Today was the first major step in what I believe is the most important financial piece of legislation in a long time. I’ve been anxiously following this story all day and was overjoyed to see the Paul-Grayson amendment pass over the ridiculous Mel Watt amendment for HR 1207. I have no doubt this was made possible by a determined resistance urging their Congressmen to act responsibly. Let’s take a look at the proceedings today…
Paul and Grayson deserve tremendous credit for drawing attention to this bill and defeating a very powerful opposition. Grayson’s speech was spectacular and really makes you wonder how anyone could possibly vote against their amendment. I have my suspicions in that regard but will just leave it at that for now.
Finally, let’s take a look at the vote…
I want to end the post by listing the Representatives voting for and against this bill.
The following voted yay and deserve a pat on the back…
Rep. Brad Sherman (D,CA)
Rep. Rubén Hinojosa (D,TX)
Rep. William Lacy Clay (D,MO)
Rep. David Scott (D,GA)
Rep. Paul W. Hodes (D,NH)
Rep. Ed Perlmutter (D,CO)
Rep. Jackie Speier (D,CA)
Rep. Travis Childers (D,MS)
Rep. Walt Minnick (D,ID)
Rep. John Adler (D,NJ)
Rep. Steve Driehaus (D,OH)
Rep. Suzanne Kosmas (D,FL)
Rep. Alan Grayson (D,FL)
Rep. Gary Peters (D,MI)
Rep. Dan Maffei (D,NY)
Rep. Spencer Bachus (R,AL)
Rep. Michael N. Castle (R,DE)
Rep. Peter King (R,NY)
Rep. Edward R. Royce (R,CA)
Rep. Frank D. Lucas (R,OK)
Rep. Ron Paul (R,TX)
Rep. Donald A. Manzullo (R,IL)
Rep. Walter B. Jones (R,NC)
Rep. Judy Biggert(R,IL)
Rep. Gary G. Miller (R,CA) no vote
Rep. Shelley Moore Capito (R,WV)
Rep. Jeb Hensarling (R,TX)
Rep. Scott Garrett (R,NJ)
Rep. J. Gresham Barrett (R,SC)
Rep. Jim Gerlach (R,PA)
Rep. Randy Neugebauer (R,TX)
Rep. Tom Price (R,GA)
Rep. Patrick T. McHenry (R,NC)
Rep. John Campbell (R,CA)
Rep. Adam Putnam (R,FL)
Rep. Michele Bachmann (R,MN)
Rep. Kenny Marchant (R,TX)
Rep. Thaddeus McCotter (R,MI)
Rep. Kevin McCarthy (R,CA)
Rep. Bill Posey (R,FL)
Rep. Lynn Jenkins (R,KS)
Rep. Christopher Lee (R,NY)
Rep. Erik Paulsen (R,MN)
Rep. Leonard Lance (R,NJ)
The following voted nay and I believe should never hold office again. I’d strongly urge constituents to do everything in their power to vote these individuals from office next year. This is the absolute most clear sign of representing the taxpayer and middle class, yet they failed…
Rep. Barney Frank (D,MA)
Rep. Paul Kanjorski (D,PA)
Rep. Maxine Waters (D, CA)
Rep. Carolyn Maloney (D, NY)
Rep. Luis Gutierrez (D,IL)
Rep. Nydia M. Velázquez (D,NY)
Rep. Melvin L. Watt (D,NC)
Rep. Gary L. Ackerman (D,NY)
Rep. Gregory W. Meeks (D,NY)
Rep. Dennis Moore (D,KS)
Rep. Michael E. Capuano (D,MA)
Rep. Carolyn McCarthy (D,NY)
Rep. Joe Baca (D,CA) no vote
Rep. Stephen F. Lynch (D,MA)
Rep. Brad Miller (D,NC)
Rep. Al Green (D,TX)
Rep. Emanuel Cleaver (D,MO)
Rep. Melissa L. Bean (D,IL)
Rep. Gwen Moore (D,WI)
Rep. Keith Ellison (D,MN)
Rep. Ron Klein (D,FL)
Rep. Charles Wilson (D,OH)
Rep. Joe Donnelly (D,IN)
Rep. Bill Foster (D,IL)
Rep. Andre Carson (D,IN)
Rep. Mary Jo Kilroy (D,OH)
Rep. Jim Himes (D,CT)
Ironically this audit helps the middle class most and so many Democrats oppose it.
