New article for PolicyMic.
In a Freedom of Information Act request obtained by Politico, Fed Chairman Ben Bernanke sent out “thank you notes” to Democratic members of Congress who gave speeches on the House floor urging their fellow colleagues to reject Congressman Ron Paul’s Audit the Fed bill.
The day after it passed 327-98 in the House, Bernanke thanked Reps. Barney Frank, Elijah Cummings, Melvin Watt, Carolyn Maloney, and Steny Hoyer for their outspoken devotion to Fed secrecy and corruption. Well, Bernanke may have put it in different terms, but that is essentially what these Congressmen were doing.
“While the outcome of the vote was not in doubt, your willingness to stand up for the independence of the Federal Reserve is greatly appreciated,” Bernanke wrote. “Independence in monetary policy operations is now the normal for central banks around the world — and it would be a grave mistake were Congress to reverse the protection it provided to the Federal Reserve more than 30 years ago.”
My first initial reaction to Bernanke’s notes was the usual disgust whenever Bernanke and the Fed are discussed, but this may actually be a good sign. Before Bernanke, Alan Greenspan was hailed as “the maestro,” a guru waving the magic wand of easy credit and paper money over the economy.
Thanks to the increased accessed and scope of the internet and Congressman Ron Paul’s tireless efforts to highlight the issues of monetary policy and the Federal Reserve, Ben Bernanke is the most visible Fed Chairman in history. Bernanke has even held press conferences to specifically defend his actions and Paul’s grilling of Bernanke can be seen by anyone on YouTube.
And thanks to these factors, Americans don’t like what they have already seen so far. A partial audit of the Fed revealed that they had spent $16 trillion in complete secrecy after the financial crisis of 2008, even lending money to foreign central banks and foreign corporations. That is more than ten times the unofficial annual deficit of the U.S. government and about the same amount as the national debt.
Given this information that was discovered solely from a partial audit, Paul’s most recent attempt of a full, complete Government Accountability Office audit of the Fed skyrocketed in interest and popularity. Members of Congress were bombarded with phone calls urging them to vote yes, and in a mostly bipartisan effort, they passed it in the House.
But 97 of the 98 members who voted against it, not to mention the five members who received “thank you notes” from Bernanke, were Democrats. One would think that basic accountability and transparency of the essentially private monopoly in charge of the money supply and interest rates would be a bipartisan issue. Aren’t the Democrats supposed to be the party of the little guy, the same group that has been disproportionately harmed by Fed policies that have generated meager economic growth, stagnant wages, a devalued dollar, and a tax burden on their shoulders for the bailouts, wars, debt, and deficits?
Thankfully, Paul’s Audit the Fed bill passed in the House anyway and Paul’s son, Senator Rand Paul, has 27 co-sponsors for a similar bill in the Senate. But Senate Majority Harry Reid has other plans. Here is a clip of Senator Reid (on the side of the page) from twenty years ago arguing in favor of an audit of the Federal Reserve, the same Reid that is now fighting tooth-and-nail to now prevent it from even seeing the Senate floor.
Hypocrisy? Political pandering and flip-flopping? Of course, he’s a politician and a Democrat, I wouldn’t expect anything less. Reid is predictably more concerned about maintain ins his party’s power and likely acquiescing to President Obama, who re-appointed Bernanke as Fed Chairman and has been supported by the Fed’s politically-connected industries since day one.
But even if Reid and the Democrats continue to stand in the way of the key issue at the heart of America’s financial and economic mess and block the audit in the Senate, the chances of transparency and change grow by the day. The same YouTube that catches Reid (and so many public figures) is the same tool that is putting Bernanke front and center on Americans’ computer screens.
Combine that with the massive spread of literature and information on sound economics and the damage that the Fed will continue to do to our economy and our currency, and it’s only a matter of time before their gig is up.