Men from Opposite Spectra Agree: Power of Fed Must Be Diminished
CONGRESS APPEARS TO BE AT ODDS over how to properly regulate the banksters. On the one hand, a House legislator has quietly neutered landmark legislation that would set up the country’s first-ever public audit of the Federal Reserve.
And on the other, a powerful House committee is moving to strip the Fed of its regulatory powers, specifically its role in policing the world’s biggest financial firms. According to Rep. Ron Paul (R-Tex.), who is the author of landmark Audit the Fed legislation (H.R. 1207), the chairman of the House Domestic Monetary Policy and Technology Subcommittee, Rep. Mel Watt (D-Fla.), has quietly stripped the bill of “just about everything” while preparing it for “formal consideration” on the House floor.
“There’s nothing left, it’s been gutted,” Paul recently told a national news outlet. “This is not a partisan issue. People all over the country want to know what the Fed is up to, and this legislation was supposed to help them do that.”
Paul’s bill opens the Federal Reserve up to a public audit and would reveal to the world the unprecedented loans handed out by the privately owned and controlled U.S. central bank. It would also expose the sweetheart deals bankers have been enjoying since the collapse of the U.S. economy in the summer of 2008.
It’s no surprise that some legislators have moved to protect the banking sector despite the fact that these greedy financial firms are responsible for U.S. economic woes. All you have to do is follow the money. The district Watt represents
is reportedly home to the world’s largest financial institution, Bank of America Corp. Robert Wenzel, who operates the web site Economic Policy Journal.com, revealed that Watt’s top donors in the 2007-2008 political cycle consisted of Bank of America, Wachovia,American Express and the American Banking Association.
In that year, writes Wenzel, the North Carolina congressman “received $187,359 from the finance/real estate sector, more than double the amount of money he received from any other sector. Outside of North Carolina, his home state, Watt received the most contributions from Washington D.C. and New York City.”
Meanwhile, the chairman of the powerful House Financial Services Committee, Rep. Barney Frank (D-Mass.), is taking steps to counter a White House plan that would hand the Fed the power to overrule U.S. law and formulate its own standards for banking out of thin air.
Frank is moving to strip central bankers of that authority, which would allow them to override federal regulators when it comes to policing firms whose size or activities pose a threat to the financial system.
The Massachusetts congressman is on a collision course with Treasury Secretary Timothy Geithner, a former head of the New York Federal Reserve. Geithner wants to hand bankers even more power despite the fact that they are responsible for creating a massive economic bubble in the housing sector that ultimately led to the fall of economies around the world.
While Frank has yet to introduce any formal legislation that lays out his plan, he seemed emphatic that the Fed would not be handed any new powers to regulate banks.
“There will not be a Federal Reserve power to overrule other entities,” Frank said during a recent press conference.
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(Issue # 47, November 23, 2009)