Federal Reserve Chairman Ben Bernanke must know he’s in trouble. This week he completed a “town hall”-style meeting for PBS television to promote the Federal Reserve and suppress what appears to be overwhelming congressional support for an independent audit of the Fed.

The Federal Reserve Bank is in charge of setting interest rates, and its suppression of interest rates to historic lows beginning in early 2000 made it almost singlehandedly responsible for the housing bubble, and therefore its subsequent bust. The Fed has also doubled the supply of money in circulation over the past year and has lent out trillions of dollars to businesses and foreign central banks without any detailed disclosure to Congress or the public.

Thus, it’s not a surprise that a recent poll found that only 30 percent of the American people thought that the Federal Reserve was doing a “good” or “excellent” job. That’s about the same percentage of people who supported George W. Bush in his waning years as president, and it ranks the Federal Reserve Bank lowest among a survey of nine government agencies. Americans rate the Fed even lower than the Internal Revenue Service. It wasn’t always bad news for the Fed. As many as 53 percent of Americans thought that the Fed under Alan Greenspan was doing a good job as it was blowing up the housing bubble back in 2003.

Rep. Ron Paul’s legislation to have the General Accountability Office conduct an independent audit of the Fed (H.R. 1207) has 276 cosponsors, which is about two-thirds of the entire House membership. Recently introduced companion legislation in the Senate (S.604) already has 19 cosponsors.

Bernanke told PBS viewers that he opposed Rep. Paul’s bill because "I don't think that's consistent with independence. I don't think the American people want Congress running monetary policy. That's exactly what (the bill) would do.” Actually, it wouldn't. It would simply tell Congress where the money is going, and where it has gone.

But somebody should tell Bernanke that the Constitution requires Congress to run monetary policy. In fact, the Congress is given exclusive power to regulate the value of money underArticle I, Section 8 of the Constitution:

The Congress shall have power …to borrow money on the credit of the United States… [and] to coin money, regulate the value thereof.

Bernanke added that “there’s a lot of evidence that when politicians make monetary policy, you don’t get good results.” Of course the Federal Reserve was the body overseeing the interest and credit policy that got us into the mess we find ourselves in today. Bernanke himself said to PBS viewers that his monetary policies brought us up to the brink of “the worst financial crisis, certainly since the Great Depression, and possibly including the Great Depression.” Suddenly, not getting “good results” doesn’t sound so bad.

One question fielded on the PBS show asked about the Federal Reserve’s current attempts to lend more money and loosen credit markets after a bubble and bust based upon too much borrowing and too easy credit. The viewer asked: “Isn’t that like giving a drunk a bottle of whiskey and calling him cured?” Bernanke had an answer ready at hand. “We need to have a middle course,” Bernanke replied, by which he explained “we’ve cut interest rates — the short term interest rates, the ones we control — all the way to zero.” Replies like this perhaps explain the current economic boom/bust cycle and the Fed’s increasing unpopularity.

Another reason for the Fed’s increasing unpopularity is arrogance and indifference to Congress. Ron Paul, a Texas Republican and former presidential candidate who is a philosophical libertarian, is not the only member of Congress who has had enough of the Fed. Democrat Alan Grayson of Florida, who also serves on the House Financial Services Committee, has had a number of sharp conversations with Fed leaders about the Fed’s extravagance in lending without accountability. Back in January, Grayson interviewed Fed Vice Chairman Donald Kohn, and had this exchange:

Grayson: If you put out $50 billion to Credit Suisse, the taxpayers need to know that.
Kohn: I’d be very concerned, congressman, that if we published the individual names of who was borrowing from us no one would borrow from us. The purpose of our borrowing is not to support individual institutions but to support the credit markets.
Grayson: Has that ever happened? Have people ever said “We will not take your hundred billion dollars because people might find out about it?”
Kohn: We have only said we will not publish the names of the borrowers, so we have no test of that.
Grayson: Well, what gave you the authority to say that? Isn’t that something we should be deciding, not you?
Kohn: I think you, uh, gave us the responsibility in the Federal Reserve Act to oversee the stability of the financial system through our lending facilities to be the lender of last resort and we are trying to execute that to the best of our abilities.
Grayson: And you are saying that entitles you to keep secret the expenditure of $1.2 trillion — $4,000 for every man, woman and child in this country?

