It's been a bittersweet week for Uncle Ben. First he's egregiously re-appointed to a new term by President Bush Obama. Then Judge Loretta Preska hits him with a Mike Tyson overhand right, and while still concussed and shaky, Bailout Barney brings out the 2 x 4.
At long last we have public comments from Congressman Frank on Ron Paul's bill to audit the Federal Reserve. And somewhat shockingly, at least based on his response in this town hall clip, Frank heartily supports HR 1207 and is working with Congressman Paul to steer its passage.
As we have surmised and have written several times, the component of the bill giving Congress power to oversee monetary policy (Fed interest rates), is being scaled back or perhaps tossed from the language of the bill entirely (it's not clear from his response). It appears that it was a mere device of negotiation, and has functioned as intended.
This is huge news and a big win for truth, justice and taxpayer sanity.
Transcript and video are inside. Halle-freaking-lujah.
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- "Under Section 13 (3) the Federal Reserve Act, [the Fed] can lend money to anybody they want. We are going to curtail that lending power. We are going to put some restraints on it. Finally we will subject [the Fed] to a complete audit. I have been working with Ron Paul, the main sponsor of that bill. He agrees that we don't want to have the audit appear as if it is influencing monetary policy as that would be inflationary and Ron and I agree on that."
- "One of the things the audit will show is what the Federal Reserve buys and sells, and that will be made public--but not instantly, because if that was made instantly you would have a lot of people trading off of that, and you would have too much impact on the market. Again Ron agrees with that, so we will probably have that data released after a time period of several months, enough time so it wouldn't be market sensitive. The House will pass [HR 1207] in October."
More transcription courtesy of The Washington Times:
- "I have been pushing for more openness from the Fed. I want to restrict the powers of the Federal Reserve. First of all, the Fed will be the major losers of power if we are successful, as I believe we will be, setting up a financial product protection commission. The Federal Reserve is now charged with protecting consumers. They were supposed to do subprime mortgage restrictions.
- Congress in 1994 gave the Fed powers to ban subprime mortgages. Alan Greenspan refused to do it. They had the power to ban credit card abuses. Under Greenspan they did nothing. Under Bernanke they started but only after Congress acted.That's one of the reasons why in the new consumer protection agency, we will take away from the Federal reserve the power to go consumer protection.
- Secondly, they have has since 1932 a right under Herbert Hoover to intervene in the economy whenever they could. Last September, the Federal Reserve they were going to advance $82 billion to AIG. I was kind of surprised and said, 'Mr Bernanke do you have $82 billion?' Mr. Bernanke replied, 'I have $800 billion and under section 13.3 of the Federal Reserve Act they can lend anything they want.'
- We are going to curtail that lending power. We are going to put some restrictions on it.
- Finally we will subject them to a complete audit. I have been working with Ron Paul, who is the main sponsor of that bill. He agrees that we don't want to have the audit appear as if influences monetary policy as that would be inflationary.
- One of the things the audit will show you is what the Federal Reserve buys itself. And that will be made public, but not instantly because if it was made instantly people would be trading off it, so the data would be released after a time period of several months, enough time so it will not be market sensitive. This will probably pass in October."
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