A Good Start
Last week, the media kept itself busy trumpeting Oprah’s upcoming retirement and Lou Dobbs’s unexpected resignation. Mrs. Palin’s solo comeback tour through the lower 48 had millions glued to their screens. And something extraordinary happened in Washington– though you’d never know it from The News.
In a mighty sucker-punch to the sanctity of the Fed, and to the chagrin of the banking industry, the Democratic party leadership, and of the very Beltway way of doing things, the House Financial Services Committee passed HR 1207; the Ron Paul - Alan Grayson “audit bill,” authorizing the Government Accountability Office to conduct the first real audit of the Federal Reserve in that institution’s seventy-year history.
The MSM has largely ignored the story—and perhaps with good reason. When an improbable coalition of progressives and libertarians, labor leaders and cold-war conservatives, led by a couple of self-admitted wingnuts and egged on by a cadre of moonbat bloggers manages to put aside its partisan bickering and outmaneuver the most powerful institutions on the face of the planet, it does not bode well for Business as Usual in our nation’s capitol. Or, by extension, their finger-puppets in the media.
Here’s what happened:
Back in February of this year, veteran free-marketeer, Ron Paul, R-TX, and wealthy freshman maverick, Alan Grayson, D-FL, introduced a bill that attempted to force some accountability for the roughly $4,000 per American man, woman, and child that the Federal Reserve has seen fit to distribute for us without our consent—and to who-knows-whom—in the wake of last autumn’s financial meltdown. The bill gained immediate bi-partisan support in the House and was, of course, immediately attacked by the Powers that Be as needlessly intrusive, inflationary, and a threat to the independence of the central banking system. “Just another damned excuse for Congressional meddling,” was among the kinder accusations I heard bandied about.
The bill worked its way through committee and finally came up for a vote on Thursday. It was challenged by a last-minute, competing version of the proposal, which was so watered-down it would have essentially gutted the audit by posing a host of restrictions on what could and could not be presented for GAO examination.
This “serious compromise,” as these challenges are known, proposed by FIRE’s own point-man, Mel Watts, D- N.C., was unexpectedly supported by key Democrats like Chairman Barney Franks—who had spent the last year proclaiming his support for an audit. Franks argued that Congressional interference in the workings of the Fed could have an inflationary effect on the economy, and “too much transparency” could compromise national security.
A flurry of eleventh-hour lobbying by “a cross-section of prominent economists,” as they called themselves, (seven out of the eight of whom, as it turned out, had extensive dealings with the Fed, and half of whom are currently serving on the Fed payroll,) was circumvented by some inspired procedural maneuvering on the part of Paul’s supporters. Bolstered by a letter organized by liberal blog, FireDogLake.com, Grayson managed to convince wavering Democrats that their liberal base was behind the bill. Bucking Frank, Democratic support held, and the bill passed in a 43-26 landslide.
Although its ultimate signing into law is uncertain at best, Thursday’s vote is notable on several levels. Most significantly, it serves notice to the Fed, the banking industry, and lawmakers of all persuasions, that when an angry and committed populace rallies behind a just and reasonable cause, no amount of official “entitlement” is going to deter them.
Secondly, it represents a crack in the strict enforcement of party line politics. Although the GOP supported this bill for laughably hypocritical reasons—after all, no one could credibly argue that Paulson/Geithner, Greenspan, Goldman, et al are socialist lackeys—it was the Democratic holdouts and their progressive allies who were responsible for finally passing the bill that Dr. Paul has been proposing in one iteration or another since 1983.
Say what you will about the motley sponsors or their ideological eccentricities, this is our money they’re handing out. This is our legacy they’re suborning to their private ends. These, supposedly, are our representatives, not the paid-for handmaidens of an entrenched corporate oligarchy. And these people stood up for it! No wonder the MSM wants to brush this issue under the carpet in favor of their usual mind-numbing drivel.
That Congress, our institutions, and our futures are owned and directed by a few favored entities may have been acceptable when the economy was booming and the nation was an undisputed powerhouse, but seventy years behind a veil of secrecy has fostered a central banking system that has shown itself to be intrinsically incompetent, if not outright corrupted. And seventy years is long enough.
Yes, there are dangers inherent in a free and open society. Granting Congress—and this would be our Congress, with all its hemi-brained knuckleheads—oversight of an institution as complex and critical to our international functioning as the Fed, is a scary proposition indeed. And giving it a California-style legislative initiative so it can manipulate monetary policy for expedient political ends would be the stuff of nightmares.
Then there is the argument that the Fed (and perhaps the judiciary) are the only independent national institutions America has left. Do we really want them subjected to the political whims of a largely uninformed electorate?
But as we have seen with our military and security apparatus, the costs of non-transparency are just as troubling, and after all, the Paul-Grayson bill simply authorizes an audit of the Federal Reserve—not its abolition. And audits are by definition, an accounting after the fact. So the argument that Congress may use the audit process to unduly influence monetary policy loses some of its steam—on this track at least.
Fraught with unknowns though it may be, allowing an entitled and unregulated shadow agency to continue disbursing trillions of our tax dollars to favored entities is far more disturbing. As Congressman Grayson said in a radio interview with Salon’s Glen Greenwald last April,
“Let’s suppose for the sake of the argument, that Mr. Bernanke decides to give a billion dollars to a fledging institution called the Dick Cheney Savings and Loan, and its only asset was a numbered Swiss bank account. How would we know? How would we know that that happened? The answer is, if you take the Federal Reserve’s view of things, we wouldn’t. And that’s disastrous.”
To the politically idealistic among us, this small mutiny among principled elected officials could herald the rebirth of a true populist democracy in the United States; one in which the partisan dictates of competing ideologies are set aside in the interests of bringing accountability and transparency back into the legislative process. Perhaps this truly representative vote is the beginning of the end for the old boy, business-as-usual power base that has so strangled our market economy and the very governance of our Country. At least it’s a good start.
And that’s a reason to be Thankful.
Travel well. Eat safely!
by ahansen
