: The Federal Reserve is pushing back against mounting criticism of the central bank, as those pushing for reforms ratchet up their attacks. . . The uptick in outreach from the independent agency signals an effort to quell calls for significant changes at the Fed and assuage concerns that it has become too opaque and too cozy with Wall Street. Even some independent observers are puzzled by the highly visible push back from the Fed: “It almost seems like they’re running scared,” said Vern McKinley, an attorney who advises governments on central banking policies. “It’s beneath them to be doing

Why Did Warren Denounce “Audit the Fed”?

Steve, The Hill is reporting Elizabeth Warren had a private lunch with Federal Reserve Chair Janet Yellen in December: A Warren representative declined to describe what was discussed at the meeting between Yellen and Warren, who frequently criticizes Wall Street. But not the Fed, apparently. Maggie Gallagher is editor of

Warren Now Opposes Audit the Fed

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

Rand Paul Draws Liberal Fire Over Audit the Fed, Part Two

Sen. Rand Paul is drawing liberal fire from many left wing commentators, now including Prof. Paul Krugman.  Many of the criticisms are badly off base. As noted in yesterday’s column there is so much simply factually incorrect about The New Republic‘s Danny Vinik recent Rand Paul Has the Most Dangerous Economic Views of Any 2016 Candidate— for example — that one hardly knows where to begin. Vinik by no means is the only commentator to go into hyperbolic meltdown over Rand Paul. Nobel Prize economics laureate Paul Krugman, recently, in Money Makes Crazy: Right now, the most obvious manifestation of money madness