“For years I have sponsored legislation that would call for an audit of the Federal Reserve system,” a Washington lawmaker said on January 23, 1995. “I think it would be interesting to know about the Federal Reserve. I think we should audit the Federal Reserve.”
Ignore your assumption from that quote. That lawmaker was not Ron Paul. Paul was out of office at the time, practicing medicine in Texas. The Fed opponent who gave that speech on Capitol Hill 17 years ago was Harry Reid, today’s senate majority leader who refuses to bring Paul’s Federal Reserve Transparency Act to the senate floor, despite its overwhelming bipartisan support in the House of Representatives. The fact is the senator was right then and wrong now and should, along with other colleagues who oppose the bill, have their anti-transparency arguments analyzed for what they’re worth.
Reid’s blatant flip-flop is not the only head scratching opposition to a bill that is designed to directly do nothing more than promote transparency. House minority whip Steny Hoyer, another major dissenter of the bill, argued before the vote in the house that an audit would sacrifice the Fed’s independence and add ‘political pressure,’ something that he says central banks should not have. But if forcing the Fed to open their books is ‘political pressure,’ then a majority of the American people must be in favor of more politics, by Hoyer’s logic. A 2009 Rasmussen poll showed a whopping 75 percent of Americans support the audit of the Fed, which should not come as a major surprise considering the American people generally want more transparency across the board, especially when it comes to their money.
Reid, Hoyer and others do not have much of a good explanation to oppose transparency. Transparency is pretty much an idea that transcends party lines. Even establishment Democrats like Reid and Hoyer who subscribe to Keynesian economic thinking should be fine with an audit, because they should see it as a chance to justify central economic planning and prove there are no shenanigans inside the secrecy of America’s central bank. But as I mentioned briefly last week, this piece of legislation has the chance to bring up a really serious issue and force more people to consider monetary policy. Therefore, the stand against promoting transparency could possibly be to cling onto economic ideas that would be seen as failures if the Fed were exposed, as well as a preservation of an election year narrative and ultimately the status quo. Democrat opponents of Fed transparency could really just be trying to block this bill to avoid an issue that can in no way help them in November, though that is just speculation.
It’s a shame the Federal Reserve Transparency Act is not getting more attention in the mainstream televised media. The attention would really force the dissenters and their weak arguments to step up to the plate and explain why they disagree with the majority of the public and would rather promote more secrecy. Reid went onto say in his 1995 senate floor speech that ‘no entity in the world affects our lives more than the Federal Reserve’ as he continuously labeled the bank as ‘secret.’ That fact has not changed, but Reid and his view have. Whatever the reason the senate majority leader, the house minority whip and 98 other representatives have for arguing against the promotion of transparency, it should receive the attention it deserves as a weak case lacking substance.
The American people are usually all for transparency and accountability in government, as they clearly are with this issue. Some lawmakers just need to be pressed harder for better reasons why they are not right there with them.