Rep. Ron Paul (R- Texas) says the Federal Reserve is no longer fulfilling the role it was created to fill, so he believes the entity needs government oversight. :34

 

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Federal Reserve Board of Governors General Counsel Scott Alvarez says that if Rep. Ron Paul’s (R- Texas) H.R. 1207 proposal is enacted, the public would lose confidence in the Fed’s ability to control interest rates and monetary policies. :44

 

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by Julianne LaJeunesse- University of New Mexico

Should the Federal Reserve Committee be regulated by the Government Accountability Office? U.S. Representative Ron Paul (R-Texas) says yes, and Scott G. Alvarez of the Federal Reserve says no.

Paul is the sponsor of H.R. 1207, which calls for audits on the Federal Reserve, a quasi-public entity that in theory can control the nation’s money supply, set interest rates, and implement monetary policy.

At a Friday hearing, Paul said the Fed needs GAO oversight because they aren’t doing their job correctly.

“The Federal Reserve was designed, and their mandate was to make sure that we have full employment, price stability, and stable interest rates,” Paul said. “In my lifetime, interest rates have been 21 percent and less than one percent- so they fail there. They [the Fed] want a stable dollar and stable prices… well, we have continuous inflation.”

Paul said it’s Congress’ responsibility to make sure the Fed does what it was created for and not buy into the idea that the Fed needs more power and more secrecy.

Fed Board of Governors General Counselor Scott G. Alvarez argued before Paul, Chairman Barney Frank (D-Mass.), and other members of the House Financial Services Committee, saying that Fed autonomy is instrumental in safeguarding U.S. interest rates, but also that an independent Fed is a nonpolitical Fed.

Alvarez said from an economic stance, GAO regulation would hinder Fed access to and implementation of some programs.

“If it looks like the Federal Reserve is changing directions because a statement [of] the policy review by another agency is influencing the Federal Reserve’s decision… then the integrity of the process will be undermined, confidence that the Federal Reserve will move in the direction that is best for the economy will be undermined, and we won’t be able to carry out our job as well,” Alvarez said. “And that’s what we’re concerned about.”

Alvarez said the Fed has taken many steps to increase transparency since the 2008 bank bailouts, but when Rep. Emanuel Cleaver II (D- Mo.) asked him about the misinterpretation between Congress and the Treasury Department and the Federal Reserve, as far as Troubled Assets Relief Program allocations, Alvarez said the latter departments decided to use the funds to restore confidence to banking institution, a decision Cleaver said was not immediately apparent when TARP was passed.

By Learned Foote- Talk Radio News Service

On Thursday, the House Financial Services Committee questioned Federal Reserve Board Vice Chairman Donald Kohn regarding a proposal recently advanced by the Obama administration that would expand the powers of the Fed.

The Fed currently oversees monetary policy, and in 1977 Congress established that the agency’s objectives are to maximize employment and stabilize prices.

The expanded powers would grant the Fed the authority to oversee systemic risks to the financial system as a whole. Said Kohn, “the job of the systemic risk regulator would be to take account of those interrelationships, the markets and how they’re developing, and the institutions and how they fit into the markets, and look at the overall risk to the system, as well as the risk of the individual institution.”

He added that the Federal Reserve could fulfill this role.

Some Congressmen argued that the expanded powers could compromise the Fed’s responsibilities regarding monetary policy.

Rep. Spencer Bachus (R-Ala.) said that the House Republicans’ view of the Federal Reserve dramatically differed from that of the administration. “Republicans believe that the Fed’s core mission, and I stress this, is to conduct monetary policy, and that that will be seriously undermined if its supervisory responsibilities are dramatically expanded.” He suggested that the Fed could become a “permanent bail-out agency,” and its political independence could be compromised.

“We need to end the bailouts that the Fed I think has been instrumental in carrying out over the last eighteen months, and I mean the ad hoc bailouts of individual institutions.”

Kohn said “we do not believe that enhancements to our existing supervisory and regulatory authority proposed by the administration would undermine our ability to pursue our monetary policy objectives effectively and independently.”

Rep. Ron Paul (R-Texas), who has introduced a bill in the House to audit the Fed more thoroughly, expressed skepticism as to whether the Fed’s powers should be expanded. He said that the Fed needs to be more transparent, although Kohn argued that “our independence in the conduct of monetary policy is accompanied by substantial accountability and transparency.”

Congressman Al Green (D-Texas) asked the Vice Chairman how he would respond to those who argue that it is “risky to give the Fed this much power.” Kohn replied that the additional powers are “incremental…not a huge increase in our authority.” He emphasized that “for the authority we already have, we are held accountable.”

Speaking at the Cato Institute, Congressman Ron Paul (R-Texas) discusses his bill to audit the Federal Reserve. He explains the implications of the legislation, the reasons it has gained bipartisan support and the efforts taken by the Fed in response to the bill. June 24, 2009

Congressman Ron Paul says America will not experience “true monetary reform” until the actions of the Federal Reserve become more transparent. Rep Paul (R-Texas) made these remarks at the Cato Institute in Washington D.C.

