Monday, May 18, 2009

Show me the money

Sometimes I think Ron Paul's ideas may be too simplistic. This isn't one of them. In a Forbes editorial last week, Congressman Paul called for an audit of the Federal Reserve Bank. Paul of course, doesn't buy the idea that the Fed is necessary to keep inflation low and to promote growth. Truth be told, I've been of the opinion that it has played a part in all but eliminating the 10 - 15 year cycle of boom, panic and collapse that has plagued our economy since the Washington administration. Maybe it has but maybe, as the Congressman claims, it's been the cause of inflation and a drag on growth. Maybe there's a better way and I'm the first to admit I don't know.

The idea of an independent Fed is a fallacy, says the man from Texas. The allegedly independent Fed has
" far too much authority to make agreements with foreign governments and central banks, or create temporary liquidity facilities"
and of course the Chairman and governors are appointed by the President and will reflect his politics, but the question of whether it is a good solution, a bad solution and more importantly whether we should have a Federal Reserve Bank at all isn't easy to answer and it isn't easy to discuss because of the political passions and partisanship involved. Everyone thinks he's an economist these days. Of course, supporter or detractor, we really don't know exactly what the Fed is doing anyway, not even today with the huge amounts of money being moved around in the dark.

'Let's have an audit' is Ron Paul's simple suggestion and one would think that at a time when the government has the power to audit anyone; to investigate, spy on, wire tap, seize assets and records, imprison without charges and even pour water up your nose, the answer would be "why the hell not?"
"What possible arguments exist against this bill? Who opposes an audit of the Fed's activities and why?"
asks Glenn Greenwald in Salon.com. "It would interfere with the Fed's independence" says Forbes in rebuttal and stresses that monetary policy is too complex for simple minded congressmen. Maybe it is, but maybe it's too complex for the Fed too and more than maybe; the lingering appearance of impropriety, if not incompetence, can finally be confirmed or dispelled by a little bit of transparency.

I wouldn't dare pass myself off as an economist and I'm not going to see this along party lines because I don't trust either side, particularly in this atmosphere of secrecy, but if an "independent" Fed means a Fed that operates in the dark, according to its own rules and politics, I'm with Congressman Paul. I want to see the books and you're going to have a lot of 'splainin to do to talk me out of it.

Perhaps I can use the words of surveillance supporters against the government for once: if you've got nothing to hide, you've got nothing to fear.

7 comments:

RR said...

Great post. I'm in that camp too: I just don't know if they hurt or help -- an audit, and more transparency, seem appropriate.

Of course, it'll never happen.

Capt. Fogg said...

Finance is simply one area I can't see justifying secrecy.

Baltazar said...

Economics is theology..Everything the human race does is ,all thu history.

Capt. Fogg said...

You're right, and come to think of it, everything we believe about this country is Theology.

Cosa Nostradamus said...

.
Very old populist hooey, this anti-bank stuff. Pre-dates Jackson. Andrew, not Jesse.

Does Pope Ron-Paul use ATMs? Receive a paycheck? Live in a home that was ever mortgaged? Then he's part of the Federal Reserve System, too. We all are.

We need a banking system. It should not be entirely private, for reasons that ought to be obvious after the last twelve months: Government oversight is not enough, we must have control of our finances. But direct control by politicians on a day-to-day basis is not a good idea, either, as it would subject our personal and business finances to political vendettas and electoral politics. I'm sure most of these anti-bank "libertarians" (closet Republicans & recovering Republicans) would be against THAT.

Having said this, anything that cannot be explained is, by definition, inexplicable, or as Webster would have it, "incapable of being explained, interpreted, or accounted for [an inexplicable disappearance]." Unaccountability seems like the opposite of what you want in a bank.

If it can't be explained, it's probably something somebody doesn't WANT you to know, like whose buddy got what favor to cover whose ass. That ain't banking. That's insider politics and crony capitalism at its' worst. It's our money, and our government, including the Fed. The system works, yeah, but for whose primary benefit? It should be the depositors and the taxpayers, not the bankers and their shareholders, first. A little light on the subject would be a good disinfectant, in case there's any stench of corruption on up in there.

The problem with our system today, and not just the Fed, is that it relies almost exclusively on "conservative" corporatist industrial expertise. Our government is full of Wall Street types, defense contractors, agribusiness shills, etc. Is it any wonder that our government's policies are so violently pro-business and anti-worker, anti-consumer, anti-shareholder? Duh. Chickens, meet foxes. They'll be managing your house.

The biggest disappointment, so far, with Obama has been his continuation of this. He could have selected experts from the labor movement or academia, dissenting voices from non-corporate think-tanks and NGOs. There are many with government and industry experience who are not outright whores for the corporations. But he chose the whores, in part because they have more gov't experience. But if the government NEVER listens to or hires non-corporate advocates, then they will NEVER have government experience.

This was a chance to reverse that pernicious trend, and the Dems blew it. This is why people say there is no difference between the two Parties, and why nuts like Paul come into being. But for once, I agree with him: Audit the suckers on a regular basis. And that includes the Treasury, FNMC, FHLMC, the SEC and all the rest of them. Let's just see who's minding the store, and how, and for whom.

Great post, Capt!
.

d.K. said...

I agree with you... I don't know enough to "know..." but I like the idea that THE Fed's selection doesn't correspond to the presidents' terms, and so (love him or hate him) Greenspan was appointed by two polar opposites -- gives me pause to think maybe that's as good as we'll get. We'll see. Interesting post, tho...

Capt. Fogg said...

"That ain't banking. That's insider politics and crony capitalism at its' worst. It's our money, and our government, including the Fed. The system works, yeah, but for whose primary benefit? It should be the depositors and the taxpayers, not the bankers and their shareholders, first. A little light on the subject would be a good disinfectant, in case there's any stench of corruption on up in there."

What can I do but agree??