Congress to take closer look at Fed
A House panel has voted in favor of letting Congress take a closer look at the Federal Reserve. Bill Radke talks to Alisa Roth about what the measure means and why some Fed officials are worried about more transparency.
Federal Reserve seal on $100 bill (iStockPhoto)
More on The Economy
Links
- Audio: More about the Fed
Steve Chiotakis talks to economist Gary Schilling
TEXT OF INTERVIEW
Bill Radke: An amendment approved yesterday to the financial system overhaul bill in Congress would force the Government Accountability Office to look at everything the Federal Reserve does. Critics say the measure could undermine the Fed's work.
Marketplace's Alisa Roth joins us live from our New York bureau. Good morning.
Alisa Roth: Good morning.
Radke: This is in the House, and Texas Republican Ron Paul has been introducing some version of this for decades now. What's he looking for?
Roth: You know, in its most extreme versions, Paul has called for abolishing the Federal Reserve outright. This time, he's got a much tamer. He just wants the GAO to audit all of the Fed's business. This is really the first time in all the years that Paul has talked about this that the idea has gotten any play at all from the more mainstream elements in Congress.
Radke: Well, a bunch of stuff the Fed does is public -- the bailouts were public. Should we be demanding more transparency?
Roth: Obviously, it depends who you ask. I talked to Kenneth Kim this morning. He's a Fed watcher at a research firm called Stone and McCarthy. This is what he said:
Kenneth Kim From a public standpoint, you would like to have open deliberative discussions regarding matters that could affect the public as well as the U.S. government.
But then he went on to tell me some of the things that worry Fed officials about having more openness. Like for example, when banks that are members of the Federal Reserve system borrow money from the Fed at what's called the discount window.
Kim: If it became known in advance which institutions might be approaching the discount window, then there might have been a speculative run on those institutions, and then, you know, we could have had even more failures that could have dragged the financial system down quicker.
It's also worth mentioning here that there are plenty of people, including Barney Frank, who are coming down on the side of the Fed on this one.
Radke: Marketplace's Alisa Roth, joining us live from our New York bureau. Thank you.
Roth: You're welcome.
Comments
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From Providence, UT, 11/20/2009
Alisa Roth's story as it aired this morning was nearly entertaining. To paraphrase, "Ron Paul, in his more extreme moments, has called for abolition of the Federal Reserve." In his more extreme moments? Could Ms. Roth load up a story in a more journalistically pathetic way?
As embarrassing is the way you changed the transcript of the story, as above. Did the first copy not get the Stupid Check run on it prior to airing?
From North Miami Beach, FL, 11/20/2009
The story is technically true, but misses the larger point. Congressman Ron Paul (TX-R) is joined by his unlikely ally Congressman Dennis Kucinich (OH-D) in wanting to know what the Federal Reserve did with $4T to $9T it loaned (gave?) to banks. Professor Elizabeth Warren did know this in the movie CAPITALISM: A LOVE STORY and this has nothing to do with the usual loophole about controlling interest rates. "Show me the money!"
From Savannah, GA, 11/20/2009
In the story that aired this morning Alisa Roth acted like it would be a horrible thing for Congress to have oversight over the Fed and our country's fiscal policies. Isn't that their job (U.S. Constitution, Article 1, Section 8)?
From MD, 11/20/2009
I heard this report on the way into work. It was that 15 minute spot that aired, but it didn't include the same segment that is linked above. The segment that ran this morning, Friday Nov. 20th, was biased. It sounded like the Fed is honest and open about everything it does, but in truth, continually lies by saying "I see green shoots" but months later "maybe not" and "I will raise rates later" "or will I". It's a game of cat and mouse with our whole economy which Ron Paul's bill would address. The segment aired this morning completely missed that point. More transparency in the Fed is badly needed, and the spot aired talked more about oversight and control. You really think the minutes from the meets aren't sensored? You really think the the Fed can be completely open with the traders and the traders not affect the market? Truth is, the Fed is afraid of traders reacting to the truth and therefore the government (who appoints them) getting angry. Government power is already overshadowing..geez. Ron Paul's bill is more about clarity.
From Lexington, KY, 11/20/2009
Alisa Roth's "report" ( I am being charitable) on the move to audit the FED could hardly have been more facile and dismissive. The words could have come straight from Barney Frank's desk. The problems that the FED has cause since it's inception and the continued secrecy under which MANY of it's operations occur can only contribute to the continuation of the Boom/Bust cycles we have come to expect. If you want to know more about this issue then contact Ron Paul instead of parrotting Benanke talking points.
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