While filling in on The Neal Boortz Show on December 29th, Herman Cain launched into a rant defending Federal Reserve and downplaying efforts for an audit. His point was that the Federal Reserve wasn’t doing anything secret, to his knowledge, and that the movement for an audit amounted to nothing more than a lack of understanding as to how the nation’s central bank operates.
Here is a transcript of Cain’s remarks:
[T]he Federal Reserve already has so many audits, it’s ridiculous. I don’t know why people think we’re gonna learn this great amount of information by auditing the Federal Reserve. Now, I no longer serve on the board of the Federal Reserve. I’m not being defensive of the Federal Reserve; in fact, some of the policies and some of the actions of the Federal Reserve, I don’t agree with because the attitude and the non-politization in the 90’s when I served is totally different than what’s going on today. But that’s another matter.
But people who say, “we outta audit the Federal Reserve because we don’t know enough about it.” Well, here’s the advice I’ve given to people who ared worried about an audit of the Federal Reserve; call ‘em up, and ask ‘em if you can stop by and have one of their PR people or one of their Public Relations people explain to you how the Federal Reserve operates.
I think a lot people are calling for this audit fo the Federal Reserve because they don’t know enough about it. There’s no secrets going on in the Federal Reserve, to my knowledge. And I tell people, we’ve got 12 Federal Reserve banks, find out which district you’re in, call ‘em up and go from there.
We don’t need to waste money with another commission, or an audit that’s not necessary, because, folks, we’ve gotta lot of other problems we need to worry about.
If the Fed wasn’t trying to hide anything, why did they want until legislation was passed with a statutory requirement forcing to release the names of foreign banks they loaned money to? Lawsuits had been previously filed to obtain that information, and the Fed wouldn’t budge…but, according to Cain, they had nothing to hide.
As I’ve noted before, Cain endorsed the TARP bailout, or the “recovery plan,” as he called it on his radio show. In the articles - you can read them here and here - Cain wrote that nationalizing banks “is not a bad thing.” He even went as far as criticizing opponents of the bailout, calling us “free market purists” and absurdly claiming that no valid criticism had been brought forward of the extraordinary intervention in the economy.
Cain need look no further than the measures taken during the Great Depression to understand how economic intervention can slow down and worsen an economic depression.
But here we are just four weeks and a presidential campaign announcement later, and Cain has done a turnabout, posting the video below on his YouTube account yesterday:
Before Cain said anything about the Federal Reserve, I noted that while he is an incredibly nice and approachable guy, Cain is inconsistent and somewhat of an opportunist. My friends, what I’ve posted above is “Exhibit A.”
By the way, both Sen. Rand Paul (R-KY) and Rep. Ron Paul (R-TX) have filed legislation that would require the Government Accountability Office to audit the Federal Reserve.
While opponents of the legislation claim that it would allow Congress to involve itself in monetary policy (it wouldn’t), the bill would open up certain information to the GAO currently excluded from audits in subsection (b) of 31 USC 714 (including transactions with foreign central banks, decisions on monetary policy, transactions made via the Federal Open Market Committee and communications by members of the Fed’s Board of Governors).
The legislation allows Congress, through the GAO, to see the thought process behind certain decisions and loans. Considering the amount of power the Fed holds over the economy, a bit of transparency doesn’t seem too much to ask.