Examiner: Force the Fed into the sunlight

Today’s Washington Examiner editorial lends support to an issue libertarians have pressed for years — bringing transparency and accountability to the Federal Reserve.

Click here to read the editorial, or if you live in the metro D.C. area pick up a free copy of The ExaminerThe Examiner editorializes, in part:

Private bankers who run the Federal Reserve System have the power to pump hundreds of billions of dollars into the nation’s money supply, making each dollar in circulation automatically worth less. Any institution with that kind of power over the economic lives and fortunes of Americans should be operated in the open. That is why the Fed’s lack of transparency is troubling, to say the least. More than half of the members of the House of Representatives agree. There are 276 co-sponsors of Texas Republican Rep. Ron Paul’s Federal Reserve Transparency Act of 2009, which requires a full-fledged audit by the Government Accountability Office (GAO) and a report to Congress by 2010. Co-sponsor Brad Sherman, D-CA, was quite right when he stated that “anyone exercising governmental power should be subjected to governmental oversight.”…

Created by Congress in 1913 to address a series of banking panics, the Fed not only failed to see the 2008 recession coming, it was at the epicenter of the crisis. Its artificially low interest rates stimulated a real estate price bubble that was exacerbated by flawed mortgage products offered by banks it failed to regulate, just as Paul warned five years ago. The Fed also made highly controversial “emergency” loans to bail out failing companies, including American International Group, Inc. (AIG) – which used it to pay bonuses to its top executives.

Given this sorry track record, why does President Obama propose giving the Fed even more power to oversee financial institutions, regulate mortgage lending, and even decide which credit cards consumers can get?…Paul’s bill would require that Congress take seriously its oversight responsibility regarding the Fed.