Tuesday, May 11, 2010

Fed Independence is Sacrosanct -- Kill the Sanders Amendment

Over at e21, which is an economics and finance blog and part of my daily reading menu, is a staff editorial on the need for maintaining the independence of the Federal Reserve. e21 is responding to the growing number of adherents to the Sanders Amendment, which to my eyes appears to be nothing more than a blatant power grab and foolish attempt to politicize the Fed. The popularity of Sanders' folly is driven, in part, by the inability or unwillingness of certain segments of the population to comprehend a very demanding science. Writes the editor:

While this information is more than adequate for those interested in understanding the mechanics of the emergency lending programs that saved the global financial system, it does not suffice for conspiracy theorists eager to tie the Fed to Saddam Hussein and Watergate. Since every $100 bill circulating internationally is a Federal Reserve Note, it is not unreasonable to think extremists could tie the Fed to funding for international terrorism, the narcotics trade, or whatever other illicit transactions are conducted with U.S. dollars.
Fed Independence is Sacrosanct | e21 - Economic Policies for the 21st Century

The editorial provides numerous links to Fed-hosted websites that provide a better accounting of Fed activities, assets and policy decisions than what we get from the Executive Branch, or even your garden variety "too big to fail" bank like BofA, Goldman Sachs or Citibank.

I can see no additional benefit whatsoever by adding another layer of oversight to an already open-books process.  It runs the calamitous risk of politicizing monetary policy.  No amount of oversight is going to satisfy the hunger for the conspiracy nuts.  They're always going to believe that the Fed is hiding something of great international importance.  But no amount of oversight or control will be enough for progressive socialists like Sanders, either.  It's not about answering questions for these people.  It's about extending power and control.

The Sanders Amendment must be defeated, and if it makes it into the final legislation, it must be vetoed by the President.

Extra Point: The conspiracy theorists tend to originate from the right. Ask yourself: Does Bernie Sanders have a solid conservative basis for auditing and greater oversight?