[Congressional Record: July 30, 2009 (House)]
[Page H9172-H9173]




              THE BIG GUNS HAVE LINED UP AGAINST H.R. 1207

  The SPEAKER pro tempore. Under a previous order of the House, the
gentleman from Texas (Mr. Paul) is recognized for 5 minutes.
  Mr. PAUL. Mr. Speaker, the big guns have lined up against H.R. 1207,
the bill to audit the Federal Reserve. What is it that they are so
concerned about? What information are they hiding from

[[Page H9173]]

the American people? The screed is: ``Transparency is okay--except for
those things they don't want to be transparent.''
  Federal Reserve Chairman Ben Bernanke argues that H.R. 1207, the
legislation to audit the Federal Reserve, would politicize monetary
policy. He claims that monetary policy must remain ``independent,''
that is, secret. He ignores history, because chairmen of the Federal
Reserve in the past, especially when up for reappointment, do their
best to accommodate the President with politically driven low interest
rates and a bubble economy.
  Former Federal Reserve Board Chairman Arthur Burns, when asked about
all the inflation he brought about in 1971, before Nixon's re-election,
said that the Fed has to do what the President wants it to do, or it
would ``lose its independence.'' That about tells you everything. Not
by accident, Chairman Burns strongly supported Nixon's program of wage
and price controls, the same year; but I guess that's not political. Is
not making secret deals with the likes of Goldman Sachs, international
financial institutions, foreign governments and foreign central banks,
politicizing monetary policy? Bernanke argues that the knowledge that
their discussions and decisions will one day be scrutinized will
compromise the freedom of the Open Market Committee to pursue sound
policy. If it is sound and honest, and serves no special interest,
what's the problem?
  He claims that H.R. 1207 would give power to Congress to affect
monetary policy. He dreamt this up to instill fear, an old statist
trick to justify government power. H.R. 1207 does nothing of the sort.
He suggested that the day after an FOMC meeting, Congress could send in
the GAO to demand an audit of everything said and done. This is hardly
the case. The FOMC function, under 1207, would not change. The detailed
transcripts of the FOMC meetings are released every 5 years, so why
would this be so different, and what is it that they don't want the
American people to know? Is there something about the transcripts that
need to be kept secret, or are the transcripts actually not verbatim?
  Fed sychophants argue that an audit would destroy the financial
market's faith in the Fed. They say this in the midst of the greatest
financial crisis in history, brought on by none other than the Federal
Reserve. In fact, Chairman Bernanke stated on November 14, 2007, that
``a considerable amount of evidence indicates that central bank
transparency increases the effectiveness of monetary policy and
enhances economic and financial performance.''
  They also argue that an audit would hurt the value of the U.S.
dollar. In fact, the Fed, in less than 100 years of its existence, has
reduced the value of the 1914 dollar by 96 percent. They claim H.R.
1207 would raise interest rates. How could it? The Fed sets interest
rates and the bill doesn't interfere with monetary policy. Congress
would have no say in the matter; and besides, Congress likes low
interest rates. It is argued that the Fed wouldn't be free to raise
interest rates if they thought it necessary. But Bernanke has already
assured the Congress that rates are going to stay low for the
foreseeable future, and, again, this bill does nothing to allow
Congress to interfere with interest rate setting.
  Fed supporters claim that they want to protect the public's interest
with their secrecy. But the banks and Wall Street are the opponents of
1207, and the people are for it. Just who best represents the
``public's'' interest? The real question is, why are Wall Street and
the Feds so hysterically opposed to 1207? Just what information are
they so anxious to keep secret? Only an audit of the Federal Reserve
will answer these questions.

                          ____________________