Auditing vs. Politicizing

• Audit the Federal Reserve?  A recent Rasmussen Reports poll found that 75% of Americans favor auditing the Federal Reserve.  Opponents fear politicizing the actions of a Central Bank.  Both sides have very real and very legitimate concerns, but I believe transparency outweighs potential politicization.

  In theory, the “Fed” as it is called, has noble goals.  Stabilizing the money supply, ensuring banks are stable, and engaging foreign monetary and banking institutions for the good of the global economy.  In short, the Fed controls the money supply.  But with such power, the Fed has also been given unbelievable authority while maintaining virtual anonymity.  In and of itself, unchecked authority and lack of transparency are a recipe for disaster.

  The great Milton Friedman once said, “The Federal Reserve definitely caused the Great Depression by contracting the amount of money in circulation by one-third from 1929 to 1933.”  A fantastic interview he gave can be read here.  That, in a nutshell, is what the Fed does; expand and contract the money supply.  Recently, however, the Fed has intervened to “bail out” firms such as AIG and Bear Stearns.  (For a good article on why the current crisis is not a liquidity crisis and is more a perception crisis, see Newsweek here)  The decisions of the Fed affect all Americans as we have seen in our current recession.  Surely, you may ask, something with that much power is open to the taxpayer.  Unfortunately, the answer is no and that is why more than 282 Members of Congress have signed on to HR 1207, the Federal Reserve Transparency Act of 2009, and, if I am elected, why I will sign on as well.

  Now, many argue that such an audit is unneeded.  They argue that the Fed is already audited by the GAO, although their open market committee is not.  This is to prevent politicizing monetary policy.  However, in such times as these, when trillions of dollars of debt are being added to our children and grandchildren, accountability and not a blank checkbook is needed.  Taxpayers deserve to know not only WHAT is going in and out of the Fed, but more importantly, WHY.  Provide the nation the reasons behind their actions.  Who knows, a majority of Americans might agree that these steps were needed, but they may not.

  In the end, auditing an entity with the power to punish our children with mountains of debt, is a moral obligation of this generation.  While the Fed deserves its audit, so does Congress.  Spending, both under the current administration and the former administration, and under the current Congress and the former Congress, remains a disgrace.  Market manipulation through Fannie Mae and Freddie Mac, social engineering of the housing market by Barney Frank, and now, talk of socialized health care, are just more examples of a city and a group of people disconnected from reality.

  Today, when Congress wants to buy hundreds of millions of dollars worth of private jets, we, the taxpayers have to ask ourselves how much more can we take?  In 2010, let us not forget.  I have not forgotten, nor will I ever.  It is time to take our Country back.