Fed Up! Hillary Clinton in Cahoots with Attempted “Hostile Takeover” of the Fed

Fed Up activists assemble outside a Congressional hearing (photo credit: Ralph Benko)

I’m fed up with the Fed too, with its chronic policy failures. A lot of evidence shows the Federal Reserve to be a prime cause of lackluster job growth and sluggishness in wage increases.

That said, sometimes a cure is worse than the disease. Now the left, with the support of Hillary Clinton, is threatening to take us, to mix the metaphor, out of the frying pan and into the fire.

Last week, about a dozen arch-progressives from “Fed Up” attended a hearing of a subcommittee of the House Financial Services Committee, “Federal Reserve Districts: Governance, Monetary Policy, and Economic Performance” in Rayburn House Office Building. I also attended.

The title of the hearing sounds boring. What was really going on was anything but boring.

I wrote about this hearing at length in my most recent column at Forbes.com, “The Left’s Fed Up Makes A Naked Power Grab For Control Of The Fed“:

In scope, the left’s plan makes trivial by comparison Auric Goldfinger’s “Operation Grand Slam” to contaminate America’s gold holdings at the US Treasury Depository at Fort Knox. Goldfinger planned to turn them radioactive. Those holdings amounted, in 1964, to about $14 billion. They are now valued at close to $200 billion.

Either way, a tidy sum. Yet it’s just a nickel compared to the Fed’s more than $4 trillion holdings.

Most impressive. The left is undertaking its own Operation Super Grand Slam.

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The Free Lunch That Never Was

Photo credit: blogdnd via Flickr (CC BY 2.0)

Yesterday, the Federal Open Market Committee once again confirmed that they are unable to normalize the federal funds rate. The Fed promised they could save us in 2008 and then reverse policy later. Seven years after the fact, that’s still not the case. This is a clear sign that something is seriously wrong.

So what are the implications of this? A generation of savers loses. Private and government debt continues to accumulate. Bubbles and market distortions continue to grow.

The Fed and the elite promised that this would be a free lunch, but clearly this is not the case.

The Fed owns the current economic pain of the middle class, and it’s clear that they will own the next crisis.

Senator Rand Paul gets it. Do any of the other 2016ers?

Terry Schilling is the executive director of American Principles in Action. Continue Reading

Latest Twist in Audit the Fed Debate

The Marriner S. Eccles Federal Reserve Board Building – Washington, DC

The political firepower generated by Sen. Rand Paul’s Audit the Fed bill is now giving new attention to an alternative or potentially complimentary political response: to shift power from the New York Federal Reserve Bank to other regional Federal Reserve Banks.

The Federal Reserve System’s most crucial policy body is the Federal Open Market Committee, made up of members of the Board of Governors and of district Federal Reserve Bank presidents.  The FOMC is the body that decides whether to raise, lower, or hold steady the discount rate, widely considered the bellwether for establishing the other interest rates.

Does the current composition of the FOMC give too much power to Washington and Wall Street?

The Wall Street Journal’s Real Time Economics blog notes that a powerful political force—community banks—appears to be getting behind the proposal first championed by Dallas Federal Reserve Banks President Richard Fisher:

The Independent Community Bankers of America is calling on Congress to pass legislation that would implement several changes Mr. Fisher proposed earlier this month. The letter was first reported by Bloomberg News.

No lawmaker has introduced legislation to implement Mr. Fisher’s proposal, but a spokesman for Rep. Mac Thornberry (R., Texas) said the congressman is considering offering such a bill.

Mr. Fisher favors, among other things, ending the New York Fed president’s permanent role as vice chairman of the central bank’s policy-setting Federal Open Market Committee, and instead rotating the position among the 12 regional bank heads.

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