Show me the money

By Capt. Fogg

Sometimes I think Ron Paul's ideas may be too simplistic. This isn't one of them. In a Forbes editorial last week, Congressman Paul called for an audit of the Federal Reserve Bank. Paul of course, doesn't buy the idea that the Fed is necessary to keep inflation low and to promote 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 at Salon.com. "It would interfere with the Fed's independence," says Forbes in rebuttal, stressing 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.

(Cross-posted from Human Voices.)