A Congressional Hearing was held Friday on H.R. 1207 also known as “Audit the Fed.” As far as I can tell, there was very little in the mainstream media on this Ron Paul sponsored bill. 290 Congressmen of both parties are behind the bill. The importance of an audit is profound as the Fed controls the value of money for anyone holding or using dollars. The Federal Reserve has spent or committed trillions of dollars in the financial meltdown with virtually no accountability. For example, the Fed took it on itself to bail out AIG. The total cost of the government backstop, so far, is more than 180 billion dollars. The Fed also gave 500 billion dollars to foreign banks during the crisis! If the bill is signed into law, it will enable the Government Accounting Office (GAO) to find out exactly who got money, how much, and why?
Scott Alvarez, General Counsel for the Board of Governors of the Federal Reserve, testified on behalf of the Fed as to why Congress should vote the bill down. Alvarez said, in part, “Moreover, publication of the results of GAO audits related to monetary policy actions and deliberations would complicate and interfere with the FOMC’s communications to the markets and the public about current economic conditions and the appropriate stance of monetary policy. Households, businesses, and financial market participants would understandably be uncertain about the implications of the GAO’s findings for future decisions of the FOMC, thereby increasing market volatility and weakening the ability of monetary policy actions to achieve their desired effects.”
In layman’s terms, getting the Fed to open its books and do things out in the open would make it hard for the Fed to do its job. Representative Brad Sherman said what the Fed is really saying is “trust us” with creating and distributing money “in enormous and unlimited amountswithsecrecy.” The Fed contends secrecy is needed to maintain its independence.
Thomas E. Woods, Jr., was called to testify as to why H.R. 1207 should be passed. Woods has a PhD in history and has written many best selling books including his most recent about the current financial meltdown. He said, “The Fed’s arguments against the bill are unlikely to persuade, and will undoubtedly strike the average American as little more than special pleading. Perhaps the most frequent of the claims is that a genuine audit would jeopardize the alleged independence of the Fed. Congress could come to influence or even dictate monetary policy. This is a red herring.”
Woods also said, “If there is any truth to the idea of Fed independence, it lay in precisely this: the Fed may reward favored friends and constituencies with trillions of dollars in various kinds of assistance, while keeping the public completely in the dark. If that is the independence we’re talking about, no self-respecting American would hesitate for a moment to challenge it.”
Below is one of the better exchanges between Congress and the Fed’s lawyer.
The mainstream media’s lack of coverage of this historic bill is disturbing and disappointing. The Federal Reserve has never been audited in its 96 year history. I worked for ABC and CNN as an investigative correspondent for 9 years. If I were still working for either organization, I would be screaming to management to cover this because it is so important to almost everyone. The “Audit the Fed” story has what I call mass audience appeal and, not just for the U.S., but for the world. I have written various posts on this web site about the lack of transparency and downright secrecy of this government subcontractor. I guess telling the truth and shining a light into the dark corners of government is the upside to being outside the control of the mainstream media. I will continue to follow stories involving the secret money and policies of the Federal Reserve.
Greg is the producer and creator of USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin. USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows.