An audit of the Federal Reserve has become a topic in mainstream politics that is picking up steam. “The Federal Reserve Transparency Act”, which would take an unprecedented look inside the secretive banking cartel, has become a major issue in Congress. It passed the U.S. House in July with a bipartisan vote of 327-98, with almost half of the Democrats joining all Republicans minus one. Congressman Mike Michaud and Congresswoman Chellie Pingree both co-sponsored and voted for the legislation in the House.
It has reached a roadblock in the Senate however, with Senate Majority Leader Harry Reid refusing to allow S. 202 to the floor for a vote. While Senator Susan Collins recently joined a roster of co-sponsors that includes both parties, Senator Olympia Snowe has yet to join. Senator Snowe is retiring however, and her seat is up for grabs. With the issue of the Federal Reserve unlikely to go away, it is important that the next Senator from Maine support transparency. One candidate for this seat opposes the audit, however.
In an e-mail to Libertarian Party of Maine Secretary Aaron Quinn, the Angus King for U.S. Senate campaign takes a position opposed to auditing the Federal Reserve.
Thank you for your phone call last week and for your question about Angus’s position on auditing the Federal Reserve. I appreciate your patience in waiting for a response.
The financial operations of the Federal Reserve are currently audited by the General Accountability Office, and each of the twelve Federal Reserve Banks receives an annual audit from a third party accounting firm. The GAO audit of the Fed is a financial audit. It does not include a review of monetary decisions, i.e., the decisions as to whether to add or subtract liquidity from the banking system.
Congress already has a role in this process. The Board of Governors, the Chair and Vice Chair of the Federal Reserve are appointed by the President and confirmed by the Senate. Current law requires the Chair to report to Congress twice a year on the Fed’s monetary policy objectives.
The bill before Congress would not actually create an additional financial audit, but instead an audit of the decision-making process in setting monetary policy. Angus does not believe that allowing Congress to review and potentially politicize the argument process would be beneficial. Historically there has been an effort to maintain a limited space between political discussion and monetary policy decision-making, and he supports this position.
I hope this clarifies Angus’s position on this issue. Thank you again for your call, and please don’t hesitate to be in touch with any further questions.
Angus King for U.S. Senate Campaign
One must wonder why the former Governor of Maine opposes increasing transparency of a critical political institution. Currency is the foundation of the economy, as all transactions use it. Food, fuel, technology, everything, uses the Federal Reserve Notes, or “dollars.” An increase in the money supply, by printing more and injecting it into the economy, debases the value of the dollar and creates an imbalance in the economy. How does the market compensate that? Prices adjust, by increasing. When these prices increase, wages generally do not, and a greater price-wage gap is created. Does anyone believe that increasing prices on our food and gasoline is productive to economic growth?
And yet, as the push for transparency continues, it has been revealed that money has been printed in large quantities for bailouts and other purposes. As banks and corporations have been bailed out over the years, everyday Americans suffer as their hard-earned, but surely limited, dollars are devalued. The food in our local supermarkets have increased, making it more difficult to put food on the table. The price of the gasoline we put in our vehicles so we can go to our jobs has increased. Everything affecting our daily lives is increasing in cost. Unfortunately, however, there is no audit of decision-making related to the dollar. With Congress, there is a record, as is every other part of government. But not here.
Worst of all? Angus King wants to be the next United States Senator and doesn’t believe this is a problem.