Research & Commentary: Federal Reserve Transparency
Given the enormous investment of current and future taxpayer dollars--$12.7 trillion--in remedying a credit crisis traceable in large part to policies of the Federal Reserve, there is a growing call to open to the public how the Fed conducts its business, which currently is a tightly guarded trade secret.
Led by Rep. Ron Paul (R-TX) and Sen. Bernie Sanders (I-VT), legislation mandating a thorough audit of the Fed is currently moving through Congress. The improved audit requirement would eliminate many exemptions in the current annual audit and include a wider examination of the Fed's operations.
The Fed plays according to a different set of rules than the rest of us. The average American has to work hard to earn money to make a living, gaining it through our investments of labor and money. The people who run the Fed, by contrast, don't suffer the consequences of their actions. That enables the Fed to print money with reckless abandon, isolated from the damage its rampant injection of cash will have on the savings of hard-working Americans today and in the future.
Since the creation of the Federal Reserve in 1913, the dollar has lost 96 percent of its buying power, with one-quarter of the loss coming in the past few years. During the pre-Fed era, 1800-1913, when the dollar was backed by gold, it consistently retained its value, and purchasing power increased by 70 percent.
A clear and transparent monetary system is necessary to ensure that any steps taken by our central bank serve the best interests of the people.
The following articles address the issue of Federal Reserve transparency.
Fed Audit Supported By 75% Of Americans: Survey
A new survey shows 75 percent of Americans back auditing the Federal Reserve, according to Rasmussen Reports.
Does Fed Transparency Fuel Growth?
Frank Shostak, an adjunct scholar of the Mises Institute, says the Fed's lack of transparency plus bad monetary policy (transparent tampering) under the banner of achieving price stability might damage the economy.
Federal Reserve Transparency and Financial Market Forecasts of Short-Term Interest Rates
This study from Eric T. Swanson of the Board of Governors of the Federal Reserve System demonstrates U.S. financial markets benefit from increased central bank transparency.
The Fed's Road toward Greater Transparency
This article is based on the keynote address delivered by Ben Bernanke, chairman of the Board of Governors of the Federal Reserve System, at the Cato Institute's 25th Annual Monetary Conference in Washington, DC, November 14, 2007.
Bringing Transparency to the Federal Reserve
A Cato Institute podcast featuring Rep. Ron Paul (R-TX); with comments by Gilbert Schwartz, partner, Schwartz & Ballen LLP, former associate general counsel, Federal Reserve; and Bert Ely, president, Ely & Company, Inc. Moderated by Mark Calabria, director of Financial Regulation Studies at the Cato Institute
Federal Reserve Cannot Account for $9 Trillion
This article and online news podcast examine the Fed's difficulties in keeping track of the money it has been lending out, losing track of $9 trillion.
Who Owns the Fed?
Bill Woolsey of the Liberty Foundation examines the authority behind the Fed.
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other environment topics, visit The Heartland Institute's Web site at http://www.heartland.org and PolicyBot, Heartland's free online research database.
If you have any questions about this issue or The Heartland Institute, you may contact me at 312/377-4000 or firstname.lastname@example.org.