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Last week the 112th Congress was sworn in. I am pleased
that I will be chairing the Monetary Policy Subcommittee of the Financial Services
Committee, which has oversight of the Federal Reserve. Obviously, this
position will facilitate my efforts to ensure the Fed provides the American
people with more information about what they have been doing with and to our
money. Not surprisingly, since my chairmanship was announced, apologists for
the Fed have been recycling the old canard about how increased transparency
threatens the Fed's so-called political independence.
By independence, they are referring to the Fed's
ability to greatly impact the economy with virtually no meaningful oversight.
We only recently learned that the bankers at the Fed were able to use the
latest financial crisis to bail out Wall Street cronies and foreign central
banks with billions of dollars that were created and wasted, instead of
appropriated and voted on by representatives of the people. The Fed and its
supporters in Congress vehemently fought even this small bit of transparency
and without this one-time provision in the financial reform act forcing
disclosure, we would still not have this information. Indeed, we are in the
dark on so much of what the Fed has done. This is extremely dangerous for our
country, yet this power and secrecy is defended as some kind of public good,
which is patently ridiculous.
Our government is based on a system of checks and
balances. With no check on the Fed, it is no surprise it has thrown the
economy wildly off balance. The solution is not to re-inflate the bubbles the
Fed created, or to continue to devalue the currency, or to throw billions at
failing banks and corporations. The solution is to return sanity and freedom
to monetary policy. Forcing the entire country to use a medium of exchange
that is subject to the whims of elite bankers and their cronies on Wall
Street is not sanity. Hoping that an unchecked, all-powerful, behemoth
banking cartel will solve any economic problem is not sanity.
The problems the Fed was originally created to solve
now look miniscule compared to the problems it has created. If
"political independence" erodes the purchasing power of the
currency by 98%, destabilizes the economy with radical booms and busts, all
while increasing unemployment and tipping us ever closer to hyperinflation,
perhaps it is time to try a little transparency and accountability instead.
Better still - we should try giving the people true economic freedom.
Make no mistake: the Fed is not truly independent of
political pressure. Its chair is appointed by the president, and it is a
creature of Congress. Congress has a duty, albeit a neglected one, to
exercise oversight of the Fed. However, even if it was politically
independent, it is not independent of the influences of Wall Street. One only
has to look at the revolving door between the Fed and the big banks to know
that. Disclosures on TARP funds confirm this.
It is nothing short of cruel and criminal for Congress
to stand idly by while the life savings of Americans are inflated away to
nothing. It is high time Congress insist on getting complete information on
what the Fed has been doing, and for whom. My hope is that exposing the truth
will demonstrate the insanity of the status quo and more people will call for
sensible changes, such as legalizing competing currencies.
Ron Paul
www.house.gov/paul
Copyright Dr. Ron Paul
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