Date: July 21, 2009
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I’d like to give you an update on our efforts to get the Federal Reserve audited. Things are coming along quite well. As a matter of fact, a little bit better than I have ever anticipated. With 272 members of the House now supporting it and 13 members of the Senate, that’s doing pretty well. In the House, there are 95 Democrats that have supported it, as well as two in the Senate, so things are coming along quite well.
But it makes me think about what happened in the 1970s, the last time we had a major economic crisis, there was an effort to go after the Fed and in 1978, it was the law passed that said that the Fed could be audited, “except for” and they put all those provisions in that we’re planning to repeal, at least we’re going to make that effort.
So although there is tremendous grassroots pressure for auditing the Fed, we see that the big guns are coming out. Now, they’re trying to line up the establishment economists and other business people to warn people about the great danger of the American people finding out who is benefiting from behind-the-door scene activities of the Federal Reserve.
So this is what we have to be aware of and, of course, I have a responsibility to try to keep up as closely as possible to see how this finally comes out because I think it’s going to be impossible for them just to ignore everything we’ve done and just walk away. Something will be done. The big question is, will we be able to get something worthwhile.
In the Senate now, we’ve been very pleased. There’s not quite as many, but that’s where a lot of work has to be done. So if your congressman already supports it, there’s nothing wrong with asking your senators to support this effort.
But I did want to mention one individual who did help spur us on in this, and this is Mr. Spencer Bachus, the ranking member for the Republican Party on the Financial Services Committee. He got on the bill rather early and the rest of the members of the Financial Services Committee on the Republican side got aboard and this was a real help in getting the leadership of the Republican Party to join us and finally leading to everyone endorsing this effort.
But this process is very important and I’m sure the subject is going to come up tomorrow. Tomorrow on Tuesday, Bernanke will appear before the Financial Services Committee on one of his bi-annual visits to Financial Services. As a ranking member of the Monetary Policy Subcommittee, I will get an extra three minutes. You can’t change the world in three minutes, but I’ll do my best to draw attention to the real problems that we’re facing.
Just as well, I get five minutes also for questioning Bernanke and the challenge always is how much information can I get out versus how much free time can he get from me to try to undermine what we’re trying to do. It seems like the consensus is now from the establishment and from the Federal Reserve that they will concede some of our requests, but they don’t want monetary policy looked at in any way whatsoever, which is maybe the big issue. They will concede looking at some of these lending facilities that were instituted during the crisis, but on the monetary policy where they deal with discount windows and reserve requirements and agreements in this way, they don’t want it to be touched and their argument is that proprietary information of these banks shouldn’t be public.
But if they’re getting public money, the American people deserve to know who is getting it and why. This idea that private companies deserve to be kept totally secret and at the same time get big loans and special privileges from the Federal Reserve, which is outside the realm of what the Congress does, I don’t quite agree with that.
But I think there will have to be a full discussion on that and that’s what we are doing right now. We’ve had some token hearings in the House. There may be some more, but whether there will be one specific day to deal only with HR 1207, that’s yet to be seen.
But my guess is that this reform of the Fed will be put in as a mixture on a total financial reform package, which they’re working on. But believe me, the people in Washington, the people at the Fed and the establishment are very, very much aware of this grassroots effort. They can claim a hundred or so pseudo-economists who claim the American people shouldn’t know anything about the Fed, but to tell you the truth, I believe there are millions and millions of Americans who absolutely demand that we know what’s going on with the Fed and I think all Americans would demand it if they knew exactly what is going on and what has been going on and how powerful the Fed is.
So my goal is to keep up this momentum and do our very best to work for the reform of the system, so that we have a sound monetary and financial system where economic growth can be steady, instead of going through these cycles of recessions and depressions and inflations and special interests being bailed out at the sacrifice of the middle class.