[Congressional Record Volume 155, Number 117 (Thursday, July 30, 2009)]
[House]
[Pages H9172-H9173]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              THE BIG GUNS HAVE LINED UP AGAINST H.R. 1207

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Texas (Mr. Paul) is recognized for 5 minutes.
  Mr. PAUL. Mr. Speaker, the big guns have lined up against H.R. 1207, 
the bill to audit the Federal Reserve. What is it that they are so 
concerned about? What information are they hiding from

[[Page H9173]]

the American people? The screed is: ``Transparency is okay--except for 
those things they don't want to be transparent.''
  Federal Reserve Chairman Ben Bernanke argues that H.R. 1207, the 
legislation to audit the Federal Reserve, would politicize monetary 
policy. He claims that monetary policy must remain ``independent,'' 
that is, secret. He ignores history, because chairmen of the Federal 
Reserve in the past, especially when up for reappointment, do their 
best to accommodate the President with politically driven low interest 
rates and a bubble economy.
  Former Federal Reserve Board Chairman Arthur Burns, when asked about 
all the inflation he brought about in 1971, before Nixon's re-election, 
said that the Fed has to do what the President wants it to do, or it 
would ``lose its independence.'' That about tells you everything. Not 
by accident, Chairman Burns strongly supported Nixon's program of wage 
and price controls, the same year; but I guess that's not political. Is 
not making secret deals with the likes of Goldman Sachs, international 
financial institutions, foreign governments and foreign central banks, 
politicizing monetary policy? Bernanke argues that the knowledge that 
their discussions and decisions will one day be scrutinized will 
compromise the freedom of the Open Market Committee to pursue sound 
policy. If it is sound and honest, and serves no special interest, 
what's the problem?
  He claims that H.R. 1207 would give power to Congress to affect 
monetary policy. He dreamt this up to instill fear, an old statist 
trick to justify government power. H.R. 1207 does nothing of the sort. 
He suggested that the day after an FOMC meeting, Congress could send in 
the GAO to demand an audit of everything said and done. This is hardly 
the case. The FOMC function, under 1207, would not change. The detailed 
transcripts of the FOMC meetings are released every 5 years, so why 
would this be so different, and what is it that they don't want the 
American people to know? Is there something about the transcripts that 
need to be kept secret, or are the transcripts actually not verbatim?
  Fed sychophants argue that an audit would destroy the financial 
market's faith in the Fed. They say this in the midst of the greatest 
financial crisis in history, brought on by none other than the Federal 
Reserve. In fact, Chairman Bernanke stated on November 14, 2007, that 
``a considerable amount of evidence indicates that central bank 
transparency increases the effectiveness of monetary policy and 
enhances economic and financial performance.''
  They also argue that an audit would hurt the value of the U.S. 
dollar. In fact, the Fed, in less than 100 years of its existence, has 
reduced the value of the 1914 dollar by 96 percent. They claim H.R. 
1207 would raise interest rates. How could it? The Fed sets interest 
rates and the bill doesn't interfere with monetary policy. Congress 
would have no say in the matter; and besides, Congress likes low 
interest rates. It is argued that the Fed wouldn't be free to raise 
interest rates if they thought it necessary. But Bernanke has already 
assured the Congress that rates are going to stay low for the 
foreseeable future, and, again, this bill does nothing to allow 
Congress to interfere with interest rate setting.
  Fed supporters claim that they want to protect the public's interest 
with their secrecy. But the banks and Wall Street are the opponents of 
1207, and the people are for it. Just who best represents the 
``public's'' interest? The real question is, why are Wall Street and 
the Feds so hysterically opposed to 1207? Just what information are 
they so anxious to keep secret? Only an audit of the Federal Reserve 
will answer these questions.

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