It could be a good idea if done for the right reason. But of course, nothing in Washington D.C. has been done for the right reason lately. Bloomberg.com reported today that the Senator from Kentucky, Rand Paul, will put a hold on Yellen’s nomination for the post of Federal Reserve Chairperson in order to push through his father’s, Ron Paul, bill to subject the Fed to extensive auditing.
I’m all for transparency. But this push to audit the Fed seems a bit misplaced considering that there are millions of people suffering from the effects of monetary deflation and bad bankruptcy laws that require fees that run into the thousands of dollars to simply start a case. It seems even more problematic when there has been complaint after complaint from the right side of the aisle regarding the explosion in social spending making near slaves out of people. The choices are not particularly good for those who can’t afford to start a bankruptcy case as they face lawsuit after lawsuit and the consequences that go with them. Would they prefer to be a government slave to public assistance or to creditors who garnish their wages until their debts are settled? If I had a guess, it’s likely the former. Something is impacting the labor force participation rate in a negative way and I wouldn’t doubt that bad bankruptcy laws have something to do with it.
So with all of these major problems wreaking havoc on the personal finances of the public, Mr. Paul wants to see what the Fed has been up to besides things we already know about. I am certainly skeptical that it has anything to do with public wellbeing. Maybe just a little show for those he hopes will vote for him in the primaries for the 2016 Presidential race? If that does have anything to do with his plans to block the Yellen nomination, it’s pretty despicable; and he’s wasting a golden opportunity to do something that would actually help average people.
I certainly see nothing wrong with holding up the nomination to seek accountability for Fed officials, or changing the duration of their terms, or reforming the structure of the Federal Reserve System so that it is no longer a blast from the past. I would certainly cheer for Mr. Paul if he chose to seek a nominal stability, monetary constitution that required transparency. And, by the way, there can be no better transparency in monetary policymaking than to impose NGDP level targeting along with accountability. He could kill several problems with one stone…
… But we just gotta have the audit. How narrow-minded and lame.