Former presidential candidate, physician and Congressman Ron Paul (Republican-Texas) introduced HR 1207 with the name "Federal Reserve Transparency Act of 2009", but known to its many supporters as the Audit The Fed bill. Not suprisingly, Federal Reserve Board Chair Ben Bernanke has sought to prevent its passage. In the House of Representatives it now has 282 co-sponsors, a majority of the Members. It has been introduced in the Senate as S. 604. It provides for audits of the Federal Reserve by the Comptroller-General.
Bernanke and his supporters have contended that the bill would lead to politicized second-guessing of the Fed’s decision-making on monetary policy.
Examining the bill itself at http://www.govtrack.us/congress/billtext.xpd?bill=h111-1207, one can read the text and find little to support such a statement. Moreover, it is not as if the Fed’s decision-making was not politicized already. For example, the Federal Reserve under Arthur Burns increased the money supply to depress interest rates in the runup to President Nixon’s reelection campaign in 1972.
When I studied public finance with then Professor (now retired) C. Lowell Harris at Columbia, we learned the sound principles of accountability and transparency. Ron Paul’s Audit The Fed bill brings a most needed accountability to bear on the monetary policy of the USA. One could support this legislation without sharing the monetary policy views of its author or me. -30-
About the author: Richard Cooper is an international trade executive with a manufacturing firm on Long Island, New York, USA. He is active in the Libertarian Party on eminent domain and other issues. He was chair of the Libertarian Party of New York www.ny.lp.org In 2008, he ran unsuccessfully as a Ron Paul delegate candidate in the New York Republican primary.
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