CBSNews Business has an article entitled “Bernanke Fights House Bill to Audit the Fed”. In that article the Chairman of the Federal Reserve, Ben Bernanke says “I don’t think the American people want Congress running monetary policy.” What!? Did I read that correctly? Yes, I did. Obviously, Ben Bernanke either does not believe in the Constitution of the United States or he has never read it.
In Article I, Section 8 of the Constitution (Powers of Congress) it says “To coin money, regulate the value thereof, and of foreign Coin, and fix the standard of weights and measures.” In fact, the Congress was unconstitutional when it passed the Federal Reserve Act in 1913 which gave birth to the Federal Reserve. In gave away its power to regulate money to a third party – a third party which has very little oversight.
Further in the article, it gives a transcript of Bernanke’s interview with Jim Lehrer at PBS. He says, “What people don’t understand is that this bill would give the GAO (Government Accountability Office), the authority to audit monetary policy. And what does that mean? That means if the Federal Reserve decided a year from now that because of incipient inflation it was time to raise interest rates, that the Congress would say, ‘Ah, the GAO’s going to audit that decision. It’s going to subpoena your materials. It’s going to demand information from members of the FOMC. It’s going to evaluate your decision. It’s going to report to Congress.’”
Just so that you understand, The U.S. Government Accountability Office (GAO) is an independent, nonpartisan agency that works for Congress. Often called the “congressional watchdog,” GAO investigates how the federal government spends taxpayer dollars. The head of GAO, the Comptroller General of the United States, is appointed to a 15-year term by the President from a slate of candidates Congress proposes.
The FOMC is a component of the Federal Reserve System and is charged under United States law with overseeing the nation’s open market operations. It is the Federal Reserve committee that makes key decisions about interest rates and the growth of the United States money supply.
So what Bernanke is really saying is that he doesn’t want Congress to do their job by sticking their nose into the policy making decisions of the FOMC. Maybe they are afraid that Congress will object to the Fed’s decisions to print billions of dollars which causes inflation or lowering interest rates to discourage saving and increase borrowing.
It is interesting to me that the bill he is fighting against, “The Federal Reserve Transparency Act of 2009” (h.r. 1207 or s. 604) has 317 co-sponsors in the House and 32 co-sponsors in the Senate. This mix of representatives is both Republicans and Democrats showing broad bipartisan support.
When Ron Paul introduced this bill on February 26, 2009, he said “Madame Speaker, I rise to introduce the Federal Reserve Transparency Act. Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar. Since 1913 the dollar has lost over 95% of its purchasing power, aided and abetted by the Federal Reserve’s loose monetary policy. How long will we as a Congress stand idly by while hard-working Americans see their savings eaten away by inflation? Only big-spending politicians and politically favored bankers benefit from inflation.”
Ron Paul is actually in favor of the abolishment of the Federal Reserve. In a speech before Congress on September 10, 2002, he said that since its creation the Federal Reserve has been victimizing Americans through their “boom-and-bust” monetary policies. Because of the Fed’s inflationary policies, the purchasing power of Americans has eroded away, which represents a real, if hidden, tax imposed on the people.
It is really time to abolish the Federal Reserve. It would finally allow Congress to reassert its constitutional authority over our monetary policy. However, until that can be accomplished then the Transparency bill is needed and has a lot of support. Check to see if your Senators and House of Representative are co-sponsors. We especially need more support in the Senate to get this bill passed. All three of mine are co-sponsors; here is where you can check to see if yours are:
Senator Co-Sponsors: Click Here
House of Representative Co-Sponsors: Click Here
Senate Sponsor: Sen Bernard Sanders [VT]
House of Representative Sponsor: Rep Ron Paul [TX]
If you representatives in Congress are not on the list, go to http://www.congress.org/ to email them today.
Here is the email I sent to the Committees where these two bills currently are. If you wish to use it, feel free (however, remember to change the committee name at the end):
The Constitution of the United States gives Congress the powers to coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures.
