In a Bloomberg article from February 12, Senator Rand Paul discussed his views on Bitcoin and other alternative currencies. He stated that his concern with Bitcoin “was whether or not something has real value. I could imagine a kind of coin that was exchangeable.” He felt that if Bitcoin, “Wal-coin,” or a similar company currency was exchangeable for stock in that company, it would give real value to the currency. That currency would, in Sen. Paul’s opinion, raise profit margins for those companies, which he believes would be an interesting prospect.
On February 5, The Hill reported on criticism of Senator Rand Paul’s Audit the Fed bill. In response, Sen. Paul was quoted as saying, “Citizens have the right to know why the Fed’s policies have resulted in a stagnant economy and record numbers of people dropping out of the workforce.”
In an orchestrated orgy of protests, Fed governors and regional bank presidents have roasted Sen. Rand Paul and his co-sponsors for reintroducing a bill mandating an audit of the Fed. Loretta Mester, president of the Cleveland Fed, wants us to know that such a thought is “misguided.” Why? “They really are about allowing political considerations to influence monetary policy decisions,” she said in a speech in Columbus. “This would be a tremendous mistake, because it would ultimately lead to poorer economic performance.”
What performance? Presumably the Fed wants a pat on the back for the zero-interest-rate policy of the last six-plus years, which has all but abolished bank savings accounts and made it harder for small businesses to access the lines of credit they need to expand—and create new jobs. Or is Ms. Mester talking about the recovery that began in 2009, which is the weakest since the statistics that measure such things began to be kept?
Of course this is about much more than a congressional audit. It is at root the Fed’s desire for zero review and zero debate of a monetary policy that has virtually nationalized lending and seems capable of making stagnation a permanent feature of an economy that not long ago was the most dynamic in the world. God forbid that there should be a political debate about a Fed whose last two chairs are among the most political ever to serve.
And God forbid that Congress should take seriously Article I, Section 8 of the U. Continue Reading