Fed Governor Jerome Powell: “Jarring!”

February 22, 2015 in News by Slad

Source: John’s E-Mail

Campaign for Liberty

Dear John,I want to tell you a little bit about an event Campaign for Liberty staff attended last week.

In a last minute change from a scheduled generic speech on “Income Inequality,” Fed Governor Jerome Powell spoke on “Audit the Fed & Other Proposals,” though it was clear his real target was bashing Audit the Fed.

The moment we saw the announcement of this speech hit the press the Friday before, I knew our staff had to go see this firsthand.

While it’s not uncommon for Fed Governors and officials to give speeches at universities on various economic topics, it is highly unusual for a speech to be focused solely on a legislative proposal.

I immediately called the university to find out if it was open to the public – I wasn’t going to crash a private affair.

After being told that it was open to the public and asked to RSVP to a generic email address, I RSVP’d for myself and six other members of C4L’s national staff.

That Sunday morning, I received an email from the Director of Public Affairs at Catholic University of America.

The email began by describing the audience as primarily students, faculty, and invited press, before inquiring why Campaign for Liberty was interested in the event.

Ok, I thought. Not unusual for a school to do a little research into a large RSVP for an event they expected to be sparsely attended.

So I explained who we are, what we do, how Audit the Fed is our top legislative priority, and that if the Fed is going to talk about it in public, in DC, we want to be there.

I finished by telling him I had a policy brief on Audit the Fed I intended to hand out to the press before or after the event.

I never heard back.

Well, Monday morning, I just presumed that silence implied consent and figured we’d just show up to the event and see what happened.

The old saying “Better to ask forgiveness than permission” came to mind, as well.

I think deep down, part of me was hoping the school would come up with some reason for not letting us in … the copy would have been so much more exciting to write!

Lo and behold, we waltzed right in, and there was a row of “Reserved” signs, right up front in the audience, just for us.

Well, that was nice of them…

Then, just before the event started, while I was talking with and seated next to our Vice President of Policy, Norm Singleton, Fed Governor Jerome Powell made his way over and said, “So, you must be Tim,” extending his hand for a greeting.

It was beginning to get clearer why we had a reserved section.

But still, it took me aback for a minute, as even though I knew who Jerome Powell was from watching his confirmation hearings in the Senate in 2014 and his involvement with the Fed since 2012, I didn’t expect him to know me from Adam.

And then, a little part of me got really excited.

While I fully expected the university to inform Mr. Powell that C4L staff was in the audience, I hadn’t exactly expected them to point me out!

Talk about weird.

All because I RSVP’d. (Next time, I’m putting that one on the intern – sorry, Zac!)

Now, I didn’t tell you this story to go into some wild theory about the Fed targeting me for intimidation or harassment (although that would make some great thriller fiction copy someday).

No, I mentioned this anecdote because to me, it’s just another sign that we’re winning this fight.

The Fed is concerned enough about Audit the Fed, our efforts to pass it this Congress, and the growing momentum behind it that a Fed Governor, currently one of only five, took time out of his day to learn about me – because of YOU!

I’ll let that sink in for a moment.

By myself, I’m a nobody.

I came to this town as an intern with Campaign for Liberty six years ago, yearning to make a difference, believing wholeheartedly in the mission of Campaign for Liberty, and strongly advocating for Ron Paul’s Audit the Fed bill.

But I’m not by myself.

Today, I, because of all of you supporting Campaign for Liberty – either financially, through activism, or both – am known by an official at one of the most powerful and secretive institutions in Washington, D.C.

You and I have them scared.

And it’s showing.

In February 2011, talking about our successes on Audit the Fed up to that time, Vice President of Programs Matt Hawes told an audience at CPAC, “We looked the most powerful institution in the world in the eye and made it blink!”

While I always thought that statement perfectly captured what we had done at that time, I think these days it needs revising to bring it up to the times.

Ladies and Gentleman, we’ve looked the most powerful institution in the world in the eye, and we’re making them quiver down to their boots!

Powell’s speech itself was nothing extraordinary.

It actually was full of contradictions that seemed to go unnoticed or unquestioned by the press in attendance.

For instance, Powell claimed “very little would be revealed by GAO policy audits” that isn’t already publicly available, but he then went on to say Audit the Fed becoming law would have an enormous impact on the markets and the Fed’s ability to conduct monetary policy.

So which is it? Either Audit the Fed is useless, or it’s the most powerful, dangerous bill in Congress.

The Fed can’t seem to make up its mind.

Other than that, the speech was mostly recycled talking points about our audit encroaching on the Fed’s mythical “independence” (secrecy).

One quote in particular from Powell stuck out to me, though.

[I]t is jarring – and that’s putting it politely – to hear it asserted that the Fed carries out its duties in secret and is unaccountable to the public and its elected representatives.”

Actually, that describes the Fed perfectly.

The annual audits of its balance sheet are devoid of any meaningful information.

The core of the Fed’s operations have been kept secret – by law – since 1978.

