Friday, August 28, 2009

Rep. Frank: House Will Pass Ron Paul’s ‘Audit the Fed’ Bill This Year

,Congressman Barney Frank (D-MA) has told a Massachusetts town hall that Congressman Ron Paul’s (R-TX) bill to audit the Federal Reserve bank will clear his chamber by October.

Over half of the House members have signed on to the bill, H.R. 1207.

“Here’s what we plan to do: I want to restrict the powers of the Federal Reserve in a number of ways,” he said. “First of all, they will be the major losers of power if we’re successful, as I believe we will be, setting up that, uh, financial product protection committee.”

The financial product protection committee Frank is referring to is probably the Consumer Protection Financial Agency, where it is rumored that Obama will name Elizabeth Warren to head. Trust me, if you have to choose between Bernanke and Warren, take Bernanke every time. Warren does not understand item one about economics and has never seen a regulation she didn't like. Then ,of course, there are her ties to ACORN.

Here's the difference between Bernanke and Warren. Bernanke doesn't want to destroy the country, he wants to loot it. Warren wants to destroy it.

As I have pointed out a number of times before, Ron Paul has the best of intentions but, he is playing with fire here.

If the left gains control of this Bill, and it appears they might, they will do to the financial sector what they are doing to healthcare.

“The Federal Reserve is now charged with protecting consumers,” continued Frank. “They were supposed to do sub-prime mortgage restricted … Congress in 1994 gave the Federal Reserve the power to adopt rules to ban bad sub-prime mortgages. … They have the power to ban credit card abuses. They have the power to do most of it. They, under Greenspan, did nothing.

“Under Bernanke, they started to do things, but only after Congress started, when I became chairman of the [House Financial Services Committee], we began to act on these things: Sub-prime mortgages, credit cards, overdraft … And after we started, the Fed did. So, that’s why one of the reasons why in the new consumer protection agency we will take away from the Federal Reserve the power to do consumer protection.”

Frank added that Congress will reverse an action by the Democratic Congress of 1932 that gives the Fed authority to lend money at will.

“Under section 13.3 of the Federal Reserve Act, they can lend money to whoever they want,” he said. “We are going to curtail that lending power. We are going to put some constraints on it.”

He concluded: “Finally, we are going to subject them to a complete audit. I’ve been working with Ron Paul, the main sponsor of that bill …” Several in the audience applauded. “He believes that we don’t want to have the audit appear as if it is influencing monetary policy because that would be inflationary … One of the things that will show you is what the Federal Reserve buys and sells. That will be made public, but not instantly. If it were instant, you would have a lot of people trading off that and it would have too much impact on the market. Again, Ron agrees with that. So, we will probably have that data released after a time period of several months — enough time so it won’t be market sensitive.”

I am afraid if this bill passes, Ron Paul's work will have only begun, since he is going to have to steer this away from those who seek to gain control of the Fed so that they can print money for their own set of cronies.

Here's the video of Frank's remarks:

1 comment:

  1. Interesting news. Although I will believe it when I see it pass the Senate and get passed into law, I am glad to hear that the veil of secrecy around the Fed might soon be pierced.

    But wait, are we to object because we want instead a more powerful money czar? A benevolent dictator for all things financial? That covers a lot.

    To save ourselves from Congress in our second-best world, it is suggested we'd better choose the benevolent dictator Gentle Ben Bernanke, to be renamed Benevolent Ben, and grant him powers to do whatever is necessary without oversight, without audit.

    Benevolent Ben was willing to take orders from the looters-in-chief at the Treasury because the country faced a national emergency. Separation of powers? Not here, not in an emergency. Treasury said Goldman was too big to fail, and so the Fed let them tap easy Fed money for big profits that got personalized in a big way. Looting indeed, the public-private partnership way!

    No spotlight, though, because our Benevolent Dictator Ben needs his oligarchy support network. Team-Player Benevolent Ben, thoughtfully reappointed in advance for another 4 years with a couple newly appointed colleagues to make a gang of 3 on the 7-member Board of Governors. Come June, it can become the majority gang of four. Not bad for a first-term Obama. Other Presidents have not had that power. We can thank the Democrats who blocked Fed candidates in the Bush years for this gift of power to Obama.

    Helping out the team is the helicopter with no-scatter blades that drops the cash still in sacks directly into the power elite target zones. And here us economists always thought that the helicopter money drops were intended to scatter the money around. Ha!

    So, are economists to become fans of secretive benevolent dictators now? I always thought that was a straw man model of a government that would not work, both because power corrupts away the benevolence and because people are themselves the most efficient selectors of value, and make their selections in a decentralized, competitive marketplace. Losers in that marketplace would not be bailed out.

    Obviously, I must be out of date. All power is to be collected under one roof in Washington, and the details must remain secret for our own good, fools that we know we must be.