So here you are. You’ve decided to take the plunge and learn more about H.R. 1207 – The Federal Reserve Transparency Act of 2009. Don’t worry. This isn’t a long article with tons of financial jargon, nor should it be. The basic premise is this: in a free society, government is answerable to an enlightened people and keeps no secrets from the many for the benefit of a few well-connected individuals.
While most of the US Code is jumbled and made confusing by legalese, when it comes to the Federal Reserve, the message is crystal clear: ACCESS DENIED. See for yourself, the following is text straight from the law:
“Audits of the Federal Reserve Board and Federal reserve banks may not include:
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1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;”
This just means that when foreign governments, banks and other international institutions end up owing Wall Street banks, the Federal Reserve can give their central banks money to pay back Wall Street without anyone knowing. In plain terms, it’s just another way to bailout Wall Street without having the transaction reach the light of day.
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2) “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;”
This is pretty much everything under the sun. It’s a blanket clause that basically says the Fed’s most basic functions, which are of the utmost importance to the economy, cannot be audited. Notice how it says “reserves of member banks.” This basically allows banks to operate without letting their customers know their true health. If we don’t Audit the Fed, no matter how many phony “stress tests” D.C. performs, we’ll never truly know the health of America’s largest banks. And they would like to keep it that way.
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3) “transactions made under the direction of the Federal Open Market Committee;”
This committee is more powerful than any committee in Congress. For instance, it determines its own organization! No laws, no rules. Just whatever they’d like. It has been cited in several sources as the “principal organ of United States monetary policy.” Imagine if decisions made by government regarding fiscal policy, or taxation, weren’t made public? Would that be proper representative government?
Open market operations are the purchasing and selling of government securities. One would think Congress would be able to ask about its own government’s securities. As it stands, Congress cannot.
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4) “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.”
If clauses 2 or 3 weren’t large enough blankets, this one is. If anyone at the Federal Reserve even talks about anything mentioned in (1)-(3), the public can’t know about it. So that basically covers everything the Federal Reserve does, the institution charged with taking care of the economy’s money supply and banking industry.
It is very convenient for the Federal Reserve Board that it does not have to share any of this information. If concerned citizens want to find out what role the Fed had in creating the current crisis, the Fed can quietly point to Title 31 and tell the Comptroller General, “Sorry, I don’t care what the people say, we’re not discussing our continuing series of bailouts to Wall Street, the government and other well-connected CEOs and corporate boardrooms.”
Barney Frank was recently giving a speech in which he argued the Federal Reserve was doing just fine and therefore it didn’t need to be audited. Right.
No thank you. The whole point of representation is to have public officials protect their constituents by doing three things:
1) Public officials should make sure government is responsive to citizens by passing laws that conform to their wishes.
2) Public officials should protect their citizens by voting against laws that would amount to democratic tyranny. Remember, votes are not used to determine the morality of laws, only whether people approve of them. People can approve of immoral laws, and it is the duty of public officials to stop them from passing.
3) Public officials should make sure their constituents have access to government records to make sure no corruption is taking place. Think about secret trials. If citizens are not allowed access to government records about trials, anyone can be imprisoned, tortured or executed for any reason without a single soul knowing why. In this situation it is not enough that legislators know what’s going on. As it has been made clear by history, legislators can find out about the most heinous actions and let them slide.
And that’s the true point of citizens having access to government records, Mr. Frank. To make sure when you say things are alright, you are doing your job. When you say everything is alright, not only do we have to verify that claim, but whether or not you were acting in good faith when you made it. And, no, once again, we’re not going to take your word for it. A free people should never have to.
In short, it’s not the job of public officials to pat citizens on the back and say, “Just trust me, everything is alright.”
And this is why we need to Audit the Federal Reserve. There has been too much trust given to politicians and too much of our money making its way into black holes. It is a shame that it took trillions of dollars in bailouts to get to a point where people demand accountability from their public officials, but at least the day came.
So now is the time to make sure the Federal Reserve is no longer operating in secret. To make sure the trillions of dollars it creates out of thin air are accounted for. Once they are, I am sure Americans will be convinced of the pernicious nature of the Fed.
