[Congressional Record Volume 140, Number 115 (Tuesday, August 16, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 16, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                       THE FEDERAL RESERVE BOARD

  Mr. DORGAN. Mr. President, I am told by my young son--and I believe 
him to be accurate because he knows more about dinosaurs than most 
anyone I know--that the largest living thing ever to have roamed the 
Earth is a dinosaur called the Brontosaurus. The Brontosaurus was 
apparently as large or nearly as large as an 18-wheeler truck with a 
brain no bigger than the size of my fist.
  Using dinosaurs as a comparison, the Federal Reserve Board, which is 
a remaining dinosaur on our Government, today, took action to increase 
interest rates by one-half of 1 percent once again. I will not describe 
the brainpower it took to do that because we have a lot of people who 
have good academic credentials, and I think they are plenty smart, down 
at the Federal Reserve Board. But it surely is an institutional 
dinosaur. It is a large central agency accountable to no one in this 
country.
  The Federal Reserve Board met this morning in secret, behind closed 
doors, and took action to hike interest rates by one-half of 1 percent. 
The Fed's best friends are the big-money central banks, and they serve 
that constituency faithfully, I guess.
  This is the fifth time in 7 months they have increased interest rates 
in our country. It is an outrage. Do they live in a different world 
down at the Federal Reserve Board? Do they breathe different air or 
lack oxygen when they make decisions? What on Earth would allow them to 
conclude that what we need to is increase interest rates at a time 
when--coming out of a recession--we have gotten toward cruising speed 
in our economy, but are beginning to slow down because of previous 
actions of the Fed? Nevertheless, they take more action to put the 
brakes on the American economy. It is exactly the wrong solution at the 
wrong time.
  There is no credible evidence of inflation. For 4 successive years 
inflation has decreased, and it continues today. The action by the Fed 
is wrongheaded, and it will hurt this country.
  Inasmuch as we created this institution early this century, I hope 
that enough of us care about what they are doing to decide to reform 
the Federal Reserve Board. It is now a strong central bank accountable 
to no one. It recognizes and pays homage to the big money center banks 
and to those vested interests in this country that have wealth. They 
take action to support and to nurture their interests at the very time 
the action injures the interests of most American families, and Main 
Street businesses.
  Mr. President, I needed to say that because the Fed just in the last 
hour, raised interest rates which will be a tax on every American 
family. It is bad public policy. We cannot do much about this at this 
moment because it is unaccountable. But we ought to do something in the 
long term to reform this institution so it is more accountable to the 
American people.

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