Update on the Fed Audit

Alan Grayson on the Bill

On Tuesday, we were getting reports from there was a conspiracy afoot to emasculate the bill in the dead of night, using an amendment put forward by Representative Mel Watt (D-NC) wherein the GAO could "audit" the Fed, but could not actually get detailed information. It actually made the Federal Reserve less transparent.

Yves Smith rather colorfully, and very accurately described the amendment as, "Tantamount to saying you are permitted to operate a strip club as long as the patrons are prohibited from looking at un or underclad bodies." (heh)

What followed was a bit of theater, where the opponents of the audit, rolled out economists who argued that the audit proposal was destructive, but neglected to mention their own financial ties to the Federal Reserve:

But far from a broad cross-section, the "prominent economists" lobbying on behalf of the Watt bill are in fact deeply involved with the Federal Reserve. Seven of the eight are either currently on the Fed's payroll or have been in the past.

The Fed connections are not outlined in the letter sent around to committee members on Wednesday, but are publicly discernible through a review of their resumes, which are all posted online.

It should also be noted that the publishing staff of almost every significant economic academic journal has similar conflicts of interest with regard to the Federal reserve.

Well, despite the best efforts of the Federal Reserve, and Barney Frank, and Mel Watt, the Paul/Grayson audit bill was passed by the House Finance Committee by a vote of 43-26, 15 Dems voted for it, in addition to all the Republicans.

Hopefully, this will progress further, but my guess is that the knives will be coming out on this.

Major props to Ryan Grim of HuffPo, he's the author of the HuffPo links here, who has been on this like white on Rice.