Audit the Fed Ain’t Happening – Libertarians, Stop Hurting Your Head About It!

Earlier I received an email from

Dear Supporter of Transparency,

According to our sources on the Hill, Senator Bernie Sanders has unfortunately given in to pressure from the White House and Chris Dodd and stripped out the Paul-Grayson language from his Fed transparency amendment.

What Sanders is now proposing is essentially the Watt amendment the Audit the Fed Coalition opposed last year in the House.

Talking Points Memo reports that, “In order to allay some of the White House’s and the Fed’s concerns, Sanders has agreed to limit the scope of what the Government Accountability Office would be allowed to audit–but his plan will still require thorough review of all the Fed’s emergency lending, beginning December 1, 2007.”

Call Senator Sanders’ office at (202) 224-5141 and tell him how you feel about this last-minute compromise.

Click here for contact information for your senators and urge them to oppose this compromise. Tell them it’s time to support a standalone vote on S. 604, Audit the Fed.

A vote could come even late tonight or early tomorrow. Let your senators know where you stand right away.

The American people deserve a full, thorough audit.


The Audit the Fed Coalition

The Wall Street Journal writes Plan for Congressional Audits of Fed Dies in Senate:

Last-minute maneuvering in the Senate allowed the Federal Reserve to sidestep legislation that would have exposed its interest-rate decision-making to congressional auditors.

Pressure from the Obama administration led Senate lawmakers to alter a provision pushed by Sen. Bernie Sanders (I., Vt.) that was gaining momentum despite opposition from the Treasury and the Fed. It would have largely repealed a 32-year-old law that shields Fed monetary policy from congressional auditors.

The compromise, endorsed by Senate Banking Committee Chairman Christopher Dodd (D., Conn.) and the Treasury, would require the Fed to disclose more details about its lending during the financial crisis. It would also require a one-time audit of those loans and a one-time review of Fed governance. A formal vote was pushed back until next week.

Thursday’s Senate showdown came after senators on the left and right joined forces to support Mr. Sanders’ provision.

“At a time when our entire financial system almost collapsed, we cannot let the Fed operate in secrecy any longer,” Mr. Sanders said. “The American people have a right to know.”

But Fed Chairman Ben Bernanke, while insisting on a commitment to “openness” at the Fed, said in a letter to Congress the Sanders measure would “seriously threaten monetary policy independence, increase inflation fears and market interest rates, and damage economic stability and job creation.”

* Letter: Bernanke Outlines His Opposition
* Letter: Volcker Outlines His Opposition

Journal Community

Deputy Treasury Secretary Neal Wolin, in a statement, endorsed the revisions to the Sanders provision, saying they would provide a comprehensive audit of the Federal Reserve Board’s operations in response to the financial crisis, “while preserving the existing protections of the Federal Reserve’s independence with respect to monetary policy.”

A House bill sponsored by Rep. Ron Paul (R., Texas) that passed in December contains a proposal similar to the original Sanders measure. If the Senate bill passes, it will need to be reconciled in a conference committee. That keeps the pressure on the Fed alive for the coming months.

The original Sanders measure stated that it shouldn’t be “construed as interference in or dictation of monetary policy.” But the Fed and administration warned that would allow auditors to interview Fed policy makers and staffers about monetary policy, thereby allowing congressional critics to pressure the Fed and undermine its independence.

Like most other capitalist democracies, U.S. politicians have given the central bank considerable latitude to control interest rates on the theory that elected politicians are prone to keep rates too low to get more growth during their terms at the cost of more inflation later. Although sponsors of legislation insisted that wasn’t their intent, the Fed and its allies said otherwise.

“It’s a chilling kind of circumstance,” former Fed Chairman Paul Volcker, an Obama adviser, said in an interview. “The more you have no clear boundaries about what’s appropriate and what’s inappropriate, you castrate the decision-making process. That’s true for any organization, but it’s particularly true when you get into the sensitivities of monetary policy that can generate speculative waves in financial markets and speculation in people’s minds,” said Mr. Volcker, who also urged lawmakers to eliminate the audit provision.
Who’s Who in the Senate Financial Overhaul

Learn more about key players in the Senate’s discussion.