A few more items to note. First Chairman Frank delayed the overall bill’s vote until after Thanksgiving. I’m pretty annoyed by this but if it passes December 1, I can handle a two week delay. I’m just a little worried about what type of shenanigans the opposition might come up with next.
Secondly, I really don’t care for the legislation this bill has been attached to. If this is what is required to overcome an Obama veto, however, it’s a necessary evil. Since this is a celebratory post, I’ll touch on this another time.
Finally, this is the first step toward passage. The next step is to see this bill leave committee and get a broad floor vote. I think these steps are virtually assured at this stage but am still holding my breath. The Senate will be a different animal altogether. Perhaps Jim DeMint or Bernie Sanders takes the lead but we don’t have a Ron Paul or Alan Grayson leading the way over there and could potentially see a similar water down strategy from the opposition. If the Senate passes a different version, I don’t trust Democrat leadership to keep this legislation intact. I think the public support is too overwhelming but hope its not just wishful thinking. Finally, the bill must go to Obama’s desk where Geithner, Summers, and Bernanke have already declared their opposition. With them breathing down his neck, I remain worried. At the same time, I think it was a good move to attach this to a liberal bank reform bill. Time will tell… I’ll keep this site updated with the latest.
I need to read more about to make a better judgement. Do you have any concerns about the erosion of the ability of the Fed to conduct an independent monetary policy as a result of this and other bills like this?
Drew
The short answer is I have no concern whatsoever and think this is largely an excuse to keep things secret. Here’s the questions I’d ask in response to that question.
1) We need to seriously evaluate the Fed’s monetary policy powers. Since Greenspan, the Fed has grossly mismanaged monetary policy and allowed bubble after bubble to take hold. Proof is pretty simple: the monetary base has expanded at an exponential rate and the Fed has kept interest rates too low, far too often. The result has been tremendous inflation eroding America’s middle class and frequent bubbles. The Fed’s mandate has been to keep prices stable and unemployment low… how have they done in this? Their over-management of the economy has been detrimental in every way. Instead, the Fed should be keeping the monetary base stable and defending the middle class. They have failed and this need to be corrected. Continuing secrecy achieves exactly the opposite and encourages the behavior we’ve seen at the Fed over the last 18 months.
2) Nobody ever seems to questions this… but why does the Fed need to manage interest rates? In a market based economy, interest rates should be the byproduct of supply and demand. Just as the Fed doesn’t know the market price of televisions, cotton shirts, or aluminum, they are simply guessing what the interest rates should be. This is clearly illustrated by the instability of these rates over the last twenty years. If you left it to the market, you’d have a stable supply of money, stable inflation, stable interest rates, and a stable economy. Leave it to the Fed and you have Greenspan botching interest rates to create a massive housing bubble. Today, we have banks borrowing money for free and investing them in risky assets only to be backstopped by more free money. We also have a dollar being absolutely destroyed.
3) You also have a Fed drawing completely incorrect solutions about the Great Depression and combating deflation. They believe the Depression could have been avoided with more aggressive monetary behavior. This is absolutely not true and proven by Japan’s response to their own credit bubble responses. Japan’s approach was proven incorrect and every Fed program has been a dismal failure yet they continue with this same approach. The public has a right to understand their programs and evaluate their effectiveness.
4) The Fed is already far from independent. They are printing money to recapitalize banks in partnership with the Treasury’s policies. They are using this additional money to fund the government’s deficits and monetize our debt. The Fed’s monetary policy is far from independent and almost certainly doesn’t have the average American’s best interest at heart.
5) Even if an audit opened the door to more intervention, I think the most important thing is to get an accurate picture of what is going on at the Fed. Our Constitution gives Congress the power of appropriation, not a central bank monopoly. The Fed has become as powerful as any branch of government and has absolutely no oversight. This is why they are able to expand their balance sheet to a major fraction of our GDP and we have no idea where the money is going or what the results of these actions are.
I wrote on this topic in a little more detail in the following post:
http://www.muwabi.com/blog/?p=509