“Audit the Fed” Bill Gutted; Ways to Take Action
November 14, 2009 · Posted in General Economics
As Ron Paul recently pointed out, and as was unfortunately expectable, there are forces at work in Congress that attempt to prevent a meaningful audit of the main culprit of the financial crisis:
Representative Ron Paul, the Texas Republican who has called for an end to the Federal Reserve, said legislation he introduced to audit monetary policy has been “gutted” while moving toward a possible vote in the Democratic-controlled House.
The bill, with 308 co-sponsors, has been stripped of provisions that would remove Fed exemptions from audits of transactions with foreign central banks, monetary policy deliberations, transactions made under the direction of the Federal Open Market Committee and communications between the Board, the reserve banks and staff, Paul said today.
“There’s nothing left, it’s been gutted,” he said in a telephone interview. “This is not a partisan issue. People all over the country want to know what the Fed is up to, and this legislation was supposed to help them do that.”
The Fed, led by Chairman Ben S. Bernanke, has come under greater congressional scrutiny while attempting to end the financial crisis by bailing out financial firms and more than doubling its balance sheet to $2.16 trillion in the past year. The central bank is also buying $1.25 trillion of securities tied to home loans.
Paul, a member of the House Financial Services Committee, said Mel Watt, a Democrat from North Carolina, has eliminated “just about everything” while preparing the legislation for formal consideration. Watt is chairman of the panel’s domestic monetary policy and technology subcommittee.
Keith Kelly, a spokesman for Watt, declined to comment and said Watt wasn’t immediately available for an interview. Watt’s district includes Charlotte, headquarters of Bank of America Corp., the biggest U.S. lender.
Paul said he intends to introduce an amendment to the bill when it comes to the House floor for a vote restoring the legislation’s original language.
Representative Barney Frank, a Democrat from Massachusetts and chairman of the committee, said in interview that he intends to ensure legislation would provide a time lag between FOMC actions and the reporting of them.
Such a provision would “lessen the market impact,” he said on Oct. 20. “The importance is to see that there are no abuses and to judge what they did.”
The legislation will probably be included in a broader Democratic package of financial-regulation changes in the House, Frank said.
I should remind you again of past disagreements between Barney Frank and Ron Paul:
… but you’re not going to see the [housing] collapse that you see when people talk about a bubble and so those of us on our committee in particular will continue to push for home ownership…
Thanks, Barney, for admitting, at least back then, that you were on the forefront of pushing for excessive home ownership and thus being instrumental to the housing crisis. Would you come forward today and say the same things? But then, I guess, nobody could see this coming, right?
Nobody? Here’s Ron Paul in 2003:
The special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital that they could not attract under pure market conditions. Like all artificially created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing, the damage will be catastrophic.
… who would you rather listen to?
Today we know the tragic consequences of such foolishness. Unfortunately people continue to put these people in charge. We have to deal with that reality for the time being and take action. This I received today from the Audit the Fed Coalition:
Dear Supporter of Transparency,
You and I face our biggest challenge yet.
Mel Watt (D-NC), Chairman of the Monetary Policy Subcommittee, has sided with Fed and is working to gut substantial audit provisions from HR 1207. The bill Congressman Watt has sent to the full Financial Services Committee contains no audit of the Fed’s monetary policy-making authority or transparency of the Fed’s secret agreements with foreign central banks.
Without these provisions, a so-called “audit” of the Fed would be worthless.
The full Financial Services Committee is likely to vote on this bill either later this week or early next.
Congressman Ron Paul will offer an amendment to restore the provisions contained in HR 1207 to audit monetary policy and activity with foreign central banks. Thirteen of the 41 Democrats and all 29 Republicans on the Committee have cosponsored HR 1207, and if they hold the line, we will have the votes to win and restore our audit.
Pressure on the Democrat House Financial Services Committee members is critical! Below is a list of Democrats who have cosponsored. Please call them and urge them to vote “Yes” on the Paul Amendment. Click on their names to get their web contact information.
1. Rep. John Adler, NJ (202) 225-4765
2. Rep. Travis Childers, MS (202) 225-4306
3. Rep. Steve Driehaus, OH (202) 225-2216
4. Rep. Alan Grayson, FL (202) 225-2176
5. Rep. Rubén Hinojosa, TX (202) 225-2531
6. Rep. Suzanne Kosmas, FL Toll Free: 1-877-956-7627
7. Rep. Dan Maffei, NY (202) 225-3701
8. Rep. Brad Miller, NC (202) 225-3032
9. Rep. Walt Minnick, ID (202) 225-6611
10. Rep. Ed Perlmutter, CO (202)-225-2645
11. Rep. David Scott, GA (202) 225-2939
12. Rep. Brad Sherman, CA (202) 225-5911
13. Rep. Jackie Speier, CA (202) 225-3531
When contacting these members, remember that up to this point, these members have been allies on this issue. A civil yet firm tone should be kept during these calls. They should be thanked for their cosponsorship, told that Mel Watt’s changes to the bill are unacceptable, and urged to hold the line and honor their promise to support transparency at the Fed by voting “Yes” for the Paul amendment.
It is also important that we contact Financial Services Chairman Barney Frank and House Speaker Nancy Pelosi and urge them to schedule a standalone, up or down vote on the real Audit the Fed bill.
Rep. Barney Frank: (202) 225-5931
Speaker Nancy Pelosi: (202) 225-0100
Now is a crucial time for Audit the Fed. If these 13 Democrats hold the line, we can win this battle. But, they must vote “Yes” on the Paul amendment when the full committee votes.
The Audit the Fed Coalition
The Federal Reserve bank is an institution that exists without any moral, legal, or economic justification. It has been at the center of creating this financial crisis. It is at the center of the fraudulent fractional reserve banking system. It has created a banking cartel that represents the pinnacle of arrogance, irresponsibility, and corruption in our society.
All major problems over the past 96 years can be traced back to the Fed. It needs to be audited, exposed, and closed down. Whoever tries to prevent an audit in such a shady, cowardly, and secretive manner as Mel Watt needs to hear from those who deserve to know what is happening to their money: We, the people.