The Independence of the Fed

Dave Johnson

Reps. Ron Paul and Alan Grayson are trying to get the Federal Reserve audited. Last week the House Financial Services Committee passed an amendment to their financial regulatory reform bill that would mandate an audit.

The Audit the Fed Coalition is trying to get HR 1207 and S 604 enacted.

Opponents say that an audit threatens the Fed’s “independence.”

So … Have any of you heard the name Stephen Friedman, former Chair of Goldman Sachs? While still on the Board of Goldman Sachs he was Chairman of the Federal Reserve Bank of New York. Now there’s some independence for you! (Never mind the stuff about buying GS stock after the Fed became their regulator in late 2008, etc.)

I’m just sayin’… one person’s “independence” is another person’s … something else. The Fed is not independent of the giants of the financial sector. Of course we want independence so they set interest rates based on sound policy and independent of political considerations. So when do they start doing that?

This post originally appeared at Open Left.

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