Terry Corbell, The Biz Coach
By Terry Corbell
Business Consultant

Why Is Transparency Crucial at the Federal Reserve?



Furtive actions by the Federal Reserve show the need for a change to transparency.

Then-Federal Reserve Chairman Ben Bernanke argued in 2012 that transparency would lead to a “nightmare scenario” in the Fed’s monetary policies.

But many others, including me, feel the Federal Reserve has overtly overstepped its monetary authority – by actually undermining the authority of Congress on fiscal policy issues. Not to mention the bogus printing of money that only benefits Wall Street insiders.

ID-100144214 Stuart MilesDespite opposition from the Federal Reserve, the U.S. House of Representatives is acting responsibly for the welfare of the nation.

By an overwhelming 327-98 margin, the House passed an audit bill, which sits in oblivion the U.S. Senate.

“I don’t know how anybody could be against transparency,” said bill sponsor Rep. Ron Paul (R-Texas).

He justifiably insisted American voters should be allowed to learn details about the Federal Reserve’s behavior – which includes massive bank-rescue deals and financial support of foreign central banks.

“They’re sick and tired of what happened in the bailout and where the wealthy got bailed out and the poor lost their jobs and they lost their homes,” said Rep. Paul.

You might recall the nonpartisan Government Accountability Office (GAO) audited the central bank in 2010 as required by an amendment introduced by Sen. Bernie Sanders (D-Vermont).

“As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world,” said Sen. Sanders.

The bill directs the GAO to fully audit the Federal Reserve. It would also eliminate the transparency exemptions that protect the Federal Reserve and the Federal Open Market Committee.

However, published reports indicate Democrats in the U.S. Senate will ignore the need for transparency. That’s despite the wisdom of Sen. Sanders.

Several Democrats in the House and Senate echo the propaganda of Mr. Bernanke – they feebly argue transparency would emasculate the Federal Reserve and would damage the central’s bank’s image.

“That will politicize the making of such policy, and I think it’s a bad way to go,” said the House Minority Whip, Rep. Steny Hoyer (D-Maryland).

Really?

It’s past time that he and Democrats in the Senate and members of the Federal Reserve stop acting like a ruling class. This is a democracy. Transparency is crucial.

From the Coach’s Corner, related articles on the Federal Reserve:

Why Federal Reserve’s QE3 Didn’t Help U.S. Economy — The Federal Reserve showed terrible judgment in printing billions of dollars for cheap money. Among 314 million+ Americans, just a relatively chosen few — big investors — benefited from the Fed’s third edition in quantitative easing (QE). The Fed is slowing its printing of money, but it’s too late.

Federal Reserve Typifies What’s Wrong with Economy — There’s still a troubling schism in U.S. politics, monetary policy and management of the economy. The Federal Reserve keeps printing money, which risks inflation and only encourages more bad monetary policy. For another example, consider Bloomberg ‘s shocking expose: “Wall Street Aristocracy Got $1.2 Trillion in Loans from Fed.” Yes, $1.2 trillion in secrecy.

Does the Federal Reserve Understand Small Business? — Small business is really the straw that stirs the drink in the nation’s ability to increase the number of jobs in this country. According to Small Business Administration (SBA) figures, small businesses make up more than 99 percent of all employers and employ more than half of all workers. Another SBA stat stands out: Small businesses have created 64 percent of all jobs in the last couple of decades. But small businesses have really suffered during and after the Great Recession.

“A politician is just like a pickpocket. It’s almost impossible to get one to reform.”

-Will Rogers

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Photo courtesy of Stuart Miles at www.freedigitalphotos.net

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Seattle business consultant Terry Corbell provides high-performance management services and strategies.