Chairman’s nerves show through when challenged on H.R.1207
Wednesday, July 29, 2009
Federal Reserve chairman Ben Bernanke appeared incredibly nervous during an interview aired last night on PBS’ NewsHour, particularly during a question on the ongoing effort to pass legislation that would see the Fed’s books being opened up to a general audit.
In a display that will greatly encourage those who continue for push for greater transparency of the privately run Fed’s actions, Bernanke stammered and stuttered his way through the interview, his voice shaking as he attempted to rail against calls to audit the Fed, reciting now familiar and standard lines of propaganda.
“There’s an effort in Congress, and in the House in particular, to audit what the Federal Reserve does, particularly in monetary policy. How do you feel about that?” asked PBS’ Jim Lehrer.
“So that bill, people don’t fully understand what that bill is about. It sounds like, audit the Fed, it sounds like ‘Let’s look at the books.’ That’s what it sounds like.” Bernanke spluttered.
Clearly flustered and sounding very unconfident, Bernanke continued:
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“What people don’t understand is that this bill would give the GAO, the GAO, the authority to audit monetary policy. And what does that mean? That means if the Federal Reserve decided a year from now that because of incipient inflation it was time to raise interest rates, that the Congress would say, ‘Ah, the GAO’s going to audit that decision. It’s going to subpoena your materials. It’s going to demand information from members of the FOMC. It’s going to evaluate your decision. It’s going to report to Congress.’ I don’t think that’s consistent with independence.” Bernanke said.
Watch Bernanke respond to the question regarding the bill:
Watch the entire PBS interview with Bernanke here .
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Bernanke essentially repeated the very same mantra he espoused during last week’s Financial Services Committee hearings, which was subsequently repeated in a Washington Post editorial , claiming that the bill will hand Congress the power to run monetary policy in the United States, reducing the Fed’s independence and politicizing decisions the Fed makes.
However, as Senator Bernie Sanders , sponsor of the Senate version of Congressman Ron Paul’s Federal Reserve Transparency Act, has pointed out, “We must not equate ‘independence’ with secrecy” where the Fed is concerned
“No matter how intelligent or well-intentioned the Fed chairman and his staff may be, it isn’t appropriate to give a handful of people the power to lend an unlimited supply of money to anyone it wants without sufficient oversight.” Sanders writes.
The bill would not give anyone in Congress or elsewhere the authority to sit in on Fed hearings, thus it would have no impact monetary policy. All it would do is provide answers to the American people as to where trillions of dollars of their money is disappearing to.
The legislation would simply amend existing law to allow the Comptroller General of the General Accounting Office to audit the Federal Reserve Board and its member banks.
As CBS News’ Declan McCullagh points out , in response to Bernanke’s defense of the Fed:
“This is an odd claim. If you read the bill (H.R.1207), it simply amends existing law to say “under regulations of the Comptroller General, the Comptroller General shall audit” the Federal Reserve Board and its member banks.”
“The Comptroller General is a Senate-confirmed official who’s also the head of the Government Accountability Office (GAO), a legislative branch agency organized under the U.S. Congress. In other words, we’re not talking about a political bomb-thrower, but a veteran civil servant tasked with important oversight responsibilities.” McCullagh explains.
Bernanke’s claim that the GAO “already looks at virtually all of our activities” is misleading to say the least. There is no oversight whatsoever regarding loans made by the Fed, which is why there has been no indication of the final destination of multiple trillions of dollars in bailout funds.
In addition, Federal Reserve meeting transcripts are not made publicly available until five years after the meetings occur.
As Ron Paul himself explained to Bernanke last week, the bill would do nothing to further politicize the Fed’s decision making given that the Fed is already overtly politicized anyway.
“Just the fact that they can issue a lot of loans and special privileges to banks and corporations, that’s political. This idea that it would be political because we know what happened afterwards just doesn’t seem to add up.” Paul beseeched.
In our report yesterday  we detailed how Americans are turning against the Federal Reserve, with just 30 per cent saying the agency is doing a good job, compared with over 50% when the question was last asked in 2003.
According to Gallup editor in chief Dr. Frank Newport, “Americans are blaming to some degree the actions or inactions of the Federal Reserve board” for the economic turmoil.
Bernanke’s doubtful PBS performance is sure to increase the numbers of Americans demanding more accountability.
“…it was the sight of Ben Bernanke, quavering before the audience, when I knew we were going to win this fight.” writes Adam de Angeli on Ron Paul’s Campaign for Liberty blog . “We’re growing bigger and better organized every day, while the banksters’ last desperate attempts to control the damage yield nothing.”