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Published On: Sun, Feb 8th, 2015

The Fed Attacks “Audit the Fed” and Rand Paul

TND Guest Contributor:  Paul-Martin Foss |federal reserve

As The Hill reports, Federal Reserve Bank Presidents have begun to lash out at the “Audit the Fed” bill introduced by Senator Rand Paul. Dallas Fed President Richard Fisher is quoted as saying:

“Who in their right mind would ask the Congress of the United States — who can’t cobble together a fiscal policy — to assume control of monetary policy?” Richard Fisher, president of the Federal Reserve Bank of Dallas, said during an interview with The Hill.

Mr. Fisher apparently has forgotten that that same untrustworthy Congress created the Federal Reserve System. Perhaps he would prefer that such an untrustworthy creation as the Federal Reserve should be done away with, and the charters to the regional Federal Reserve Banks be revoked? We at the Carl Menger Center would be more than happy to work with him toward that goal, undoing the calamitous mistake Congress made in 1913.

Mr. Fisher has also forgotten that the Constitution grants Congress the power to “coin Money, regulate the Value thereof, and of foreign Coin…” Notice that it is only Congress that has the power to regulate the value of the coinage, not the Executive Branch, and not an unelected agency such as the Federal Reserve. If Mr. Fisher has a problem with that, he is welcome to push for a Constitutional amendment to change that.

The Constitution also does not give Congress the power to emit bills of credit. Nor is Congress therefore allowed to delegate that non-existent power to an Executive Branch agency such as the Fed. Not that pesky things like laws have ever stopped the Fed from doing what it feels like doing.

Fisher said lawmakers are looking to shift blame, having proven “unable to get together with their own colleagues on a working fiscal policy or construct a regulatory regime that incentivizes investment and job creation.”

“So they simply find it convenient to create a boogeyman out of an entity that does its job efficiently — the Federal Reserve,” Fisher said.

The Fed? Efficient? Has he taken a look at the Fed’s own inflation figures? How’s that price stability mandate going, Mr. Fisher? This chart certainly doesn’t make you look too efficient.

Consumer Price Index, 1913-present

Consumer Price Index, 1913-present

 

Oh, wait, that’s right, the Fed’s job isn’t to ensure the stability of the dollar, it’s to bailout Wall Street and take all that worthless mortgage debt they issued off their books so that the banks’ balance sheets look better than they actually are.

MBS-1024x680

 

The Fed also has to purchase a whole ton of Treasury debt to ensure that the federal government can keep spending like a drunken sailor.

Treasuries-1024x680 (1)

Well, kudos to you Mr. Fisher, I guess you and your Fed colleagues are doing a great job after all. Keep up the good work. I’m sure Wall Street appreciates everything you and your colleagues have done to continue lining their pockets. I hope the President thanks you for enabling him to run trillion-dollar-a-year deficits. And I’m sure the nearly 15 million Americans who have left the labor force are thanking you for a much-needed break from earning a living.

LaborForce-1024x680

Twenty years from now, when our generation is still paying off the first quarter of our student loans, eating D-grade meat on the few occasions we can afford that luxury, and trying to scrape together enough money to afford the rent on the apartment we share with four other families, we’ll think back fondly to your comments and realize how lucky we were that we left monetary policy in the hands of the Federal Reserve. After all, if those spendthrifts in Congress had had the power to audit the Fed, they might have called for trillions of dollars in asset purchases and a steady devaluation of the dollar’s purchasing power. And we couldn’t possibly have that, now could we?

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About  Paul-Martin Foss:

Paul-Martin Foss is the founder, President, and Executive Director of the Carl Menger Center for the Study of Money and Banking, an Arlington, VA-based think tank dedicated to educating the American people on the importance of sound money and sound banking.

Prior to founding the Menger Center, Mr. Foss worked in the U.S. House of Representatives for seven years, including six years as Congressman Ron Paul’s legislative assistant for monetary policy and financial services, and one year as Deputy Legislative Director for Congressman Thomas Massie.

As Congressman Paul’s legislative assistant, he assisted the Congressman in his duties as Chairman of the Subcommittee on Domestic Monetary Policy by helping to develop hearing topics, agendas, and briefing Congressmen and their staffs on monetary policy topics. Mr. Foss also was responsible for the management of Dr. Paul’s monetary policy and financial services legislation, including the “Audit the Fed” and “End the Fed” bills, and was co-editor of Ron Paul’s Monetary Policy Anthology, a multi-thousand page compilation of hearing transcripts, lecture transcripts, and other documents related to Dr. Paul’s chairmanship.

Mr. Foss received his Bachelor’s degree from The University of the South (Sewanee), and Master’s degrees from the London School of Economics and Georgetown University’s Edmund A. Walsh School of Foreign Service.

This article appeared on the Carl Menger Center for the Study of Money and Banking and is reprinted with permission, “Creative Commons 4.0.”

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