Bloomberg Publishes Hatchet Job On Paul Fed Audit Bill

A very curious Bloomberg piece snuck through the other day, just brought to our attention. The piece takes the topic of AIG bailouts into a discussion of auditing the Fed in general. This of course means they have to mention Ron Paul's wildly-popular grassroots HR 1207 -- which now has upwards of 200 co-sponsors; but ironically for an outfit that has FOIA'd the Fed, they do a great job of minimizing its importance:

The new Fed audit law differs from more intrusive legislation introduced in the House by Ron Paul, a Texas Republican, and in the Senate by Bernie Sanders, a Vermont independent. Those bills, which haven’t made it past the initial stage of being introduced in Congress, would remove limits on GAO audits of the Fed and direct the agency to issue a report on the central bank by the end of next year.

"Intrusive" is an odd term for legislation that would simply remove arbitrary limits on auditing this critically-important institution.

By comparison, when the FBI gets a warrant to raid a drug house, how would it be thought of if the owner of that house had a special deal with the government that they could determine the scope of the search -- even if it just meant that "certain doors of their choosing" could not be looked behind? Or perhaps any room could be searched, but the FBI must request it in advance, and the owner will take some time to "prepare" first. That would not be considered "audit power" worth much, would it? So why would we settle for anything less when it comes to the Fed?

The comment about the bill being merely "introduced" is rather disingenuous as well -- not many run-of-the-mill "just introduced" bills sport 200-odd co-sponsors, spurred on by grassroots demand.

Bloomberg goes on to quote Bernanke's soothing words:

“If Congress needs more information about the operations that we are doing, exactly how we manage our collateral, how we manage our lending, those sorts of things, I think we can talk to you about providing more information about that and, if necessary, working with the GAO,” Bernanke said at a Joint Economic Committee hearing at the time.

Oh, that's nice. So the FBI can submit a polite request to the drug lord that it would like more information on his operations (not even to do its own search, mind you). Come on now. Amusingly, in true gangster form, Bernanke follows up with:

“I certainly would resist any attempt to dictate to the Federal Reserve how to make monetary policy,” Bernanke said.

Since Bernanke is the Fed and he is talking to Congress, what the hell is this -- a threat?! Wow.

The piece instead features the watered-down Grassley clause passed May 6th whichith lets the GAO audit some Fed aid arrangements. It does not direct them to do so, so compared to the Paul legislation, it is just a fig leaf. Was it introduced to head off the full glasnost of HR 1207? The article ends with Grassley getting the last word:

“it is a reasonable step in the right direction, and it does not threaten monetary policy independence.”

We suspect the question on a lot of minds at this point is whether we really want this kind of "independence". How's that been working for the country -- now on its third major depression/stagflationary event since this august "independent" institution was founded.