Ron Paul’s Fed-Bashing Wins Over Lawmakers Wary of Bank’s Power by Catherine Dodge
Ron Paul’s Fed-Bashing Wins Over Lawmakers Wary of Bank’s Power
by Catherine Dodge
Recently by Ron Paul: Americans Deserve a Transparent Fed
For U.S. Representative Ron Paul, the ninth time may be the charm.
After fighting for decades to increase scrutiny of the Federal Reserve or abolish it, the Texas Republican’s proposal requiring audits of the central bank’s interest-rate decisions is getting traction.
The long-shot 2008 presidential candidate whose anti-tax, anti-government politics struck a chord with a swath of voters is again channeling public frustration with big government, bailouts and rising federal debt. And as Paul trains his sights on his favorite villain, the Fed, many in Congress are listening.
“We live in the age of the people demanding more transparency, and that came out of the failure of Congress to monitor the bailouts,” Paul, 74, said in an interview. “I was able to tap into that.”
Paul’s message, once delivered mostly from the political margins, has found broader acceptance as many lawmakers blame the Fed for failing to curtail excesses that led to the financial crisis.
These lawmakers say that as the Fed’s role has expanded, it hasn’t sufficiently accounted for putting taxpayers’ money at risk, including aid to companies such as Citigroup Inc. and American International Group Inc., both based in New York.
“He’s ready with an argument that fits the moment,” said Bruce Buchanan, a political scientist at the University of Texas in Austin. “It’s an argument that used to seem extreme, but now seems reasonable given the view the Fed contributed to the financial meltdown by failing to exercise due oversight.”
House Debate
The House is to start debate today on broader legislation overhauling U.S. financial rules. Included in it is Paul’s proposal to remove the shield on congressional audits of monetary policy.
Fed Chairman Ben S. Bernanke, at a Senate hearing Dec. 3, said Paul’s proposal could subject the central bank to political pressure and undermine its credibility.
“My fear is that if we were to take what might be perceived as an unpopular step, that Congress would order an audit, which would be a way, essentially, of applying pressure,” he said.
The Fed also faces scrutiny in the Senate. Banking committee chairman Christopher Dodd, a Connecticut Democrat, is sponsoring legislation to strip it of authority to supervise banks and protect consumers.
White House spokeswoman Jen Psaki declined to comment on Paul’s amendment. More than 300 House lawmakers, a majority of the chamber’s 435 members, have signed on to back it.
December 10, 2009
Dr. Ron Paul is a Republican member of Congress from Texas.
© 2009 Bloomberg
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