ote growth. Truth be told, I've been of the opinion that it has played a part in all but eliminating the 10 - 15 year cycle of boom, panic and collapse that has plagued our economy since the Washington administration. Maybe it has but maybe, as the Congressman claims, it's been the cause of inflation and a drag on growth. Maybe there's a better way and I'm the first to admit I don't know.The idea of an independent Fed is a fallacy, says the man from Texas. The allegedly independent Fed has
" far too much authority to make agreements with foreign governments and central banks, or create temporary liquidity facilities"and of course the Chairman and governors are appointed by the President and will reflect his politics, but the question of whether it is a good solution, a bad solution and more importantly whether we should have a Federal Reserve Bank at all isn't easy to answer and it isn't easy to discuss because of the political passions and partisanship involved. Everyone thinks he's an economist these days. Of course, supporter or detractor, we really don't know exactly what the Fed is doing anyway, not even today with the huge amounts of money being moved around in the dark.
'Let's have an audit' is Ron Paul's simple suggestion and one would think that at a time when the government has the power to audit anyone; to investigate, spy on, wire tap, seize assets and records, imprison without charges and even pour water up your nose, the answer would be "why the hell not?"
"What possible arguments exist against this bill? Who opposes an audit of the Fed's activities and why?"asks Glenn Greenwald in Salon.com. "It would interfere with the Fed's independence" says Forbes in rebuttal and stresses that monetary policy is too complex for simple minded congressmen. Maybe it is, but maybe it's too complex for the Fed too and more than maybe; the lingering appearance of impropriety, if not incompetence, can finally be confirmed or dispelled by a little bit of transparency.
I wouldn't dare pass myself off as an economist and I'm not going to see this along party lines because I don't trust either side, particularly in this atmosphere of secrecy, but if an "independent" Fed means a Fed that operates in the dark, according to its own rules and politics, I'm with Congressman Paul. I want to see the books and you're going to have a lot of 'splainin to do to talk me out of it.
Perhaps I can use the words of surveillance supporters against the government for once: if you've got nothing to hide, you've got nothing to fear.
I too am not an economist but I consider myself of reasonable intelligence and see no reason why the Fed can't explain to we taxpayers how the bank works and why we need it.
ReplyDeleteThis administration was supposed to be all about transparency. So. let the sun shine in!
"Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity (...) are in a state of shocked disbelief -- Alan Greenspan
ReplyDeleteA contradiction in terms when a self-avowed libertarian is put in charge of a regulatory body.
During the later years of the Clinton administration, Greenspan punished productivity by pushing interest rates higher when there was no justification. In the early Bush years, Greenspan did the opposite and created the sub-prime bubble. When you have a libertarian-chameleon as Fed chairman, you get a contradictory policy that achieves the opposite of what was originally intended.
I've never been a Greenspan fan, but I wish some of that shocked disbelief would spread far enough to make people question what apparently doesn't work as advertised.
ReplyDeleteI don't know whether to blame the entire concept of the Fed or the way it's been run, but I still want to see the books.
"the way it's been run ..."
ReplyDeleteWhen successive Republican administrations appoint ideologues and sycophants to federal posts, this is what you get.
Having tracked the lunatic fringe for years, I was interested to see how the Ron Paulites picked up on opposing the Fed last year. As a result, the idea's nearly become mainstream, along with a return to the gold standard.
ReplyDeleteThese kinds of fringe ideas thrive on the secrecy of institutions, and for that reason I'm very much in favor of regular ten-year audits of the Federal Reserve. Which is to say that such auditing would dispel a lot of the nuttery out there, including Dr. Paul's.
I think you've hit it on the head Matt. I was interested to see how this post in another venue drew fire for my having written that I sometimes see Paul as simplistic.
ReplyDeleteApparently the entire purpose of the Constitution is to eliminate government and Paul speaks nothing but the complete and all-seeing truth.
Actually, I like Ron Paul and I like him for his simplicity and the consistency of his argument.
ReplyDeleteWe seem to settle too much for compromise and pragmatism and end up with nothing but mush as policy and with leaders who are more managers than statesmen and political debate that is more mud slinging.
Most of what passes as conservatism today should be supporting Ron Paul but they don't because of conservatism is not about being FOR anything its just about being against everything.
Ron Paul has ideas and a positive perspective which is alot more than you can say for anything else the Republicans have floated out there today.
I like him too and for reasons like the idea in question: let's look at the books. Nice and simple, but not everything is simple and lends itself to perfect function by leaving it to "market forces."
ReplyDeleteEvery time I challenge the doctrine of minimalism, I'm confronted by further declarations of the doctrines of minimalism and not by real world observation and I'm yet to be convinced that a game without rules isn't just a con game.
Oh Capt. Fogg, "...a game without rules isn't just a con game." That pretty much sums everything up in a nutshell and it is the archilles heel of the whole concept of libertarianism.
ReplyDelete