Congress’ Widening Anger With The Central Bank
Ron Paul’s legislative history is a lesson in principles. Among the bills he has co-sponsored: ending U.S. cooperation with the United Nations, a repeal of antitrust law to restore the inherent benefits of the market economy, stripping the government of the right to set a minimum wage, and repeal the Gun-Free School Zones Act of 1990. For Paul, ideology always trumps politics.
His perennial efforts — shifting the country back toward a gold standard, abolishing the personal income tax, and dismantling the Federal Reserve Bank (A private corporation – NOT government) — are legendary. They would reverse the socialist onslaught of the liberals which the Democrats in congress don’t want.
Which is why Paul’s most recent legislative accomplishment is so impressive. He has rallied the majority of the House to support an audit of the Federal Reserve. Legislators are sick of not knowing what’s going on inside Bernanke’s fortress, especially as the Fed becomes further enmeshed in the nation’s fiscal policy. Paul’s bill has become emblematic of a larger movement, one that could spell trouble for Obama’s troubled regulatory plan.
Ron Paul — always an enemy of regulation — is now an enemy of Obama. And a mighty powerful one at that.
Paul wants to audit the Federal Reserve primarily because he wants to destroy it; the audit bill is just the latest chapter in Paul’s lifelong crusade against it. His campaign is fueled by the fact that the Federal Reserve is a central bank within a country that doesn’t allow central banks. This private group of bankers, the Federal Reserve, can manipulate the currency and “create legal tender out of thin air.” And so Paul attempts to dismantle it the only way he can: through legislation.
Thus we come to the audit. For Paul it’s a foot in the door to a much larger goal. To the 244 co-sponsors — 74 of them Democrats — it’s a way to show their constituents that they’re worried, too, about where taxpayer dollars are going. The distrust of the Fed has reached a point at which a majority of House members are demanding an audit. Congress’ frustration was evident last month when Bernanke got roasted in front of Congress, putting his future as Fed chairman and the health of Obama’s regulatory plan in doubt.
Obama’s proposal is to make the Fed a super-regulator; one that can both intervene and interfere whenever necessary. It would keep tabs on all the financial institutions — banks and insurers. But the Fed is partly to blame for getting us into this mess, and its track record when trying to cushion a bank’s fall is suspect.
This is where the trouble begins. The Obama administration hasn’t promised to make the Fed any more transparent despite making it all the more powerful.
Already over the past year the Fed’s role has become as large as the financial crisis was urgent. Yet we don’t know anything more about how the Fed does its business now than we did before it started guaranteeing trillions of dollars of assets. The Fed’s responsibilities have matured, but its personality has not. It is still the spoiled child that can do whatever it wants — and its parents are still so in awe of its intelligence that they don’t ask any questions.
The audit bill would change that; Obama’s regulatory plan would not. The Obama administration has offered typical platitudes about accountability but doesn’t have specifics about how it would work. Ironically, a regulatory plan that’s all about increased openness and transparency for the markets fails to apply the same standards on its newly empowered regulator.
And so we’re building toward a very interesting clash within the financial and political communities. Think of it as a math proof: Because of Ron Paul and the audit bill, we already know that Congress doesn’t like the Fed. It feels this way because of the relationship between two variables: power and accountability. The Fed has too much power and too little accountability. Congress believes the two variables should have equal values. They do not, so Congress does not approve. Now, if you give the Fed more power but not more responsibility, this is going to make Congress upset. So upset that they may not pass the new regulatory legislation.
Obama needs Congress on his side for a host of other leftist legislation. But if he makes the Fed more accountable, they become even more a part of the government than it already is. The problem – the Fed is a private corporation that isn’t supposed to be a part of the government.
But something has to give. Congress, 244 of them, is fed up. They’re ready to kill something. Hopefully, it will be Obama’s regulatory plan. Then again, with Paul leading the charge we can hope it will be the Federal Reserve! Never underestimate Ron Paul.