FED: New Bill takes aim at FED

[dcjones]

http://www.nasdaq.com/article/texas-lawmaker-to-introduce-bill-changing-feds-mandate-20120223-01849

WASHINGTON -(Dow Jones)- Another Texas politician is taking aim at the Federal Reserve.

Unlike fellow Texas Republican Rep. Ron Paul, however, Rep. Kevin Brady isn't calling for an end to the central bank.

Brady, the top Republican on the Joint Economic Committee, said Thursday he plans to introduce a bill in early March that would eliminate half of the Fed's current dual mandate to pursue both stable prices and maximum employment.

Instead, Brady proposes requiring the Fed to focus solely on inflation, or maintaining "the purchasing power of the dollar in order to foster long-term economic growth and stability," the lawmaker wrote in a statement Thursday.

Brady's bill is not the first to demand changes from the central bank. Dogged Fed critic and GOP presidential candidate Ron Paul last year introduced legislation that would abolish the Fed's Board of Governors and 12 regional banks, but it received little support in the House.

Outside of Congress, former GOP presidential hopeful and Texas Gov. Rick Perry took heat for criticizing the central bank on the campaign trail.

Brady proposed several other changes to the Fed, including allowing all 12 regional Federal Reserve Bank presidents to vote on the Fed's policy-making committee. Currently only five of the 12 regional bank presidents can cast a vote each year, along with the full Board of Governors, though all are involved in the discussions.

The Texas lawmaker also would like to see transcripts of the policy-making committee released more promptly. Right now, full details of Fed officials' individual views and comments during Federal Open Market Committee meetings are made public after five years, though a summary is released after three weeks.

 

[IDefendThePlatform]

Me seeing this thread:

1) excitement - ooh I need to read this one
2) snore - change the mandate? Not interested
3) worry - this might be worse than nothing. I could see this competing with an actually useful measure like auditing the fed or free competition in currency act. "ok let's compromise and just change its mandate"


Hope I'm wrong.

 

[Travlyr]

Stall tactics. Just support Ron Paul's HR 1098 already.

H.R. 1098
Rep. Paul introduced the Free Competition in Currency Act of 2011, H.R. 1098, in the United States House of Representatives on March 15, 2011.

 

[hazek]

This is completely pointless and it actually may help the FED maintaining a better image since people wouldn't blame it for unemployment anymore but just the inflation part of their con.

 

[Steven Douglas]

I think it's a step in the right direction, as it prevents the Fed from using employment as an excuse for anything. The fallacy of full employment is an ENORMOUS normative underpinning of Keynesian thought, and a tool for aggregate-thinking exploitation. HR 1098 would do away with the need for this bill, but they are not mutually exclusive - one being a field goal, the other being a touchdown.

You can take a mandate away from the Fed, while at the same time looking to repeal legal tender laws and explicitly prohibit-the-prohibition of competing currencies. Both strip power from the Fed, so I'm behind them both; no either/or to it for me.

 

[GeorgiaAvenger]

Its good people are finally paying attention.

 

[Steven Douglas]

Its good people are finally paying attention.

+rep for the best point of all. Few ever gave it a thought before. For decades, scores. Especially in a society where MOST people think that a "Federal" "Reserve" "Bank" is a) Federal, b) a Reserve and c) a bank!

It's what I like most about the Ron Paul candidacy, and everything he brings to the table, which goes far beyond the presidency, which I don't see as the big prize. He has helped to identified the seeds of destruction that were planted long ago, bringing them squarely into the national discourse at the right time, even while planting the right seeds of counter-destruction. It does NOT matter whether or not Ron Paul rises or falls. His presence assured the momentum of his movement, and that many will rise up, both now and after him.

In other words, and I could be wrong - I don't think this bill would have even seen the light of day had Ron Paul not existed.

 

[Voluntary Man]

They're trying to treat the symptoms. Dr Paul wants to cure the disease (via Fed-ectomy).

 

[Zippyjuan]

Trying to target employment and inflation at the same time can conflict. Just look at 1980 when we had high, persistant inflation. The "cure" was to raise interest rates very high to choke off the inflation but that choking came at the cost of high unemployment- which soared to above ten percent. But after it was taken care of, the economy re-adjusted and things started to grow again. Targeting inflation keeps economic expectations fairly fixed and thus predictable and makes it easier for businesses and individuals to make better decisions as to what to do in the future. That would be better for the economy in the long run. Business hates uncertainty. I agree that if we do have the Fed targeting something that it would be best to focus on inflation and let the markets sort out everything else. They are better at that than the Fed is.

 

[Steven Douglas]

Targeting inflation keeps economic expectations fairly fixed and thus predictable and makes it easier for businesses and individuals to make better decisions as to what to do in the future.

One of the problems with having a man behind the curtain are all the distortions that happen, primarily because nobody can predict massive movements in the marketplace based on behind the scenes manipulations. We can see interest rates, but have no idea what is happening, or has happened in the past, with the ridiculously collectivized money supply itself (as seen in the last "quasi-audit" of the Fed). That alone creates uncertainty, as everyone TRIES to anticipate and adjust - all quite differently, and at different times - to what they THINK is going to happen to the value of the currency as prices clear the market.

There is also the nasty bit about "businesses and individuals", especially the differences in how each are equipped to "make better decisions" for the future. They cannot be conflated. Businesses have a number of tools at their disposal, the first being decisions about what prices they set, and can INSTANTANEOUSLY change, according to supply, demand and prevailing market conditions.

Individuals (wage earners, those living on fixed incomes, etc.,) are always the biggest losers, forever playing catch-up, because they cannot set their prices based on future market expectations, and are typically the very last to adjust, having lost value in the interim. The notion that they can change their spending habits (on the erroneous assumption that individuals are like businesses, and should somehow be expected to pay close attention to artificial monetary policy and equally artificial aggregate currency manipulation) is no power at all, and does nothing to address the fact that unless they raise their prices to adjust for inflation early, they will lose - making them the number one financiers who subsidize all the rest, since they are perpetually, automatically and by design, forced to sell their services at an exponentially increasing discount. Most sell their services at the prevailing market rate at a nominal rate that is adjusted only periodically - annually, IF THAT. Meanwhile, from the moment the nominal wage is established, it is losing market value, as shown by all long term inflationary trends.

So I reject the notion that this is some kind of neato-deato makes sense, pretty stable, some kind of wonderful, business as usual, working methodology - because it is a systematic form of theft. If you are a banker, public funds recipient, someone credit worthy who is nearest to the teats of artificial money creation, or a firm empowered to make INSTANTANEOUS changes in price, you have some power. But wage and salary earners, those on fixed incomes, and SAVERS without the "most favored economy" status? Screwed, always late to the party, and victims of systemic THEFT.


Target inflation, my ass. When you think of targeting inflation, picture money cannons AIMED at the real targets - the channels, public AND private, that get first use of all that "targeted" money - at every present and future currency holders' expense.

 

[thoughtomator]

Getting rid of the dual mandate is good, as the unemployment half was the excuse the Fed has been giving in order to betray the "stable prices" half of the mandate. As anything can be justified in the name of allegedly lowering unemployment, this closes off a very problematic issue.

If the Fed's only mandate is to keep the dollar's value stable, then its only course of action is essentially the opposite of what it has been doing, which would be a good thing - if not as good as getting rid of the Fed altogether, certainly a step to limit some of the abuses.

 

[dcjones]

I think its a good bill too. At least some people are waking up. i would like them to legislate a target rate of 0.0% instead of the 2.0% they currently have as well.