[Congressional Record Volume 146, Number 32 (Tuesday, March 21, 2000)]
[Senate]
[Pages S1531-S1532]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          THE FEDERAL RESERVE

  Mr. DORGAN. Mr. President, I understand the Senate is about to 
adjourn for the day. I was not going to come to the floor. Then I 
thought I would not sleep much tonight if I didn't come to the floor 
and say what I think ought to be said about the Federal Reserve Board. 
Again, today in secret downtown they increased interest rates for the 
fifth time in a relatively short period of time.
  Will Rogers once said--and it is probably good to quote him in this 
room, where we used to have spittoons all across the Senate, I 
understand, well before I came here--``When there is no place left to 
spit, you either have to swallow your tobacco juice or you have to 
change with the times.''
  That is something the Federal Reserve Board would not understand.
  The fact is, they met today again in secret behind closed doors, as 
they always do, because it is the last dinosaur left in this town. 
Everything else is relatively open. But the Federal Reserve Board meets 
in secret. They decided to do so again today. They decided to increase 
interest rates once again.
  The last five interest rate increases, including this one today, mean 
that every family in America, on average, will pay an additional $440 
in interest charges this year. That is a tax on every American family. 
That was imposed on the shoulders of every American family, with no 
debate and no discussion. It was done in secret by the bankers down at 
the Federal Reserve Board.
  Just because I feel so kindly about the role they played, I figured I 
should show the American people at least who they are. As I have in the 
past, I provided their pictures, their salaries, and their education.
  Of course, if you put them all into a barrel and rolled them around, 
it wouldn't matter which was on the top; they still look the same. They 
still have the same education, they still make about the same amount of 
money, and they apparently still think the same. They all think this 
country is growing too fast, and they think there are too many people 
working. So they view themselves as a set of human brake pads whose 
design it is to slow down the American economy.
  The problem with that is, there is no evidence to support what the 
Federal Reserve Board has done today. Worker productivity is up. It is 
up substantially. The Consumer Price Index with respect to the core 
inflation rate and the Producer Price Index with respect to the core 
rate are not showing what the Federal Reserve Board is looking for; 
that is, a new wave of inflation in the American economy. In fact, 
inflation is well under control and the productivity of the American 
workers continues to rise.

  According to the Federal Reserve Board's own ``beige book,'' which is 
what they call it, wage pressures have actually eased in some parts of 
the country since late last year. Last year, productivity in this 
country rose by 3 percent. The final quarter of 1999 saw productivity 
increasing 6.4 percent, the largest rise in seven years. This surge of 
productivity by American workers pushed down unit labor costs by a 2\1/
2\ percent annual rate.
  The question is, Why does the Federal Reserve Board not want to allow 
workers who are more productive to share in this country's prosperity? 
Why is it the central bankers are desperately afraid of having folks 
who work on assembly lines, and are more productive for doing it, get a 
wage increase or a salary increase? The first sight of that and the Fed 
has an apoplectic seizure and decides it wants to tax every American 
with higher interest rates.
  I read the other day about a fellow named Walt Frazier. The Fed ought 
to invite Walt to town and bring him into their mahogany room before 
they close the door. The Washington Post wrote a story about Walt 
Frazier. Walt is a live chicken hanger. He works in one of these 
chicken processing plants. The live chicken hanger is the fellow in the 
front end of the room who pulls chickens by their feet and hangs them 
as they go around through the throat slasher and the other processes, 
and at the back end comes out a chilled, packaged chicken that goes to 
the store. Walt is a chicken hanger at the front end.
  The shift he works begins at 5:48 in the morning. He is done at 2:18 
p.m. in the afternoon. He grabs a live chicken every 2 seconds and puts 
that live chicken on a hanging machine that circulates. He lifts and 
hangs 10,000 chickens a day, the Washington Post said. That is 2\1/2\ 
tons of wiggling, fighting, clawing flesh. Walt works on the line. Do 
you know what Walt makes? For 20 years he has done that. He makes $8.88 
an hour or $18,470 a year. He had a couple of operations on his wrists 
because grabbing live chickens in a chicken plant means you get clawed, 
scratched, and beat up.
  The point about mentioning Walt Frazier is he is one of the folks who 
works in the chicken plant. He is more productive because of machinery 
and other things, but the Federal Reserve Board doesn't want to look at 
folks

[[Page S1532]]

who are working in those circumstances who, because they are more 
productive, ought to be able to earn more money.
  The Federal Reserve Board says: No, we don't want America to show 
greater gains for workers. We worry about that. We think that is 
inflationary.
  So what do they do? They keep slapping on new interest charges. It is 
a classic fight we have had over the past two centuries between those 
who finance production and those who produce and work in production. 
Those who finance have great friends at the Federal Reserve Board. The 
gold stars are the folks on the Open Market Committee who today helped 
the Fed Board of Governors decide that the American families ought to 
pay higher interest charges. The American people had no say. But the 
Federal Reserve Board did it because they tilt their policies toward 
the big money center banks and against the interests of working folks 
in this country.
  I say once again, as I have said on other occasions, the Federal 
Reserve Board could use a good dose of common sense. We have two 
vacancies. I have said repeatedly one ought to go to my Uncle Joe. My 
Uncle Joe used to fix generators and alternators in his garage. He 
worked with his hands and knows something about running a small 
business. None of these people on the Federal Reserve Board appear to 
understand the consequences of slapping $440 in additional interest 
charges on the American people. They can afford it. They are not 
worried about the effects of those working for a living on the assembly 
line who are trying to be more productive and who expect as a result of 
being more productive to get more income.

  The Federal Reserve Board is interested in money center banks. They 
see inflation under every cover and under every bed. Every moment they 
see new waves of inflation. I say to the Federal Reserve Board: You are 
wrong again. You have been wrong, wrong, wrong. Go back about 5 years 
and tell the American people what you said then: If unemployment falls 
below 6 percent, we will have more inflation.
  Unemployment has been below 6 percent for more than 5 years and 
inflation is down. Federal Reserve Board, tell the American people what 
you said about growth: If the country grows at greater than 2\1/2\ 
percent, there will be greater inflation.
  It has grown faster than that and the inflation rate has gone down. 
They have been wrong, wrong, wrong.
  Because they have the ability in secret to impose the added burdens 
and charges on the American people's shoulders, they do so, but that 
does not make it right.
  Will Rogers said: When there is no place left to spit, you better 
change with the times. This Federal Reserve Board is tinkering with the 
economy, which could well injure the economy, an economy which has 
produced many months of sustained economic growth. American workers 
deserve the opportunity to share in the benefits of that growth. I hope 
the Fed will think better of this strategy. It is the wrong strategy 
for this country.
  It is, if nothing else, therapy for me to say it because no one can 
have any impact on this board. It does what it does and says what it 
says with total impunity. Some day I hope that the Board of Governors 
and the presidents of the regional Fed banks, who have tilted their 
policy so in favor of money-centered banks, will actually consider the 
interests of working people in this country.
  I yield the floor.

                          ____________________