Posted by Gary Howard on 11/11/09 5:50 PM Last updated 11/12/09 2:51 PM [Newer: Government is almost never the solution, but always the problem] [Older: Warner Gets One Thing Right on Healthcare Debate]

In today's New York Times, reason enough for increased scrutiny of the Federal Reserve's practices is illustrated. 

In response to growing public and congressional support for H.R. 1207, Fed Chairman Ben Bernanke did what the Fed seems to do so well-- operate in secret to manipulate outcomes.

Fed officials say they were alarmed, but focused on making their case in private rather than in public. Mr. Bernanke met privately with dozens of House and Senate members, even taking calls at home on weekends, and won praise for his willingness to listen and answer their questions.

Bernanke comes off as an elitist who is simply apoplectic in reaction to the prospect of the Federal Reserve having to actually answer to the people whose money it deals and degrades on a daily basis. So he smartly stopped defending the Fed in public, and began working the system as usual:

Last summer, the central bank hired an experienced Democratic hand and former lobbyist, Linda Robertson, to help deal with members of Congress. Mr. Bernanke alone has met privately with about 40 senators and many House members in the last few months, sometimes to dissect arcane policy issues and sometimes just to explain what he does in plain English.

To re-translate in plain-er English: Bernanke hired a former Enron lobbyist to grease the wheels in Congress so that Americans can continue to be screwed by an unbeholden, unaccountable,unelected central bank.

The problem is, Bernanke still has not made a plausible case against a Fed audit. He and the other Fed supporters go on about nightmare scenarios where an audit:

"...could lead to a Congressional "takeover" of monetary policy that would be "highly destructive to the stability of the financial system, the dollar and our national economic situation."

Hold on, isn't that what has already happened--with the Fed at the helm! I don't believe you Mr. Bernanke, but maybe I am not as sophisticated as your little club that has secret meetings, maybe I am not privy to the same information that you are. Audit The Fed-now.

Posted 11/11/09 6:35 PM BruceKoerber Cedar Rapids, IA

http://moneyandethics.blogspot.com/ Wednesday, November 11, 2009 Who's The Federal Reserve Trying to Bribe Now? Not only does the FED hide the information about to whom they have given the 'hot off the press' money, but likewise they are not saying which House members and which Senators that Bernanke is meeting in private with 'to persuade.' The Nobel Prize Committee members discreetly found places to hide the money they received to elect Paul Krugman in 2008 but no one knew that the FED met secretly with them. If the public knows which elected representatives the FED is trying to bribe then maybe it will be too politically dangerous for these politicians to accept the bribe. An unbribed politician may then vote according to the demands of his (her) constituency. Transparency regarding who it is that the FED is meeting with and trying to bribe is almost as important as an audit.

Posted 11/11/09 11:46 PM JohnF Lake Mary, FL

"...could lead to a Congressional "takeover" of monetary policy that would be 'highly destructive to the stability of the financial system, the dollar and our national economic situation.'" Strictly speaking here, the Fed is right. What the Fed creates are ostensibly bank notes, and Congress doesn't have Constitutional authority to regulate them. Giving Congress the power to print fiat currency would be a disaster worse than letting the Fed do it. If Congress wanted to takeover monetary policy, all it would have to do is abolish the Fed and legal tender laws. It's really a non-issue here though. It's a lie that this would happen because of 1207. The bill doesn't give Congress any power over monetary policy whatsoever. My earnest hope is that this discussion will lead to more people questioning why we must be forced to use a legal tender bank note with no direct ties to anything of value.

Posted 11/12/09 1:43 PM larry101 New York, NY

"To re-translate in plain-er English: Bernanke hired a former Enron lobbyist to grease the wheels in Congress so that Americans can continued to be screwed by an unbeholden, unaccountable,unelected central bank." Now who's being the elitist? If this bill turns into a Congressional takeover of the Fed, the Greenspan days will look like the golden years. Since when did Congress just stop with an 'audit'? They have there hands in healthcare, telecommunications, farming, etc... The irony is if you take a little time, read the Feds financials, pay attention to the market, and use a little common sense, you can do your own audit of the Fed.

Posted 11/12/09 2:10 PM totalrockage Austin, TX

"Since when did Congress just stop with an 'audit'?" I think that's precisely the hope Mr. Paul has for this bill. People may start scrutinizing heavily the Federal Reserve, which is a good thing. The issue really, as I think @larry101 is alluding to, is that Congress won't *abolish* the Federal Reserve, it will *become* (in essence) the Federal Reserve. I wonder if Mr. Paul is in the position to prevent this. However, then we come down to which of the two (the closed-door Fed, or financially irresponsible Congress) is better to control the money supply if it goes the wrong way.

Posted 11/12/09 2:58 PM Gary Howard Arlington, VA

larry101 and totalrockage, When it comes down to it, even if they are fiscally irresponsible, at least Congress is accountable to voters via the ballot box. The Fed is not, and that is the point. Transparency and accountability. If Congress doesn't meet our expectations, we can vote them out. The Fed answers to no one.

Posted 11/12/09 4:18 PM totalrockage Austin, TX

Gary, Yeah, that's really what I was thinking. Even if the power is illegal (in regard to the Constitution), at least they're accountable.

Posted 11/14/09 5:42 PM Glenn Cumming, GA

So, BerBumbler depends on secret meetings with politicians to protect Fed independence. I knew there was a reason I stopped reading the NYT. This article is filled with so much doubletalk I get nausea. I have watched BerHanke give testimony to Congress declaring that the Fed had no responsibility for the value of the dollar nor were long-term interest rates part of its forecasting. Basically, the Fed manipulates the money supply(monetary policy) without regard for the value of the dollar(please define Congress) or long-term distortions in the capital structure. The Federal Reserve System is as anti-liberty as you can get.