Keynesian College Economist Weenies Come to Aid of Their Hero Ben Bernanke in Opposition to Ron Paul’s Audit the Fed Bill

Evidently reading a script that was probably written by Ben Bernanke himself, a small number of college economists wrote a letter to the Senate Banking Committee and House Financial Services Committee saying the tired, worn out old line that if the Government Accountability Office audits the Federal Reserve, it would cause serious harm to the ability of the Fed to battle inflation and its independence. Yawn!

In an effort to dazzle the lawmakers, it is being pointed out that a number of those that have signed the letter are recipients of the Nobel Prize, such as Daniel McFadden, Roger Myerson, Edward Prescott and Myron Scholes. So what? That’s all politics anyway, as other recipients like Barack Obama and Al Gore have proven. That makes that supposedly impressive thought particularly irrelevant. It also seems because 270 people have signed the letter that it has some type of meaning. Whatever it is, I haven’t discovered it yet.

All it tells me is that Bernanke is scrambling for support as his personal and political capital is collapsing around him.

Congress, by the way, so everyone can understand, is vested with power by the constitution in matters related to our currency. So the idea that the Federal Reserve should be some agency allowed to do whatever it feels like doing in order to maintain that so-called independence is ridiculous when you consider the American government was originally set up with checks and balances to keep those with power from overstepping their bounds as history has proven happens again and again when power is left unchecked.

Yet here we have Bernanke and his sycophants wanting us to believe that bringing checks and balances to the agency by having full audits somehow weakens the agency. Well, actually it probably does. But that’s the best news that could happen to the Federal Reserve on a short-term basis.

Americans and lawmakers need to know what this secret organization is doing behind closed doors on our behalf; domestically and with foreign central banks and governments.

Those supporting the audit of the Federal Reserve, rightly not that the signers of this letter are just a bunch of buddies of Ben Bernanke and connected to the Fed (some used to be Federal Reserve Officials). Consequently, their supposed objectivity is at minimum, suspect.

What I think some of this is about, other than coming in response to Ben Bernanke seeking out their support, is these economists see their Keynesian wet dream ending in front of them, and their relevancy and legacy possibly disappearing altogether, or ultimately identified and ending up the joke it really is.

This current recession is a slap in the economic face to those that have supported Keynesianism, which is increasingly under siege from its self-conscious opponents, but also from the public that haven’t caught up to understanding it yet, but know there’s something wrong with how the government and Federal Reserve have interfered in the economy.