In a recent and unusual action, Federal Reserve Chairman Ben Bernanke wrote a column in a newspaper, in this case the online version of the Washington Post, which attempted to undermine the legislation initiated by Ron Paul to at minimum require that the Federal Reserve be fully audited by the Government Accountability Office (GAO).
Some of Bernanke’s thoughts are actually very disturbing, and confirm more than ever why the Fed needs to be audited. Let’s look at several comments he made in the column.
In reference to auditing the Fed and taking away its regulatory powers, Bernanke said this:
What Bernanke subtly attempts to do here is take the issue out of the authority of the United States in the minds of the readers and place it in the authority of “global consensus.” Who cares about global consensus, and what he also calls the “appropriate role of central banks?”
With the fact that Bernanke continually refers to this in a variety of ways when attempting to defend the Federal Reserve in its ‘doing business as usual,’ it seems to strike at the core of what Ron Paul and many of us are concerned about, and that is what types of entangling alliances and agreements are being made with foreign governments and foreign central banks without lawmakers or the American people knowing what they are. This, probably more than anything else, is what Bernanke wants to keep hidden.
Essentially how I read it, is Bernanke is attempting to make it look like this isn’t an American issue but some type of global issue. Bernanke is wrong! If this isn’t an American issue than what is? It already unveils that Bernanke has something to hide in this regard, and global governance through these financial alliances seems to be a big part of it. All Americans should be concerned about that.
The other major attempt at manipulation Bernanke attempted to persuade people with the column was to make it seem like all of this is just a result of the public being angry with the Federal Reserve for not handling the current economic crisis in a way that it would largely be avoided.
“The Federal Reserve, like other regulators around the world, did not do all that it could have to constrain excessive risk-taking in the financial sector in the period leading up to the crisis,” Bernanke said.
Bernanke goes on to say that once they got hold of things they then came to the rescue and made things much better for us (laughter in the background).
The problem with Bernanke’s idea that lawmakers are simply responding to the anger of the public over the situation is completely false, at least in how it relates to Ron Paul and auditing the Fed. It could possibly true with Chris Dodd’s proposal to create a super agency to regulate monetary policy, as he’s behind in the polls in his bid for reelection, and has been perceived as a friend of the big banks for a long time.
But with Ron Paul, he has been on the record for decades concerning not only reining in the Federal Reserve, but ending it altogether. So to make it look like this is something new, is completely dishonest on the part of Bernanke, who knows full well the beliefs and thoughts of Ron Paul on the matter over the decades.
Finally, Bernanke plays the old card of political independence, which it seems he is the only one concerned with. Bernanke writes that if the public perceives Congress is influencing interest rate decisions, it “would undermine the confidence the public and the markets have in the Fed to act in the long-term economic interest of the nation.”
There’s no other way to say it, that is just a bunch of hot air. The vast majority of the public has no idea how all of this works, and to say they’re walking around thinking with dread that Congress could be influencing interest rates, is bizarre to say the least.
For the markets, they just try to figure out what the near-term interest rates will be to make base their decisions on. Those rates don’t always match the expectations of the markets, and so aren’t that important or as valuable for market confidence as Bernanke is attempting to make us think.
The bottom line to me is Bernanke knows the proposal by Christopher Dodd probably will have little if any possibility of passing into law. What he fears is the bringing to light of the activities of the Fed, which the full audit from the Government Accountability Office would do, through the legislation presented by Ron Paul, which has unprecedented support. This is why he’s attempting to confuse and distort the issue, in order to take our focus away from what needs to be done.
