Barney Frank: Is there further discussion? The gentleman from Texas, Mr. Neugebauer.
Randy Neugebauer: Thank you very much. You know, I think one of the questions, simple questions here for many of is I think the Fed has gone way beyond just making monetary policy and that this whole bailout situation that we’ve gotten into has basically got this Federal Reserve doing some things that many of us think are unprecedented, and I think that we need some sunlight on those activities, and the gentleman from Texas, my colleague, Mr. Paul, has I think put forth a thoughtful piece of amendment that brings sunlight to that and with that I’d like to yield the balance of my time to the gentleman.
Ron Paul: I thank the gentleman for yielding and I do want to re-address the subject that keeps coming up and that is whether or not we should have transparency of the Fed and independence. The argument goes that if the Fed is audited and we know what they’re doing and who benefits, they no longer have independence in their monetary policy, but what I say is they have secrecy in their monetary policy. And the gentleman from North Carolina resists the fact that we would like to know who benefits. Up until now in the past year, the mortgage-backed security purchase program was done through the open market committee and the discount window, but we don’t know which banks benefited.
We have a right to know. We have an obligation to know. We have a responsibility to know. Why in the world would this be kept secret? And his bill doesn’t allow this to happen and he refers to 71-B as the audit authority on the books. That’s but a half-truth because as I’ve explained 71-B came about because we wanted in the 1970s to audit the Federal Reserve. But instead of giving audit authority, they did the opposite. They put restrictions on the audit authority, so the Fed actually ended up with more secrecy and that is my claim with the legislation of his that mine corrects, and that is, what we want to do is get rid of all those exemptions, not put them back in and add the exemptions and to restate also that we don’t want to monitor monetary policy. We can’t be more explicit. We’ve removed the suggestion that the GAO makes suggestions on what to do. We have indicated that we are not involved. We don’t want to look at any of the minutes or transcriptions for 180 days, so that is not the issue. The real issue is where the money goes.
This is significant. It’s significant to the American people, not only because some people benefit and other people suffer, but the way this comes about, it is not appropriated. Can you think of this? Think of the Fed being able to create a trillion dollars outside of the appropriation process. We should be aghast over that amount of power. You know, if we want the Fed and we want them to do it, why don’t we authorize their money or something, but to give them secret authority to create money and credit out of thin air, make deals with foreign central banks, deals with foreign governments, international financial institutions and corporations, and buy assets – and not even be monitored? I mean, this is… actually, this is unbelievable and yet, people argue, “Oh, yes. We have to have the independence of the Fed. If they’re independent…” But just remember, every time the word independent is used, that means secrecy. The American people are not allowed to know; even Congress gave up their prerogatives or their responsibility of auditing that which they’ve created.
The Federal Reserve was created by the Congress. They have the moral authority and the constitutional responsibility and we should be able to audit and monitor and know what is going on without making an attack on monetary policy. Quite frankly, many supporters of this bill are across the political spectrum; populists, liberals, libertarians, constitutionalists, progressives. They support this not because we have a consensus on monetary policy. No way. Because I would not, at this moment, say, “Oh, yeah. Let’s have… the system that we have now, let’s turn over the monetary policy to a majority vote in the Congress.” That’s now what this is all about. We’ve gone out of our way to make this explicitly clear that that is not it. It’s assuming the responsibility we have to know where the money is going.
Barney Frank: The time of the gentleman has expired.