Earlier this week the Obama administration proved once again that it is incapable of true change by giving Federal Reserve Chairman Ben Bernanke four more years to devalue our dollar, make secret deals, and do whatever other things it is the FED does. I would tell you just what those “others” things are but I don’t know myself. Heck…even Congress doesn’t know.
You see, the FED is an institution cloaked in secrecy and accountable to no one. It has never been fully audited in its nearly 100 year existence. But, hopefully, that will soon change as Dr. Ron Paul has introduced a bill in the US House currently sporting 282 cosponsors, while the Senate version is cosponsored by 23.
Still with transparency nipping at the FED's heels from a congress frustrated by a lack of accountability, Bush appointee Ben Bernanke, whose time at the FED has been nothing more than to make the bad worse, has just received the administration’s seal of approval.
Let’s forget for a moment the constitutional implications of what is going on with the FED. (As Jefferson and Madison both argued, a central bank is unconstitutional!) The damage of Bernanke’s reappointment points to a dangerous thread in the current administration’s actions on a practical level. The CATO Institute’s Mark Calabria took the words out of my mouth when he noted, “Re-appointing Bernanke sends the worst possible message to both the American public and to government in general: not only will failure be tolerated, it will be rewarded.”
One final note is needed before I leave you.
Congress is upset with the FED’s lack of accountability. Democrats and Republicans…liberals and conservatives are upset with Bernanke and the FED’s transparency-lacking actions. So am I. But when we act unconstitutionally, we must understand that there often will be huge negative consequences.
Article 1 Section 8 of our Constitution gives Congress the sole power over monetary measures. But in 1913 the Congress cast off that responsibility to the Federal Reserve. They created a monster, and now that monster is a hard one to tame.
What’s for sure is this: President Obama is unwilling to behead this monster, and by being so, he has sent a dangerous message to the American people and to the World.
Daryl, my only question for you is the following: if you were to get rid of the fed, how would you keep politicians from manipulating the monetary supply to their benefit?
ReplyDeleteThere are two short answers that come to mind.
ReplyDelete1)The way we always keep politicians accountable: the electoral process. We may, like is often the case, fail to do so. But, in that case, we have ourselves to blame. As it stands now, the FED chair is unelected, while he serves the interests of the firms it represents. That may not be a bad thing; so let's find out if it is through an audit.
2)The FED has only existed since 1913. So for most of our history we depended on Congress not the FED. Since we have switched to FED control two things have persisted: rising inflation and devaluing of the dollar. This is not a good thing by any stretch of the imagination.
It is also important to note that mass politicization exists currently with the FED. To keep his job the FED chairman seeks to create short-term false "prosperity."
The FED manipulates the monetary supply for political reasons already--and with no accountability to the citizenry.
Thanks for the question.