View Interactive

Anil Kashyap, an economist at the University of Chicago’s Booth School of Business, stressed that independent central banks need to be insulated from politics and make decisions several months ahead of expected trends.

“There are times when you have to start raising interest rates before the economy’s recovering. If you’re going to get audited while you do that, you know you’re going to be slower—meaning we’re going to tolerate higher inflation.”

Before the last-minute compromise, the Fed’s foes appeared to be winning, and got a major boost when Senate Majority Leader Harry Reid (D., Nev.) said he would side with Mr. Sanders.

Mr. Bernanke, meanwhile, returned to Washington Thursday afternoon after a morning speech in Chicago to continue pressing for changes to the Sanders bill. In the past few days, Mr. Bernanke has spoken to at least a half-dozen senators to argue the Fed’s case that the bill would deeply damage the Fed’s credibility and ability to make tough decisions about interest rates.

At least half a dozen Obama administration officials joined the blitz, including Treasury Secretary Timothy Geithner—a former Fed official—and Rahm Emanuel, the White House chief of staff. Administration aides credited Mr. Dodd with pushing back against the original amendment and developing an acceptable alternative.

New York Fed President William Dudley also advocated to scale back the scope of the auditing. He was among those arguing that ongoing reviews of the Fed’s regular lending to financial institutions would stigmatize the program and cripple the Fed’s role as the nation’s lender of last resort.

The Senate beat back another amendment with populist tinges, defeating 61-33 a provision that would have put strict caps on the size of the nation’s banks. Offered by a bloc of liberal Democrats, it would have capped at 10% the limit on the nation’s total insured deposits any single bank holding company could carry. It would have also set a 6% leverage limit for banks and capped their non-deposit liabilities at 2% of U.S. gross domestic product.

I think it is about time to realize how ridiculously funny this whole farce is. First off: The gang that is the Congress is not going to push through measures that will seriously jeopardize its beautiful money printing machine.  It’s simply inconceivable for to happen in any meaningful way. I once thought they could, too, I have come to realize that they won’t.

The temptation of political action is enormous. I, too, fell for it for a long time. The alternatives are hard to accept and just as counter-intuitive as many libertarian solutions seem to unenlightened people in the realm of economics.

We are all perfectly aware of the mechanism of credit expansion and how the Fed is at the root of financial crises that will occur again and again. But do you seriously think president Obama or any other one of these narcissistic, self aggrandizing officials will ever give a flying rats ass?? Haha, it’s unthinkable!

An article such as the one above is just another display of the blatant and shameless lies and falsehoods that politicians and clueless academics will deliberately spread with no reservations whatsoever. We’ve heard this nonsense again and again and it’s just about time we stop pretending that this is a debate. It’s not. It’s a bunch of clowns frantically taking mental craps into the minds of a deluded populace to justify a ponzi scheme that will collapse sooner or later of its own accord. It’s funny at best. But it’s not deserving of a shred of our precious time that we could spend educating those around us about the truth and living our principles in our own lives!

By pretending that it is an intellectual debate we sanction a fundamentally corrupt process. This is not what we should be doing. We shouldn’t justify the systematic looting, theft and defrauding of the majority of the people, in short government, via attempts to participate in it. It hasn’t worked for centuries and trying it over and over again is really the mother of all abusive relationships.

The Audit The Fed efforts are a particularly tragic example. Here we are, fighting day in day out, donating enormous amounts of money, effort, etc. … for what?  In order to get the government to deign to have it’s counterfeiting institution to produce a few more pieces of paper to report Congress? Do you seriously think this is going to strip this gang off its powers even one tiny bit?? Even if it did, all it would do introduce 1000s of new “regulations” that will grant more powers.

Millions of innocent and poor people have died over he past years in unconstitutional wars, millions have been thrown in to prison cells for owning or selling some piece of vegetation, our and our kids’ futures have been mortgaged off to foreign nations, corrupt union thugs, and bureaucrats, around 40% of our income per year is taken from us at the point of a gun to support the gaping black hole that is the playground of bureaucratism, and we are fighting tooth and nail about a few pieces of paper? And on top of that, paper that will be submitted to Congress??

