In a March 10th speech on the House floor, Ron Paul said, “I have introduced a bill, it’s called H.R. 1207, and this would remove the restriction on us to find out what the Federal Reserve is doing. Today, the Federal Reserve under the law is not required to tell us anything.”
Earlier today, Paul’s Federal Reserve Transparency Act of 2009 (H.R. 1207) received its 218 cosponsors in the House of Representatives. The significance of this number is that it represents a majority of House representatives. The 218th co-sponsor, according to a press release released today by Dr. Paul’s congressional office says that the 218th co-sponsor was none other than Paul’s friend Dennis Kuchinich.
“The tremendous grass-roots and bipartisan support in Congress for H.R. 1207 is an indicator of how mainstream America is fed up with Fed secrecy,” said Congressman Paul. “I look forward to this issue receiving greater public exposure.”
As do we all. The Federal Reserve board was created in 1913 by an act of Congress to help big bankers do what they could not do on a free market: cartelise the banking industry. The Fed today sets the interest rates instead of allowing the market to set the interest rates. It also lowers the reserve ratio required for banks to 10%. This means that banks are given the statist luxury of lending out up to 90% of the money you put into it. The Fed uses these controls to encourage or discourage lending at its own discretion—a discretion that is always inevitably tainted by politics. The Austrian school of economics holds that this manipulation of the money supply is the prime, if not the sole, cause of the business cycle.
Anti-Fed sentiments have been on the rise ever since the Fed-created housing bubble burst in 2008. For more on this, see Dr. Thomas E. Woods’s excellent book Meltdown. For a basic overview of the Fed itself, see the Ludwig von Mises Institute’s fantastic documentary 42-minute Money, Banking, and the Federal Reserve. (Don’t be scared by the title, the documentary really is fascinating!)
Right now, the number of co-sponsors on Paul’s bill is up to 222. Hearings on Federal Reserve transparency are expected within the next month, “as part of the Financial Services Committee’s series of hearings on regulatory reform.” This is the same committee chaired by the notorious Barney Frank. Despite some clear flaws on his part regarding Fanny and Freddie, he has been a critic of the Federal Reserve system.
An identical bill, titled the Federal Reserve Sunshine Act of 2009 (S. 604), was introduced on March 16th in the Senate by the independent from Vermont, Bernard Sanders. Thus far, the Senate version has no co-sponsors.
—Alexander S. Peak