sounds reasonable

[shawnsegler]

http://www.govtrack.us/congress/bill.xpd?bill=h111-1207

[Dmitri]

It is.

I hope it gets through...

Perhaps the following might be of relevance here:

Dear Friends,

As we reflect on President Obama's first 100 days in office, the hundreds of billions of dollars in taxpayer bailouts of Wall Street and the just passed budget, a staggering $3.4 trillion boondoggle, I wanted to share some good news with you.

As I write, H.R. 1207, my bill to audit the Federal Reserve, currently has 110 cosponsors in the House of Representatives. This piece of legislation is perhaps the most important of my career, and I thank you for your continued support in sending me back to Congress to fight for it.

A broad coalition of Representatives has joined with me in supporting your right to transparency at the Fed. For example, Rep. Tom Price (GA), head of the conservative Republican Study Committee, and Rep. Lynn Woolsey (CA), former head of the liberal Progressive Caucus, have both cosponsored the bill. Americans from all over the political spectrum are demanding an audit of the Federal Reserve. And with good reason!

Since its inception, the Federal Reserve has operated without sufficient transparency or accountability to the American people. In fact, current law specifically excludes the Fed from audit or real congressional oversight. No government agency has such an utter lack of sunshine.

The Federal Reserve has created and dispersed trillions of dollars in response to our current financial crisis. Of course, I am among the most outspoken critics of the bailouts, but Americans across the nation, regardless of their opinion of the TARP program, want to know where that money has gone and exactly how much has been spent.

H.R. 1207 will open up the Fed's funding facilities, such as the Primary Dealer Credit Facility, Term Securities Lending Facility, and Term Asset-Backed Securities Lending Facility to Congressional oversight.

Additionally, audits could include discount window operations, open market operations, and agreements with foreign central banks, such as the ongoing dollar swap operations with European central banks.

By opening all Fed operations to a GAO audit and calling for such an audit to be completed by the end of 2010, the H.R. 1207 would achieve much-needed transparency of the Federal Reserve.

Times are tough, and we continue to hear a stream of bad news. But I will continue to stand up for you in Congress and fight for our American traditions, to protect our Liberty and for an Audit of the Federal Reserve.

Thank you again for your support. I could not continue my fight without you.

In Liberty,


Ron Paul

[Teazer]

Odd that he says "current law specifically excludes the Fed from audit", since the GAO + external auditors do audit the Fed system annually. What he specifically wants is to broaden the audits to include monetary policy decisions which were specifically excluded by Congress when drawing up the Fed charter, and in all revisions since then due to conflicts of interest. I'm all for transparency though.

http://www.newyorkfed.org/aboutthefed/fedpoint/fed35.html
http://www.publiceye.org/conspire/flaherty/flaherty6.html
"Since its inception in 1913 the Federal Reserve System has been subjected to a variety of financial and performance audits by Congress, the executive branch, and private accounting firms, although responsibility for this task has shifted from time to time. From 1913 to 1921 the Board of Governors, then known as the Federal Reserve Board which sets monetary policy and regulates the activities of the Federal Reserve Banks, was audited annually by the U.S. Treasury Department. In 1921 Congress created the Government Accounting Office (GAO) and assigned it to audit the Board until 1933. In the Banking Act of 1933, Congress voted specifically to remove the Board from the GAO's jurisdiction. From 1933 to 1952 audit teams from the twelve Federal Reserve Banks performed the annual examination of the BOG's books. From 1952 to 1978, the Board, under authorization from Congress, decided to employ nationally recognize accounting firms to conduct the audits of itself to insure independent oversight. This provided an external evaluation of the adequacy and effectiveness of the examination procedures.1

In 1978 Congress passed the Federal Banking Agency Audit Act (31 USCA §714). It placed the Federal Reserve System back under the auditing authority of the GAO. The Act significantly increased the access of the GAO to the Federal Reserve Banks, the Board, and the Federal Open Market Committee (the FOMC). Since then, the GAO has conducted over 100 financial audits and performance audits of the three Federal Reserve bodies. "

[Michael]

There has never been a meaningful audit of the money in the Federal Reserve, but occasionally they do allow people to count how many pencil sharpeners and Lear jets they have. If you are for transparency, you will not play semantics games about a financial audit of the institution that has the greatest influence over the economy of the US, and by extension, a significant influence over the economy of the entire world.

Statements such as the links Teazer provided are so laughable that when former NY Fed President, Timothy Geitner, now Sec. of Treasury (whose father hired Obama's mother, small world, heh-heh) recently told an audience at Beijing University that their US Treasury Bonds were a sound investment, he was literally laughed out of the room.