The year before the legislation implementing these audit restrictions passed, the Deputy Comptroller General of the Government Accountability Office (then called the General Accounting Office) testified before Congress saying, “[w]e do not see how we can satisfactorily audit the Federal Reserve System without authority to examine the largest single category of financial transactions and assets that it has.”

In regards to the “secretive” aspect, current Fed talking points tell us that they are the most transparent central bank in the world.

(Hmm, sounds a lot like President Obama claiming to have the “most transparent administration ever.”)

They often point to the quarterly Fed press conferences, the biannual Humphrey-Hawkins hearings on Capitol Hill, and the speeches and lectures given by various Fed officials at random times throughout the year on Wall Street or at universities, like the one we attended.

It’s important to note here that the Fed’s quarterly press conferences didn’t start until April 2011, two years after we began our effort to Audit the Fed.

It came on the heels of our successful push in the 111th Congress that ALMOST saw Audit the Fed pass through both houses of Congress as an amendment to the disastrous Dodd/Frank “Wall Street Reform & Consumer Protection Act,” which, rather than rein in the Fed, drastically expanded its power.

(I have to wonder – would President Obama have vetoed Dodd/Frank if Audit the Fed had remained intact, instead of being watered down on the floor by Bernie Sanders to a limited, one-time disclosure of the Fed’s emergency lending?)

John, the Federal Reserve is absolutely secretive and unaccountable – to elected officials and the public at large – and we should be shouting that from the rooftops until Audit the Fed is the law of the land!

But C4L staff primarily attended the event for the Q&A that would follow the speech. You should never pass up an opportunity to put your opponents in the hot seat publicly.

When the time came, Norm immediately shot up his hand.

The Dean of the Law School shot a look over to Norm and began laying out “ground rules” for the Q&A.

Norm put his hand back down.

By this time, it was abundantly clear why we had reserved seats.

The first round of questions would be limited to students and faculty, the second to press and any other students, and, if there was time, a final round would allow for any additional questions from the public. Each round would consist of three questions for Powell to answer.

When they wrapped up round two, Norm immediately shot his hand back up.

The Dean looked right at him and panned to the other side of the room, like a teacher avoiding calling on the “know-it-all” student sitting front and center eagerly trying to answer the question.

You could almost hear him say, “Anyone else have a question?”

After calling on two others, and then taking a moment to scan the room, he reluctantly called on Norm when it was clear no other hands were up.

Norm put Powell on the spot with a great question, one that has been asked repeatedly by supporters of Audit the Fed to its opponents. What specific language in the bills, H.R. 24 or S. 264, gives Congress the authority to “meddle” in monetary policy?

Like Bernanke and Yellen when asked the same question, Powell dodged.

And, really, that’s all he could do.

There is absolutely nothing in Audit the Fed’s language that would allow Congress to “meddle” in monetary policy.

At its core, Audit the Fed is a straightforward transparency bill.

The Fed knows this, and they are terrified of it.

So the last leg for them to stand on is claiming the bill will do something it will not.

In his final remarks on Norm’s question, which closed the event, Powell said, “Some people think this proposal should just be a stepping stone to end the Fed.”

I turned to Norm and said, “ABSOLUTELY!”

Powell came over and asked if we recognized the line, as he heard us laughing about it as we politely applauded the end of the speech. He proudly wanted us to know he pulled it from Ron Paul’sEnd the Fed.

I smiled and replied, “Not only did we recognize it, but everyone sitting in this row has either written or repeated some variation of that phrase at some point. It’s no secret.”

Do we believe that most members of Congress are with us on ending the Fed?

No, we certainly don’t suffer under that delusion.

But, more than 75% of the House has voted twice to Audit the Fed (in 2012 and 2014) because many of our representatives realize the Fed is an overwhelmingly powerful institution that operates in secret and is largely unaccountable to elected officials and the public they allegedly serve – and many are responding to hearing loudly and frequently from C4L members and others they represent.

And the Fed is mortified at the prospect they may soon have the veil of secrecy lifted and be exposed as the counterfeiters and monetary manipulators they are.

Why else do you think they would go on such an offensive?

The Fed should learn to embrace the line Americans are told when we push back against the surveillance state: they have nothing to fear, if they have nothing to hide.

Based on their relentless protests, and media counter-offensive, I’d say they are hiding plenty.

In Liberty,

Tim Shoemaker
Director of Legislation

P.S. Unlike the Federal Reserve, Campaign for Liberty can’t just print money out of thin air.

If you and I are going to Audit the Fed, it’s going to take more resources than we currently have.

Please take a moment today to chip in $10 or $20 to help us reach and mobilize millions of Americans to Audit, and then End, the Fed!

 

Because of Campaign For Liberty’s tax-exempt status under IRC Sec. 501(C)(4) and its state and federal legislative activities, contributions are not tax deductible as charitable contributions (IRC § 170) or as business deductions (IRC § 162(e)(1)).www.CampaignForLiberty.org

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