Senate Votes for Audit of Fed (96-0) | Hacker News Reader

Senate Votes for Audit of Fed (96-0)

nasdaq.com

29 pointsmojuba24 comments

It's just a dog and pony show with little meaning:

"Audits of the Federal Reserve Board and Federal reserve banks may not include—

transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;

deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations;

transactions made under the direction of the Federal Open Market Committee; or a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to clauses (1)–(3) of this subsection."

Senate votes for toothless, meaningless lipservice. This one-time 'audit' isn't going to accomplish much, unfortunately. I'm glad that this step is being taken, but I'd much rather see the original language restored.

I think the one thing saving us from hyperinflation is the lack of political control and influence over the FED. You see hyperinflation in currencies where the ordinary government has control and influence over the central bank, because they just use the central bank's inflationary power to boost spending. The FED is independent from Congress for a reason, and an ongoing power to audit threatens that independence and, by extension, our currency.

A one-time audit for the bailout will accomplish the main objective people have been asking for--accounting for all the bailout--without threatening the operational independence of the FED.

So why not have a one-time audit of the rest of the Fed's activities?

I don't know if that's a good idea or not. People are mostly worried about the bailout, so auditing the rest of the FED's activities is out of scope. I think the relevant boundary is between accounting for a (legitimately questionable, expressly Congressionally-authorized) bailout and going on a general crusade against the FED.

The one thing separating us from hyperinflation is about 20 years.

"Senate votes for toothless, meaningless lipservice." ... "I'm glad that this step is being taken,..."

Can't say I agree with you at all there. Instead of addressing an issue, they voted 96-0 in favor of 'meaningless lipservice' so that they can say they voted in favor of something useful.

Mind characterizing the differences between the original and the passed amendment?

Surprised to see this on HN since I've actually been working on it. Basically, the original gave full, permanent audit authority to the Government Accountability Office. This one requires a one-time thorough audit of the bailout-type expenditures and not much else.

I'm surprised Bernie Sanders still voted for it, then...thanks for the info, and also kudos on BP! :)

aaronsw hits it on the head. Under the original, Congress gets to perform a complete audit of all the Fed's activities. Under the passed version, Congress will perform a one-time audit of TARP. I'm less concerned with the ongoing audits (although I'd prefer they remained) and more concerned with the depth of the investigation that will be undertaken.

''' "This amendment begins the process of lifting the veil of secrecy of perhaps the most powerful federal agency," Mr. Sanders said at a news conference after the vote. '''

Am I mistaken in thinking that "the Fed" is not a federal agency? Or is "the Fed" as a whole generally considered one because of the Board?

You're right. The federal reserve is a quasi private/public entity. It's a private organization with the chairman appointed by the federal government.

non-paywall source:

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?stor...

WSJ showed the full article when I opened it through Google News Search... didn't know even WSJ does the dirty tricks with referrers.

WSJ isn't doing it. It's evidence that Google is 'stealing' from Rupert. Google is allowing people to read WSJ articles that are supposed to be behind a pay wall... </sarcasm>

FWIW, RefControl extension for Firefox can be used to force any referer (sic) header value for websites you specify. Useful for the Financial Times, Barrons, etc.

I question why they want to see where the FED spent the money. Is it actually because they care, or they want to get in on all the wheeling and dealing with the banks? I agree with transparency, but what is the true motive of the politicians? I think it will be to line their pockets.

Whats the reasoning behind this down vote? I like many other Americans these days do not trust the politicians currently. I am just pointing this out. If they do see where the FED spends their money, they could look at a bank and say hey, give me money in my next campaign or I will close you down.

Ron Paul is known gold bugs' favorite, so undermining the Fed by any means is definitely going to score some points for him.

For the longest time there was a theory called "starve the beast". The idea is that Republicans interested in reducing the scope of the federal government could cut taxes and actually increase spending, forcing a deficit crisis and a sudden paring-back of the government (similar to the now famous Greek "austerity measures") and creating a permanent distrust of big government.

I bring this up because it seems like a similar tactic could be applied to the FED. The FED doesn't hyperinflate because there's no oversight or control by Congress--if there was oversight, Congress would do all they could to get the FED to hyperinflate just to increase spending. Maybe goldbugs want to introduce permanent oversight and control over the FED just to cause that hyperinflation, just so they could turn around and say "Look! Central banks are untrustworthy!".

There are lots of similar examples on the left, whether deliberate or accidental--regulating certain industries within inches of their lives (healthcare) and then pointing to it as a market failure.

"Starve the Beast" is a surprisingly bipartisan tactic. For example, it's no secret on the right that entitlement spending has the US government on a course towards bankruptcy. So the right wing tends to think the left wing is stupid when they support even more generous benefits.

But I read an interview with Paul Krugman the other day where he acknowledged the fact that our entitlements are unsustainable. Of course, having a Nobel prize in economics, he would not be so blind as to miss our looming national bankruptcy. But he figures if the public finances get bad enough, then politicians will be forced to raise taxes and/or nationalize health care, i.e. follow the leftist plan. The theory is that if politicians play chicken with global debt markets then eventually they will be forced to swerve.

Krugman has more faith in politicians than I do. I think the politicos are going to drive us off a cliff.

Starve the beast comes in many guises. Even the most shrill critics of it's practice by the right wing (such as Mr. Krugman) practice it themselves. I don't think any such tactics are terribly smart.

yeah, that's second thing I thought as well. GOP is definitely on this big time. But unanimity of this totally gives populism of the bill out.

about time

Reply on news.ycombinator.com