The Fed has never been audited, which is why Rep. Ron Paul's bill has now over 190 cosponors and the Fed has hired a big time lobbyist to try and defeat it. Once the Fed us audited and it is revealed what they're really doing after almost 100 years of total secrecy, people can make an informed choice about monetary policy.

[Teazer]

the Paul bill:
http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.1207:
the code it's meant to be changing:
http://www4.law.cornell.edu/uscode/html/uscode31/usc_sec_31_00000714----000-.html

Edit: doh! I see what he's doing. Fair enough. We'll see how far it gets. It also states the fed gets audited. Just not how you would like. The bill still wouldn't give congress any authority over the fed. Hopefully it won't be the camel's nose in the tent though. But I'll do fine out of it - more information for the finance mill. & if I've got to throw in dummy variables for the financial crisis anyway....

In the meantime, could you provide source references for
1.Timothy Geitner, now Sec. of Treasury (whose father hired Obama's mother, small world, heh-heh)
2. how many...Lear jets they have
and no, tin foil hat sites don't count, which is all I could find. Where/who did they all get those snippets from?

[Michael]

Honestly, I'm behind on checking out your threads, which is not fair since you have checked out a lot of what I've posted. But even still, you can't do prior restraint on my sources. You can be a snob about everyone's credentials all you like (no offense intended), but as the economy spirals down the drain your comments about tinfoil sites are even more ridiculous now than before since what you have called "tinfoil" and "unqualified" predicted years in advance what is happening now, all while Helicopter Ben was making things worse.

I actually posted the lear jet info. maybe a year ago, last August or September I think. Should be able to find it again after I get back from class.

[Teazer]

Link as you will!
It's certainly been an eventful year.

[Michael]

My previous post on the Fed's lear jets and art collection from last October.

NY Times reports

What neither man knew at the time, but the foundation has confirmed, is that Mr. Geithner’s father, Peter F. Geithner, oversaw a program that Mr. Obama’s mother, Stanley Ann Dunham Soetoro, had worked on. The two may even have met in Jakarta.

It's in the middle of an article about when Geitner was Pres. of the NY Fed and didn't pay $48,000 in taxes, which makes total sense to me. It would be like Don Vito Corleone paying himself for protection.

[Teazer]

My previous post on the Fed's lear jets and art collection from last October.
<<A very interesting interview for sure, especially when Gause mentioned the NY Fed's 47 Lear jets and $300 million art collection.>>

Oh yeah, that guy. Well Bernanke generally rides commercial airlines (first class admittedly), so do you have any thoughts what such jets would be for? Let's just leave that as 'unfounded speculation' unless you can come up with a better source.

As for the art collection...It's obviously a sign they are truly the minions of a giant conspiracy!
http://www.federalreserve.gov/generalinfo/virtualtour/virtual.cfm?WhichSlide=2
<<all federal agencies can receive gifts of artwork on behalf of the American people...
The Fine Arts Program at the Federal Reserve Board was established in 1975 by former Chairman Arthur F. Burns in response to a White House directive encouraging federal partnership with the arts...
Today, the Federal Reserve Board holds in public trust over 400 works of art donated by citizens and foundations.>>
Everything Andy Gause says seems to involve taking a couple of facts, adding some nods, winks and exaggeration and then pulling some wild conclusion out his ass.

What neither man knew at the time, but the foundation has confirmed, is that Mr. Geithner’s father, Peter F. Geithner, oversaw a program that Mr. Obama’s mother, Stanley Ann Dunham Soetoro, had worked on. The two may even have met in Jakarta.

It's in the middle of an article about when Geitner was Pres. of the NY Fed and didn't pay $48,000 in taxes, which makes total sense to me. It would be like Don Vito Corleone paying himself for protection.

A politician not paying all their taxes. Now there's a novelty. Is it relevant? and the Obama/Geithner's father link - a bit of a stretch too. 'They may have met' ? 'Oversaw a program' does not mean 'hired'.
<<WASHINGTON -- Timothy Geithner didn't pay Social Security and Medicare taxes for several years while he worked for the International Monetary Fund, and he employed an immigrant housekeeper who briefly lacked proper work papers.....As an American citizen working for the IMF, Mr. Geithner was technically considered self-employed and was required to pay Social Security and Medicare taxes for himself as both an employer and an employee. The IMF and World Bank reimburse employees, including U.S. citizens, for their U.S. income taxes. They don't, however, make contributions toward Social Security and Medicare taxes, which individuals are expected to pay on their own......As to why Mr. Geithner didn't pay all his back taxes after the 2006 audit, an Obama aide said the nominee was advised by his accountant he had no further liability.>>
http://online.wsj.com/article/SB123187503629378119.html

On a less speculative note, in some ways it's nice to see the recent upturn in long term interest rates in response to all the government spending and consequent inflation worries. The true test of Bernanke's policies will be whether he can keep the lid on inflation, which will require both more conservative monetary and fiscal policies since the credit markets are at least functional now, if still fragile. (and by 'keep the lid on, I mean a more reasonable positive but less than 5%, rather than averaging zero but fluctuating mostly between periods of deflation and inflation which I know you'd prefer.)

