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The Federal Reserve system, that mysterious organization with the temple-like headquarters just off the Washington Mall and thick-walled outposts in cities across the land, is under assault. It's "the most serious attack that I have seen on the Federal Reserve in the many, many years that I've studied it as a scholar," says Columbia economist and former Fed governor Frederic Mishkin.
Texas libertarian-Republican-obstetrician-Congressman Ron Paul--a man not known for bipartisan consensus-building--has gotten 313 of his colleagues, more than 100 of them Democrats, to back a bill that would subject the Fed to audits by the Government Accountability Office, and the Financial Services Committee has approved a version of it. On the other side of Capitol Hill, Senate Banking Committee chairman Chris Dodd is pushing reforms that would strip the Fed of its power to regulate banks.
It has gotten so bad that Fed Chairman Ben Bernanke has resorted to the equivalent of heavy artillery, taking to the opinion pages of the Washington Post on Nov. 29 to express his concern that these measures "would significantly reduce the capacity of the Federal Reserve to perform its core functions." (For Fedspeak, this is seriously blunt language.)
The most core of the Fed's functions is running the country's monetary policy--that is, deciding how many dollars should be in circulation. Hardly anyone is calling for it to be stripped of this power. Yes, the good Dr. Paul does so in his best seller End the Fed, but this is not what you'd call a viable legislative proposal, which is why he's pushing his audit plan in Congress instead. But Bernanke and other Fed defenders argue that subjecting the organization to more outside scrutiny and taking away its side function of regulating banks would render it unable to manage monetary policy effectively.
Originally posted by tothetenthpower
I am a little surprised that this is getting attention in the MSM. Time being part of the same company as CNN among others.
Perhaps we will see this go the way we want?
Corker came back, so we'll give him a pass for going on and on:
"My antenna right now makes me feel nervous about the hyperactivity and what could happen down the road," Corker says. "You responded aggressively during this last cycle. As has been said, you're being criticized for responding aggressively. If we allow the Fed's role in our financial system to become something far greater than it should be … we're going to set ourselves up to do some ultimate long-term damage to our country."