I think we reasonable people should not degrade ourselves like that. It costs too much time, effort, and nerves. The purpose of life is happiness. We should live our values, educate our friends and family, get the bad people out of our lives, make sure we raise loved, educated, reasonable children, and over time we will change the whole world in a way that is much more fundamental than adding to the demand for the business of paper production. :)

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Ron Paul on Audit the Fed (on Kudlow)

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Ron Paul’s Audit the Fed Amendment Passes; One More Hurdle Taken; More Battles Ahead

From John Tate with C4L:

Dear Friend of Liberty,

Thanks to your quick action in contacting Congress, the House Financial Services Committee earlier today rejected Representative Mel Watt’s attempt to hijack Audit the Fed by voting 43-26 to pass Ron Paul’s amendment to the financial regulatory reform bill.

Dr. Paul called me right after the vote to personally express his thanks to C4L members for all of your efforts!

It is an incredible testament to the growing power of the liberty movement that we were able to get such an audit passed by a major House committee, but this is by no means the end of our fight.

Financial Services leadership has seemed determined for several months that if an audit of the Fed were to get out of Committee, it should be attached to an overall regulatory reform package that would actually increase the powers of the Fed to interfere in our economy.

Congressman Paul’s amendment gives the Government Accountability Office power to conduct a thorough audit of the Fed’s entire $2 trillion balance sheet and replaces the Watt language that would have further restricted GAO audits of the Federal Reserve.

While this is a victory over an attempted hijacking of our cause, the audit authority is still being rolled into the Financial Stability Improvement Act, a bill that Campaign for Liberty will oppose.

This Act will be voted on as soon as the Committee returns from its Thanksgiving break, and we will then know if it will move to the floor.

And it’s already becoming clear that Ron Paul’s amendment may face challenges on the House floor.

Now is the time to turn up the pressure!

Keep contacting Congress and tell your representative that before Congress debates over giving the Fed any new powers, we need to know what they’re doing with the ones they already have!

Urge your representative to support a standalone, up or down vote on Audit the Fed, H.R. 1207.

We’ve put too much work into this effort to see an audit bogged down in yet another Washington bureaucratic nightmare.

Make no mistake, though, the victory today proved we can get the votes to pass the thorough, historic audit we’ve been fighting for this past year.  We have put the Federal Reserve on notice that the freedom movement is serious about reclaiming our country and that it is here to stay.

Thanks for all you do for the cause of freedom.  Now, let’s finish this fight!

In Liberty,

John Tate


P.S. Turn up the pressure!  Tell your representative you want a standalone vote on Audit the Fed, H.R. 1207.

Stay on top of this. Remain vigilant. There will be many more attempts to water down this bill and maintain secrecy of the Fed!

Here is Alan Grayson:

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“Audit the Fed” Bill Gutted; Ways to Take Action

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.

Original Language

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:

I quote:

… 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.

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Audit the Fed Hearing Tomorrow! Your help needed now!

From John Tate, President of Campaign for Liberty:

September 24, 2009

Dear Friend of Liberty,

This Friday, the House Financial Services Committee will meet at 9 am eastern to hold a hearing on Congressman Paul’s Audit the Fed bill, HR 1207.

We have come a long way in this historic effort, but your action is needed now more than ever.

Click here to find the names of the representatives on the Financial Services Committee and to get their contact information.  Even if they do not represent your district, be sure to call as many of them as you can anyway, as their work on the Committee greatly impacts every one of us.

Urge them to pass the Audit the Fed bill to the floor on its own merits and not as part of an overall package that would strengthen the Federal Reserve and further damage our economy.  Transparency in our monetary system is too important to be smothered in yet another Washington regulatory bill.

If your representative is not on the Committee, please contact him as well and tell him you want to know what the Fed has done with your money.  Demand a standalone vote on Audit the Fed and that he cosponsor HR 1207 if he has not yet done so.

The hearing will be streamed live on the Committee’s website.

This hearing would not have taken place if not for all of your hard work in calling, writing, faxing, and petitioning Congress to support HR 1207 and S 604, its Senate companion.

It’s incredible to see all the support we have amassed in this historic effort, but if we want to achieve a complete victory, we must now push harder than ever and turn the heat up!

Your call could have a critical impact on your representative’s decision. Contact them immediately!

In Liberty,

John Tate

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