Ron Paul’s Bill Would Put Fed on the Hot Seat
Meanwhile White House, Treasury looking to expand autonomy of Federal Reserve
By Christopher J. Petherick
Treasury Department Secretary Timothy Geithner is calling on Congress to hand the privately owned and controlled Federal Reserve even more power to regulate financial markets at a time when there is growing support among legislators to put Fed bankers on the hot seat by giving federal officials the authority to audit the central bank.
In the June 29 edition, AMERICAN FREE PRESS reported that the Federal Reserve Transparency Act (H.R. 1207) introduced by Rep. Ron Paul (R-Texas) had picked up “enough sponsors to get it out of committee and onto the floor of the House of Representatives.”
The bill gives the federal government the power to audit the privately owned and controlled Federal Reserve and its various funding arms, which have loaned, given out or guaranteed trillions of dollars to various Wall Street pals and financial institutions. At that time, the bill had 226 co-sponsors—more than half the entire membership of the House. Since then, however, the number has grown to 243, with more joining every day.
The rising popularity of Paul’s bill contrasts sharply with recent statements made by Geithner, who wants to give Federal Reserve bankers even more power to regulate financial institutions. The problem for Geithner is that it was former Federal Reserve chairman Alan Greenspan’s loose fiscal policies that have largely been to blame for the economic woes facing the country. For decades, Greenspan flooded the world with U.S. dollars, creating the perfect environment for Wall Street speculators and bankers to dig themselves a financial hole so deep that they took Main Street with them.
Now, as part of a sweeping financial overhaul proposed by the Obama administration, Geithner wants to give the Fed even more power to oversee the largest financial firms such as Citigroup and Bank of America. It’s the equivalent of putting the fox in charge of the brooder after he’s already eaten most of the chickens in the henhouse.
During a recent hearing on the matter, Sen. Jim Bunning (R-Ky.), a longtime critic of the Fed, grilled Geithner: “What makes you think the Fed will do better this time around?”
Geithner could only respond that empowering the Fed “made the most sense, given the circumstances.”
It should be no surprise that Geithner continues to side with the central bank given the fact that he served as the head of the Federal Reserve Bank of New York from 2003 to 2009. The New York Fed is considered the most powerful of the regional central banks due to its location near Wall Street and the leadership role it plays in setting monetary policy.
Meanwhile, Paul’s call to audit the Fed continues to make headlines across the country.
In mid June, CBS News reported in depth on Paul’s measure, which “mandates a thorough audit of the Federal Reserve.”
“The tremendous grass-roots and bipartisan support in Congress for H.R. 1207 is an indicator of how mainstream America is fed up with Fed secrecy,” Paul said.
“I look forward to this issue receiving greater public exposure.”
Christopher Petherick is a journalist and publisher based in Maryland. For more information, see his website at www.brandywinehouse.us or write directly to BRANDYWINE HOUSE BOOKS AND MEDIA, P.O. Box 638, Cheltenham, MD 20623. Petherick encourages all readers with Internet access to sign up for AFP’s free weekly email newsletter. It’s loaded with house news and special offers available only to newsletter recipients and AFP web site users. See AmericanFreePress.net.
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(Issue # 27, July 6, 2009)