How can you be so sure of that? Maybe severe monetary reform ultimately creates a larger middle class and wipes out a lot of the leaches in the top 1%? Doesn't the top 1% own about half the non home wealth in the country? What if by destroying extreme leverage created through the Federal Reserve System, more people in the middle class become business owners? Who did the bailouts really help more - the Walton family/Walmart or the independent shopkeeper on Main Street? Did the bailouts help Pep Boys or the independent owner operator mechanic? Do the bailouts and the current Federal Reserve system help McDonalds, or the independently operated restuarant? I could go on and on... you get the point...
Disown and throw all those Wall St. billionaires in jail and you have a happier nation? More equality = more happiness
I think the Audit is nothing more than a "I don't trust you, please show me your books" statement. I don't think it's political at all. The American people want to know where all our money went.
+1 And not only that, but the current audit the fed movement will impact the Fed's behavior in the future. As the saying goes, "don't do anything you wouldn't be caught dead doing." Now the fed will think twice about it's "covert" actions fearing that one day, they may come to light.
Ivan and Misthos, IMHO and with all due respect, you're being woefully naive here (or I am being excessively cynical)... I just don't believe that any action by any politician has anything to do with the true wishes of the American people (assuming they could be formulated, that is). My view is that it's yet another political turf war that will determine who pulls which important strings going forward. Furthermore, I believe the eventual outcome might be that the Fed, which, for all its purported faults, is largely an organization of technocrats, gets supplanted by some sort of a politically motivated congressional committee. Now that, in my view, would pose a much greater long-term threat to the economy than the Fed could, in your wildest scenario. Are you happy to take this risk? I am sure I'll get a lot of flack for this, but I know that I would go with Bernanke over Dodd/Frank/Pelosi/Grayson/Paul/Brady/Waters/"insert-politican-name-here" any day. Looks like Volcker agrees with me...
Regardless of the political motivation of the bill, transparency is needed. If what comes out of this is the Fed having to show what it's doing with it's balance sheet, how much money it's sending in foreign currency swaps and to whom, etc., what banks are being paid to stay afloat, etc., then I'm for it. I cannot imagine that greater transparency is a bad thing. However the opposite? That surely leads to a bad thing.
You bring up valid points about the dangers of the politicization of a monetary system. Nonetheless, isn't it also naive to think that such a large and powerful institution has not been captured by other interests already? When I see a cloak of secrecy surrounding a financial institution, I can only assume the worst. Especially if I view it's recent history in creating the current mess it did not see coming. There are no easy answers, and all options involve painful results.
Almost everyone commits fraud or steals money to some degree. Ever break the speed limit? Ever help yourself to another soda out of the McDonald's fountain? ever stretch the truth even a little on your taxes? Ever steal anything when you were 3 years old, like a cookie from mom's kitchen? What is the degree where we ignore an infraction vs. slaughtering people? If not, how about your close friends or relatives? Why not move to the Middle East, where women are stoned even if being SUSPECTED of inappropriate sexual behavior? One person's simple is another person's ridiculous.
Whatever happened to "Trust - but verify"? Misthos is correct - to say that the Fed might be captured by a political faction is to start with a conclusion - that it is not now, nor has ever been captured by some special interest of some sort. To advocate opacity is to assume this is not, nor has ever been the case, based on...nothing. Further, that they are "technocrats" is not a given, as the demagogue Greenspan proved with his blind devotion to Ayn Rand philosophy. That one man's dogma can direct the entire country's financial policy, regardless of "governors" who openly disagreed with him, is monarchy. And the Fed's "independence" has done nothing to help the gov't overspending and creation of enormous debt. How has it's opaqueness helped at all? If it hasn't, then why is it a sacred cow?