[Congressional Record Volume 155, Number 176 (Tuesday, December 1, 2009)]
[House]
[Pages H13376-H13377]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  TRANSPARENCY AT THE FEDERAL RESERVE

  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, Federal Reserve Chairman Ben Bernanke does not 
want us to know any the details of the Fed's secret operations. This 
position is not surprising and has been typical of all central bank 
chairmen. Bernanke's stated goal is ``to design a system of financial 
oversight that will provide a robust framework for preventing future 
crises.''
  During its 96 years of existence, the Federal Reserve has played 
havoc with

[[Page H13377]]

our economy and brought great suffering to millions through 
unemployment and price escalation. And it has achieved what only a 
central bank can: A steady depreciation of our currency. Today's dollar 
is now worth 4 cents, compared to the dollar entrusted to the Federal 
Reserve in 1913. Ninety-six years should have been plenty of time for 
the Fed to come up with a plan for preventing economic crises.
  Since the Fed is the source of all economic downturns, it's 
impossible for any central banker to regulate in such a manner to 
prevent the problems that are predictable consequences of his own 
monetary management. The Federal Reserve fixes interest rates at levels 
inevitably lower than those demanded by the market. This manipulation 
is a form of price control through credit expansion, and is the 
ultimate cause of business cycles and so many of our economic problems, 
generating the mal-investment, excessive debt, stock, bond, commodity, 
and housing bubbles.
  The Federal Reserve's monetary inflation, indeed, does push the CPI 
upward, but concentrating on the government's reports of the CPI and 
the PPI is nothing more than the distraction from the other harm done 
by the Federal Reserve's effort at central economic planning through 
secret monetary policy operations. Real inflation, the expansion of our 
money supply, is greatly undercounted by these indices. In response to 
our latest financial crisis, the Federal Reserve turned on its printing 
press and literally doubled the monetary base. This staggering creation 
of dollars has yet to be reflected in many consumer prices, but will 
ultimately hit the middle class and poor with a cruel devaluation of 
their savings and real earnings.
  The Fed has clearly failed on its mandate to maintain full employment 
and price stability. It's time to find out what's going on. Instead of 
assuming responsibility for the Fed's role in the crisis, Bernanke 
brags about, ``arresting'' the crisis.
  I would suggest to Mr. Bernanke that it's too early to brag. Bernanke 
decries any effort to gain transparency of the Fed's actions to find 
out just who gets bailed out and who is left to fail. Instead, he 
proposes giving even more power to the Fed to regulate the entire 
financial system.

                              {time}  1945

  What he does not recognize--nor does he want to admit--is that he is 
talking about symptoms while ignoring the source of the crisis: the 
Federal Reserve itself. More regulations will never compensate for all 
the distortion and excesses caused by monetary inflation and 
artificially low interest rates. Regulation distracts from the real 
cause while further interfering with the market forces, thus 
guaranteeing that the recession will become much deeper and prolonged.
  Chairman Bernanke's argument for Fed secrecy is a red herring. It 
serves to distract so the special interests that benefit from the Fed 
policy never become known to the public. Who can possibly buy this 
argument that this secrecy is required to protect the people from 
political influence?
  My bill, H.R. 1207, has nothing to do with interference with monetary 
policy. This was explicitly stated in the amendment voted on in the 
Financial Services Committee. Bernanke's argument for protecting the 
independence of the Fed is his argument for protecting the secrecy of 
the Fed. Chairman Bernanke concludes that ``America needs a strong''--
think cartel--``nonpolitical''--think Goldman Sachs--``and 
independent''--think secret--``central bank with the tools to promote 
financial stability, in the midst of a horrendous financial crisis, and 
to help steer our economy to recovery without inflation.''
  This belief is a dream that one day will become a nightmare for all 
Americans unless we come to our senses, stop our wild spending, runaway 
deficits, printing press money, massive bureaucratic regulations, and 
our unnecessary world empire. A crucial step towards fixing these 
problems will be transparency of the Federal Reserve.

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