My friend Jason Pye has video of Ben Bernanke up explaining why the Federal Reserve should not be audited.
Bernanke’s comments are filled with red herrings. The legislation would not, despite his claims, allow Congress to take over the Fed or cause it to lose independence.
I was not sure I supported the legislation until I heard Bernanke and others say they should not be audited. It always makes me suspicious when bureaucrats think they are above oversight.
To be sure, there are risks along the way. I suspect we will all be troubled by the findings of a Fed audit. Some members of Congress will want to take over the Fed. It’d be disastrous for Congress to start setting interest rates, etc.
But that does not mean the Fed is beyond scrutiny. Congress should find an outside, competent auditor who can do the job.
Lastly, how dare the Fed suggest this legislation would mean it is surrendering its independence. We know from the bailouts that the Fed has served as an extension of the Treasury Department since mid-2008 and remains a useful pawn of the Treasury Department.
The Federal Reserve itself gave up its own independence and we should not make sure it is not surrendering the nation’s through fiscal recklessness.