A number of sites are on the story, I shall use Bloomberg, online, here:
The House Financial Services Committee today, in a 43-26 vote and a second voice vote, attached the amendment for a broad audit of the Fed to legislation creating a council of regulators to monitor systemic risk. The proposal was offered by Representative Ron Paul, a Republican from Texas, and based on a bill with more than 300 co-sponsors.
Fed Chairman Ben S. Bernanke has opposed the Paul legislation, saying it may result in interference with monetary policy. The panel’s vote increases the possibility that Congress will reverse the ban on audits of interest-rate decisions. The broader bill on financial regulation is subject to a vote by the committee, then must be approved by the House and Senate and signed into law by President Barack Obama.
“It’s going to be seen as weakening the independence of monetary policy with consequent negative implications,” Barney Frank, the Massachusetts Democrat who chairs the committee, told reporters after the vote. “People are going to be worried about the impact on the dollar, on the interest rate.”
Frank, who opposed the Paul measure, said the issue “may be revisited” when the legislation reaches the House floor.
“This is the bill that would allow the people to win over the special interests,” Paul said during debate on the measures today. “There is no doubt that the individuals opposing this amendment represent the secrecy of the Federal Reserve.” An audit “shouldn’t hurt them in any way,” he said.
‘End the Fed’
Paul, who wrote a best-selling book this year titled “End the Fed,” said provisions in his amendment would limit interference in monetary policy. The measure, co-sponsored by Representative Alan Grayson, a Democrat from Florida, would exclude any unreleased transcripts or minutes of Fed policy meetings. It calls for an audit of the Fed and its 12 regional banks within a year after enactment.
The committee voted first, 43-26, to substitute Paul’s proposal for a Democratic measure to retain the ban on audits of monetary policy while requiring more limited audits. About one- third of Democrats joined the unanimous Republicans on the vote. Then, in a voice vote, the committee attached the Paul measure to the broader bill.
Frank said he expects to finish the legislation in committee on Dec. 1, delaying a vote he had scheduled for today until after lawmakers return from the Thanksgiving holiday. He supported a competing measure from Representative Mel Watt, a North Carolina Democrat, to retain the ban on auditing monetary policy.
Inflation Expectations
“Perception is very important in monetary policy,” Frank said. He said he was concerned that “inflationary expectations will be given a boost if we adopt the Paul” measure.
Michael Feroli, an economist for New York-based JPMorgan Chase & Co. and a former Fed researcher, said the central bank “should do whatever it takes to stop this from going forward and eroding confidence in the Fed’s independence.”
Well, Barney Frank speaks well and is quite bright, but he favored the Bush-Paulson bailout of Big Wall Street while the economy sucks and he seems to care little about that. His alliances are consonant with chairmanship of a committee that ostensibly regulates Big Finance, but appears to have been co-opted by the target. Much of the trouble in DC in the legislative houses and the White House seems to involve such ownership of a bigger stake in things than the people hold, with that consistency you can count on reaching through Reagan-Bush, Clinton, Bush II, and apparently now Obama.
Basically the Fed is a bank controlled by Big Banks, for the benefit of Big Banks and that means they have to get their money somewhere - so go figure - little banks, ordinary people, go figure.
It was not the community banks that securitized mortgages and traded in credit default swaps without enough money in the hold to cover the things, downside. That was AIG, Goldman, Morgan interests. And pension funds and such took the hit. Somebody had to lose money if tons of it were being raked in by Goldman.
Monetary policy - control of the nation's money is not run by the nation's government.
It is run by the nation's big banks - by Wall Street, and that's the primary opponent of auditing what the folks behind the curtain have been up to.
This is a populist, bipartisan effort. Ron Paul is a hope for the GOP, and Grayson and Kucinich are a hope for the Dems. There is hope that the hold of big business coalitions can be broken without the wild card, the religious wingnut fringe having to be a factor in reform. If they tag along fine, but their primary bleating offends common sense and good sense, and they generally are in the way of things - with the Blue Dogs.
Interesting quotes, here, including this:
"I care not what puppet is placed on the throne of England to rule the Empire, ...The man that controls Britain's money supply controls the British Empire. And I control the money supply." by: Baron Nathan Mayer Rothschild
That quote, in varying forms, has been all over the Internet, and think it over.
The Fed controls the money supply, so who fundamentally controls the nation?
Would an audit help you form an answer?
Is there any sound reason that the Treasury should not control money supply? That the government has to raise money by selling bonds, with consequent income - debt service to the banking system - for what, when the intermediation really adds nothing.
Yes, the argument is that prudence and stability are added by the expertise and restrained hand of the banker against populist and counter swings of popular and governmental policy. Great in theory. Except those special talents are exactly the ones that cooked derivative trading and securitization of all kinds of things that took the need for prudence out of banking and turned it into investor risk rather than local risk staying localized.
Think it all over. I don't pretend to have all answers. I only know I trust Ron Paul and Alan Grayson more than I trust Alan Greenspan and Goldman-Sachs.
Trust who you choose. We're all dead sometime so it's only temporary anyway.
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That Canadian site with the banking quotes also has a lot of less cogent, more paranoid stuff, so I am not saying take it wholesale, I am saying banking is as banking does. The myth and the reality are not congruent. Somebody loses when big banking and Wall Street gain. It's a zero sum game that way, so if you're not big on Wall Street, or in finance, you're the weak money at the table with the gang-up clear as to who the squeeze is upon. Or not. I could be entirely wrong.