Will Helicopter Ben Get Audited?

Something momentous has to be in the works if it unites House Republicans like Ron Paul and House Democrats like Dennis Kucinich, and that subject is auditing the Federal Reserve. Barney Frank is the chairman of the House Financial Services Committee, and he's now saying that Ron Paul's bill will clear his committee by the end of October, setting up the very real possibility the bill could be done by the end of the year.

“Here’s what we plan to do: I want to restrict the powers of the Federal Reserve in a number of ways,” he said. “First of all, they will be the major losers of power if we’re successful, as I believe we will be, setting up that, uh, financial product protection committee.”

The committee Frank mentioned was proposed by President Barack Obama during the campaign, as a way of protecting consumers. It was formally presented to Congress in the President’s financial regulatory reform white papers in July, noted law firm Wiley Rein LLP.

“The Federal Reserve is now charged with protecting consumers,” continued Frank. “They were supposed to do sub-prime mortgage restricted … Congress in 1994 gave the Federal Reserve the power to adopt rules to ban bad sub-prime mortgages. … They have the power to ban credit card abuses. They have the power to do most of it. They, under Greenspan, did nothing.

“Under Bernanke, they started to do things, but only after Congress started, when I became chairman of the [House Financial Services Committee], we began to act on these things: Sub-prime mortgages, credit cards, overdraft … And after we started, the Fed did. So, that’s why one of the reasons why in the new consumer protection agency we will take away from the Federal Reserve the power to do consumer protection.”

Frank added that Congress will reverse an action by the Democratic Congress of 1932 that gives the Fed authority to lend money at will.

“Under section 13.3 of the Federal Reserve Act, they can lend money to whoever they want,” he said. “We are going to curtail that lending power. We are going to put some constraints on it.”

Good. Like I've said before, the thing that make Ron Paul dangerous is that about 40% of his ideas make sense and I'd like to see them implemented, including auditing the Fed and us getting out of the world police business with our military. It's the other 60% of his far-right neo Goldwater agenda that is the problem.

He's right about the Federal Reserve, however.