Congress unconstitutionally delegated this task to the Federal Reserve in 1913 without sufficient oversight and control. Congress needs to take this first step in controlling the actions of the Federal Reserve and put monetary policy making back in the hands of Congress.
I ask that you bring this piece of legislation to a floor vote and that the members of the Banking, Housing & Urban affairs support this bill.
Here are the links to the contact form for the two committees. I urge you to write to them also.
House Financial Service Committee
http://financialservices.house.gov/contact.html
Senate Banking, Housing & Urban Affairs Committee
http://banking.senate.gov/public/index.cfm?FuseAction=Contact.ContactForm
Original Post: Faithful in Prayer
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Matt
I believe that future generations should have the same opportunities that myself, and those that came before me, had. My parents taught me that I could do anything I wanted to do. I don’t want to have to tell my daughter, “You can do whatever the government tells you to do.” We are at a crossroads in this country; are we going to be free, or are we going to be slaves to the nanny state. I choose freedom.
“I don’t think the American people want Congress running monetary policy.” What!? Did I read that correctly? Yes, I did. Obviously, Ben Bernanke either does not believe in the Constitution of the United States or he has never read it.”
Obviously you don’t know squat if you believe Congress should have direct control of M1 (constitutional or not). Better in the hands of Private Business (The Federal Reserve is a privately held corporation) and Free Enterprise, than those worthless so-and-sos in Congress.
The Federal Reserve is a creature of Congress. It is highly politicized. Congress should do its constitutional duty and put the unconstitutional Fed out of its (and ours) misery. You are partially correct that money should be left to the free market, but not in the hands of a government created monopoly who has destroyed 96% of the value of the dollar since its unnatural birth. The idea that money supply needs to be controlled is a Keynesian fallacy.
I forgot to add … Congress should do its duty to coin and make regular our money.
Thank you CL for helping me out here. Economics in One Lesson and The Failure of the New Economics by Henry Hazlitt shead so many light on the fallacies of Keynesian economics.
The fact is, as uncomfortable as it might be right now, that the Constitutional authority to coin and regulate lies with the Congress. If we pick and choose which parts of the Constitution we want to embrace, we are no better than Obama, Pelosi, and Reid.
Agree wholeheartedly, Matt.
Me no understand. What are you getting at?
Constitution says that Congress has the authority. We should follow that…because the Constitution says so, not because of personal preference. The Dems butcher the Constitution at will because it limits their power. We should not do the same-for any reason.
Are you responding to Denver?
Because the fallacy in his/her reasoning is that the money supply needs to be controlled.
Congress is supposed to coin the money, set the weights and measures, and make sure they stay regular. When we get into talking about “money supply,” we’re talking interest rates, printing, and what not – Keynesian (counterfeiting) schemes.
Setting interest rates is price fixing. Determining the “money supply” is debasing (NOT making regular the weights and measures) the currency. These things are quite anti-constitutional. Not just unconstitutional, but anti.
What I advocate is sound money and free banking, which is wholly constitutional. Interest rates should be set by the market, not by some central planning device.
Here, here! Audit the Fed!
Bernanke’s lying too, the bill doesn’t allow auditing of monetary policy. And the Congress can coin money, but not set interest rates. Money doesn’t need a central planner. In a plain language reading of the Constitution (using the dictionary of their day), “to regulate” means “to make regular.” In other words, they were to keep the money from being debased (which the Fed has done continuously for almost 100 years).
To be specific, printing dollars IS inflation. Rising prices are a symptom of inflation. Prices must go up, because your dollar is worth less.
Bravo! Great stuff!
Another thing to think about here is that most of our economic problems today comes from federal government and Federal Reserve interference with the gold standard and free market economy of our money, goods, and services.
All hail the “animal spirits!”
Until people start reading essays and books by free market economists like Hazlitt, Rothbard and Mises, they are not going to understand the concept of free banking like the free market. Americans haven’t seen free market and free banking in practice since before 1913.