Though the Federal Reserve is more transparent these days than it was decades ago, there is still a long way to go to make the Fed totally transparent, write Rep. Ron Paul (R-Tex.) and Sen. Jim DeMint (R-S.C.) in The Wall Street Journal.
The legislators note that if the Fed were really transparent, leading news organizations such as Bloomberg and Fox News wouldn't have to litigate to obtain materials that should be available through Freedom of Information Act (FOIA) requests.
“These include information on which banks and companies received loans and for what amounts after the 2008 financial meltdown,” the legislators write.
“One puzzling assertion made by the Fed and its supporters is that the Federal Reserve has some sort of independence from the government and independence in undertaking monetary policy. Nothing could be further from the truth.
“The Federal Reserve is a government-created banking monopoly, and its top decision makers are appointed by the president and confirmed by the Senate. If they do not perform satisfactorily in the eyes of politicians, they will not be re-nominated.”
Paul and DeMint say they do not want to see Congress directly dictating monetary policy.
But, since the Fed is so entwined in monetary policymaking and its decisions so heavily impact the economy, the institution, founded in 1913, should be fully transparent.
They note that the since the Fed was created, the U.S. dollar has lost 95 percent of its purchasing power.
“Interventions into the economy on the order of trillions of dollars cannot continue to escape public scrutiny. American taxpayers deserve better,” the legislators note.
The idea is gaining traction.
A U.S. congressional panel on Thursday approved a measure to open the Federal Reserve's monetary policy decisions to government audits, a surprise blow to the central bank's efforts to shield its independence and a signal of frustration with the central bank.
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