More recently, Grayson asked Fed Chairman Bernanke which foreign central banks the Fed had lent $500 billion to, and it became an Internet sensation:

“The Fed needs independence in making monetary policy,” Bernanke explained as a reason to avoid the Ron Paul audit bill. “That keeps inflation low.” Of course, America hardly knew inflation before the Federal Reserve was created. The United States experienced mild deflation from the Founding era until the Fed was created in 1913. (Try it, using this internet inflation calculator) Ever since then, not a generation has passed without the dollar diminishing in purchasing power. Since 1913, the dollar has lost 95 percent of its purchasing power. A nickel bought more in 1913 than a dollar buys today.

Bernanke may be short on facts, but his recent “charm offensive,” as the Christian Science Monitor put it, is already paying off in the form of favorable editorial reviews from establishment newspapers such as the Washington Post, Boston Herald and Wall Street Journal. Bernanke has his big guns out pushing the public relations shtick, but it’s far from certain that any significant number of Americans will be swayed by an agency dedicated to keeping secret transactions of trillions of taxpayer dollars.

Photo: AP Images

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simon said:

	fed is dead Please America!!!! why do you allow such gross money misconduct by the fed...this is why your people suffer SO MUCH!!!!
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July 28, 2009
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Lee Gonzales said:

Save these quotes for your argument in favor of auditing the FED "The Federal Reserve Bank is in charge of setting interest rates, and its suppression of interest rates to historic lows beginning in early 2000 made it almost singlehandedly responsible for the housing bubble, and therefore its subsequent bust. The Fed has also doubled the supply of money in circulation over the past year and has lent out trillions of dollars to businesses and foreign central banks without any detailed disclosure to Congress or the public."===Tom Eddlem THE INFLATION CALCULATOR:http://www.westegg.com/inflation/ "The United States experienced mild deflation from the Founding era until the Fed was created in 1913. Ever since then, not a generation has passed without the dollar diminishing in purchasing power.... Since 1913, the dollar has lost 95 percent of its purchasing power. A nickel bought more in 1913 than a dollar buys today." ===Tom Eddlem

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July 28, 2009
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FreedomJoyAdventure said:

The Federal Reserve is not part of our government. They are licensed counterfeiters. The Federal Reserve is not part of our government. It is a private banking cartel that was illegally given exclusive license to counterfeit. They do not answer to our government, and thanks to them we are all basically debt slaves. The IRS is their collection agency. Check out the Grace Commission Report: http://famguardian.org/Subject...ports.pdf "With two-thirds of everyone's personal income taxes wasted or not collected, 100 percent of what is collected is absorbed solely by interest on the Federal debt and by Federal Government contributions to transfer payments. In other words, all individual income tax revenues are gone before one nickel is spent on the services which taxpayers expect from their Government." We need to rid ourselves of both the Federal Reserve and the IRS. They have been stealing from all of us for decades. "The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered." - Thomas Jefferson

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July 28, 2009 | url
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Charles said:

Charles Thank you, Mr. Eddlem, for a well-written and thought-provoking article. According to its own website (http://www.federalreserve.gov/...qfrs.htm#3), the Federal Reserve has four primary objectives: 1) "conducting the nation's monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices" 2) "supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers" 3) "maintaining the stability of the financial system and containing systemic risk that may arise in financial markets" 4) "providing certain financial services to the U.S. government, to the public, to financial institutions, and to foreign official institutions, including playing a major role in operating the nation's payments systems" In my estimation, the Federal Reserve has abjectly failed to achieve objectives one through four, and we are paying for its mistakes and failures. Yet the Central Bank is redistributing billions of our tax dollars and continuing an inflationary monetary policy which devalues the money we earn without any accountability whatsoever. The least we should accept is a proper level of transparency so that we will see where our money is going, and to whom. You may find and contact your Representatives and Senators in order to ask them to support the transparency bills being considered in Congress (H.R. 1207 and S. 604, respectively) by using the following two links: www.house.gov http://www.senate.gov/general/contact_information/senators_cfm.cfm Best regards, Charles

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July 28, 2009
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TOTOTO said:

	... BERNANKE NEEDS TO BE ARRESTED, THE FED NEEDS TO BE SHUT DOWN!
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July 28, 2009
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TOTOTO said:

	... INFOWARS.COM
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July 28, 2009
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Deuke said:

	American Institutions being systematically dismantled Wake up America, we're being robbed, pillaged and raped by an enemy that is accomplishing its goals, which were published in the Congressional Record, Jan. 10, 1963...look it up!
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August 20, 2009 | url
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