By Learned Foote- Talk Radio News Service

Congressman Ron Paul (R-Texas) recently introduced the Federal Reserve Transparency Act to House, a piece of legislation that calls for a stronger audit of the Federal Reserve along with a “detailed report to Congress.” The bill currently has 241 co-sponsors.

During a forum at the Cato Institute, Paul said he originally decided to run for Congress in the 1970s due to his interest in monetary policy, which is conducted by the Federal Reserve. “I’ve been talking about it for decades, and arguing that we had a financial system that was very fryable, very vulnerable, and it was the Fed that was creating the bubbles. Therefore we should be looking into it and preventing these problems rather than waiting for cataclysmic financial crisis to hit.”

Gilbert Schwartz, Former Associate General Counsel to the Federal Reserve, appeared alongside Paul, argued that the Fed is responsible for the financial crisis to some degree, he praised the “flexibility that the Federal Reserve exhibited in terms of their willingness to make sure that the economy—not just the U.S. economy, but also the world financial system—did not collapse.”

Schwartz went on to explain that the Fed understands the growing demand for transparency. He cited recent financial statements released by the Fed, saying, “clearly the message is getting to the Fed, and… this indicates at least some degree of attempt by the Fed to: one, be responsive to that criticism, and number two, probably to thwart the legislation that would otherwise subject them to GAO [U.S. Government Accountability Office] audit.”

Paul said that his bill will “open the books,” but not necessarily affect monetary policy. “It’s less confrontational for those who want to design regulations and deal with with monetary policy, and I think that’s why we’re getting such bipartisan support.” Paul believes, however, that if the audit is conducted, public opinion will turn against the Fed and monetary policy will be substantially challenged.

Ron Paul attributed the bills’ support to the changing landscape of the economic system. “It had to do with the TARP funds,” Paul explained. “There are a few spammers out there that are interested in what I’ve been doing, and they’re letting their Congressmen know.”

Rep. Ron Paul (R-TX) says that the courts will not help achieve monetary reform and that the only way to achieve monetary reform is through legislation that audits the Federal Reserve. He says that people need to educate themselves about the activities of the Fed and argues against the notion of a powerful central bank. (0:51)

 

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By Michael Ruhl, University of New Mexico – Talk Radio News Service

Former presidential candidate and long time consumer rights advocate Ralph Nader talked with Michael Ruhl to discuss the status of his lawsuit against the Democratic National Committee (DNC). This was immediately following the circuit court argument for Nader vs. DNC. Nader claims that he was harassed and burdened in 2004 presidential election by the DNC, in what he calls “an abuse of the legal process” and malicious prosecution. In this interview, Nader explained background of the case, and the case’s current status. He said, “there is no other western democracy that comes close to obstructing voters and obstructing candidates as is the case in our country.”

Nader also spoke about the two-party system, and the effect that his case has on future third party candidates in the presidential process. He said that his case is designed to draw boundaries, to make sure that third party candidates can exercise their First Amendment rights. Nader also referred to the issue as one of democracy, because he said in limiting ballot access, one is truly limiting the right of the people to decide who they want to represent them. Nader called for national ballot standards, instead of ballot standards which vary state by state. He also advocated instant runoff voting and public funding of public campaigns.

Nader said that the two-party system is not allowing third parties access to the higher tiers of federal government, and this two-party system is moving gradually to a one-party system, where gerrymandered districts make reelection almost certain for many members of Congress. He called this a system that can be rented by the rich. In spite of the stronghold that the two parties have on the system, Nader said that he has talked with several members of Congress who may be interested in helping to move legislation on election reform. He mentioned by name: John Conyers (D-Mich.), Ron Paul (R-Texas), Dennis Kucinich (D-Ohio), and Jessie Jackson, Jr. (D-Ill.). He anticipates this reform effort to be difficult, because as he said, “the foxes are guarding the chicken coop.” Nader seems ready for a fight.

(08:50)

 

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By Michael Ruhl, University of New Mexico – Talk Radio News Service

Today a league of congressmen sent a letter to President Obama asking him to reconsider his military policy in Afghanistan before committing 17,000 new troops in a surge. The letter said, “As the goals of our seven year military involvement remain troublingly unclear, we urge you to reconsider such a military escalation”. This letter came from a bipartisan group of 14 members of Congress.

Congressman Ed Whitfield (R-Ky.) said that he is “perplexed” by the president’s troop increase, considering that his administration has stated it is presently reviewing its strategy in Afghanistan. Congressman Jim McGovern (D-Mass.) said that America is getting deeper into a “war without end” and that we need an exit strategy in Afghanistan.

Both Ron Paul (R-Texas) and Dennis Kucinich (D-Ohio) expressed concern on waging an endless war in such a time of economic peril. Kucinich said what the country needs is a healthcare surge, a home ownership surge, and an employment surge.