Senate Should Not Confirm Bernanke Until Fed Opens Books for Auditors
AN UNLIKELY DUO of legislators has sent a public letter to Sen. Chris Dodd, the chairman of the Senate Banking Committee, saying that Congress should not confirm Fed Chairman Ben Bernanke’s second term until he agrees to open the privately owned and controlled central bank to an audit.
In the letter, Reps. Ron Paul (R-Tex.) and Alan Grayson (D-Fla.) argued that the Senate must postpone any vote on whether Bernanke should serve another four years “until the Federal Reserve releases documentation that will allow the public and the Senate to have a full understanding of the commitments that the Federal Reserve has made on our behalf.”
AFP readers know Paul well. However, Grayson is the liberal Democrat who recently attacked Republican opposition to the massive health care legislation currently making the rounds in Congress by saying: “Republicans want people to die quickly.”
As the value of the dollar continues to erode, more and more people are blasting the Fed, questioning whether its monetary policy is destroying U.S. currency. And while Bernanke may still be held in high regard by banking elites for handing out free money to Wall Street in an effort to salvage the financial system, Main Street is souring on his secretive programs that put taxpayers on the hook for bankers’ bad loans and assets. This is evident in the fact that 303 House members have now signed on to cosponsor Paul’s landmark legislation (H.R. 1207), which calls for a full and public audit of the Federal Reserve.
“Since 2007, the Federal Reserve has expanded its balance sheet by $1.2
trillion and taken on substantial credit, interest-rate and foreign-exchange risk,” reads the letter from the two legislators.
“It has lent immense sums to some financial institutions against overvalued collateral, while refusing to lend to others with no clear standards as to who was rescued and who was not.”
As a result, the two congressmen are asking that the Senate delay hearings until the Fed turns over detailed accountings of its policies and practices, including minutes by its top policy-making body.
“Chairman Bernanke’s policy-making errors might be chalked up to errors of judgment, and it’s possible to argue that he has been chastened by the last few years of turmoil,” concludes the letter. “What is more disturbing is how the Federal Reserve has refused to disclose the details of its commitments to the bankers, who came close to destroying our economy. . . . The Federal Reserve must become transparent and open with Congress and the public about its behavior during the financial crisis.”
The Senate is expected to initiate Bernanke’s confirmation hearings in the coming weeks.
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(Issue # 44, November 2, 2009)