Volcker Opposed to Ron Paul's "Audit the Fed" Measure
Ron Paul does a lot of good stuff in Congress and I admit that I like him because he's one of the few people who seems to work "outside the system", or that is, does not seem to be controlled by his lobbyists. I think any independent voice adds a lot to our political system and the sad truth is that we have very few left these days.
That said, the "Audit the Fed" proposal has always struck me as bogus and a tad silly. In reality, all it would do is further politicize the process which would make things even worse. My view is reinforced today by the fact that former Fed Chair Paul Volcker has now gone on record as being very opposed to this:
Volcker and Greenspan Letter
Do you really want the nation's macroeconomic policies being determined by the wingnuts and idiot pundits that regularly dominate the airwaves? Do you really want Fed rates to become highly politicized? The people asking for this are setting themselves up for disaster.
Volcker and Greenspan suggest that Congress consider alternatives that would allow oversight of the Fed, while not undermining its autonomy. The "Audit the Fed" proposal really does not achieve this. It needs to be re-worked.
For that matter, if you ask me who do I trust more --- Congress or the Fed --- I say the Fed in a heartbeat. It's not that I believe the Fed is beyond reproach. It's that I have absolutely ZERO faith in Congress's ability to assess the merits of its actions. Flawed as it may be, we're better having an appointed, but autonomous Fed, rather than a politicized one that makes policies based on the whims of public polling at any given moment.
I also think that by "auditing the Fed", we actually might be setting it up to be *more influenced* by outside lobbying. Our Congress is bought and sold by special interests and they represent those interests (who pay their campaign bills) more than they do "the people" at this stage of American history. It's a sad reality and I'd like to see us take steps to reform the process so it works better (a good start would be to break the two-party monopoly which makes it particularly easy for special interests to dominate), but in the meantime, we're stuck with a Congress that is mostly influenced by three factors:
(1) Public polling
(2) Special interests
(3) The media
I can gripe about the Fed's actions occasionally, but I'll take it over the three things listed above without a second thought.