It will be interesting to see if Ron Paul manages to get the transparency bill voted on. While it's easy and popular to express some support, those representatives may be a bit less committed to signing on to deal with the Fed's laundry when it actually counts. Also considering the large differences between the House and Senate bills, it'll be fascinating what kind of sausage comes out the end.

[Michael]

Referring to Gause, which conclusions is he pulling out of his ass? I recall him just listing certain facts. So having 47 Lear Jets doesn't set off sirens for an organization that on paper claims it's non-profit and returns all the interest back to the US Gubmint? Maybe they were donated to the American people and are being held by the NY Fed for a future aeronautics museum. Yeah, I bet that's it. Wait, what's that sound? Oh yeah, my brain falling out of my ear.

Teazer, on a funny note, although it may be hopeless if you don't see the humor of the NY Fed Pres. saying his Turbo Tax was the reason he didn't pay his taxes, if I'm ever found holding a bloody knife next to the fictional Emmanuelle Goldman and Ben Simpson, wearing gloves covered in their blood, I just really hope you're the jury foreman and at that point in time I am working for the private Federal Reserve Bank. I'm pretty certain under those circumstances, I'll be acquitted.

[Teazer]

Referring to Gause, which conclusions is he pulling out of his ass?

Notice if you will a simple example: you say that Gause takes the fact that the Fed has a giant art collection. His conclusion: this supports that the fed's actions are self serving and it's some kind of blight on the financial system.
Did he mention: sure but they were donations and are held by the Fed in the public trust? Nope, he kinda skipped over that bit. How convenient in the pursuit of his agenda.

I recall him just listing certain facts. So having 47 Lear Jets doesn't set off sirens for an organization that on paper claims it's non-profit and returns all the interest back to the US Gubmint? Maybe they were donated to the American people and are being held by the NY Fed for a future aeronautics museum. Yeah, I bet that's it. Wait, what's that sound? Oh yeah, my brain falling out of my ear.

1. other than Gause's somewhat less than reliable word for it, we haven't seen any evidence these jets exist and are owned by the Fed.
2. This would be the part of what the Fed does that is actually audited & reported to the GAO as well as to Congress, so you'd think there'd be something he could point to.

My guess is that factoid comes unchecked from the Von Mise institute piece (who have their own axe to grind on this issue)
http://mises.org/freemarket_detail.aspx?control=302
<<A 1996 General Accounting Office audit revealed that the Fed's $2 billion annual budget was used to employ 25,000 well-paid employees, to operate its own air force of 47 Lear jets and small cargo planes, and to maintain a large fleet of automobiles (including personal cars for 59 Fed bank managers). A full-time curator oversees the Fed's collection of expensive paintings and sculptures. >>

As far as I can find, this is the 1996 audit report, and I can't find anything in it about Lear jets. But hopefully you can point to an alternate document if this isn't the one they refer to.
http://www.gao.gov/archive/1996/ai96005.pdf

Teazer, on a funny note, although it may be hopeless if you don't see the humor of the NY Fed Pres. saying his Turbo Tax was the reason he didn't pay his taxes,

I found that funny. I also found the Chinese students' response funny. I just don't think they're relevant.

[qiphlow]

The IMF and World Bank reimburse employees, including U.S. citizens, for their U.S. income taxes.

WHAT? WHY?

[Teazer]

They probably think that pay equality between their employees is a good thing. The US tends to still tax its citizens for income earned outside the US even if it was already taxed over there already. Other countries may have different policies. In order to offset that, the WB chips in for the difference.

[Michael]

Teazer, you blew up my comments, creating strawmen along the way, then dismissed anything supporting them. Your grammar even got sloppy, tisk, tisk.

How's the economy doing? How is the Fed doing in it's number one stated goal of maintaining financial stability? How have they done at preventing financial crises since their inception almost 100 years ago? Would you say Chrysler and GM going bankrupt is relevant to a discussion about the Fed?

[Michael]

The IMF and World Bank reimburse employees, including U.S. citizens, for their U.S. income taxes.

WHAT? WHY?

Last time I checked, US citizens have to pay taxes when living abroad if their income is greater than $72K/year. Most other countries don't have such a requirement.