The most powerful testimony at last week’s anti-Fed hearings in Congress came from economic historian Tom Woods. The author of Meltdown, which we excerpted way back in March, explained that most reasons given for keeping the Fed’s books secret are hogwash.
The argument that greater transparency will somehow give Congress authority over setting interest rates seems far fetched, Woods explains. Nothing in the bill seems likely to lead to that consequence. What’s more, arguments that the bill could compromise the Fed’s independence frequently overstate the existence of that independence.
“We should investigate that issue,” Woods says. “How independent is the Fed? How independent could it be? The Fed chairman is occasionally up for reappointment. The chairman typically wants to ingratiate himself with the President, and often will accommodate him with loose monetary policy.”
Someone has helpfully put up the best of Woods testimony on YoutTube. We decided to collect them for you all on one slide show. If you want to read Woods’s own take on how he did during his testimony, click here.
'Taxpayers, involuntary investors in this case, have a right to know who received loans, in what amount, for which collateral, and why these specific loans are made....There's no good reason for Americans not to know the terms and recepients of these loans. There's likewise no good reason for them to be kept in the dark about the Fed's arrangement with foreign governments and foreign central banks. These things effect that quality of the money.'
'We just had the biggest asset bubble in the history of the world thanks to the Fed. But if they lose their independence they won't be able to do as good a job as they've been doing. This is really shocking that we have professional economists who take that position.'
'If the balance sheet is overloaded with qualitatively degraded assets, how are they going to sell them? How can they pull all that money back in? We will all suffer from an inflation tax.'