Tags: Gillespie | Fed | audit | money

Reason.com's Gillespie: Everyone Agrees the Fed Needs to Be Audited

By    |   Monday, 06 October 2014 02:59 PM

The need to audit the Federal Reserve is one of the few issues on which both poles of American political thought are in rare agreement. Polls show up to 80 percent of Americans also would like an audit.

But it's still not going to happen for mysterious reasons, Reason.com CEO Nick Gillespie writes in a guest column for The Daily Beast.

Gillespie noted that the House of Representatives recently passed the Federal Reserve Transparency Act, which would require a central bank audit and force open the Fed's books to see how monetary policy really gets set.

The bipartisan vote was overwhelming, at 333-92, with a majority of House Democrats joining all but one House Republican in calling for the audit.

"Because it controls the money supply of the planet's biggest economy and because it operates so opaquely, [the Fed is] an obvious place to project all sorts of anxieties about large, impersonal forces beyond our reach that sharply affect, if not actually control, virtually all aspects of our daily lives," he argued.

"But one needn't wade into the fever swamps of conspiracy to see the Fed as an inherently problematic institution."

In fact, a Government Accountability Office (GAO) audit in 2011 showed the Fed during 2008, while the nation's financial system nearly melted down, made previously unknown loans to various financial institutions while also waiving conflict-of-interest regulations "and other legal niceties," Gillespie explained.

And only in September, ProPublica published an expose of how the Fed plays cozy and perhaps avoids it oversight mandate with too-big-to-fail institutions like Goldman Sachs.

Gillespie said the Fed's secrecy, and the growing non-partisan support for throwing back the curtains, "is hugely at odds with growing interest in transparency in all aspects of contemporary life. How is it that we can know more about the coffee beans we buy at the grocery store than how our money gets made?"

So why is the call for an audit still not getting results? According to Gillespie, the answer may lie with House Majority Leader Harry Reid, D-Nev., but he's not talking.

"Despite such a lopsided vote in the House, the measure will die in the Senate. It wasn't voted on before the pre-election recess, and Majority Leader Harry Reid will refuse to bring the matter up for a vote before the current congressional term expires in January," Gillespie predicted.

"Reid hasn't explained exactly why he won't allow a vote on the bill, which has 30 co-sponsors. He's keeping his reasons secret, which means that the Fed's secrets are safe for at least a little while longer. And that trust in government will keep shrinking, just like the value of a dollar has over the life of the Federal Reserve."

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The need to audit the Federal Reserve is one of the few issues on which both poles of American political thought are in rare agreement. Polls show up to 80 percent of Americans also would like an audit.
Gillespie, Fed, audit, money
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2014-59-06
Monday, 06 October 2014 02:59 PM
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