Ryan Grim
ryan@huffingtonpost.com | HuffPost Reporting
As the debate over an audit of the Federal Reserve intensifies in the House, one camp is trotting out eight academics that it calls a “political cross section of prominent economists.”
A review of their backgrounds shows they are anything but.
In a letter to the House Financial Services Committee earlier this month, all eight wrote that they support the type of amendment now being introduced by Rep. Mel Watt (D-N.C.). Watt’s approach purports to increase Fed transparency while it actually would tighten restrictions on any audits that could go forward.
The letter was sent around Wednesday by Watt’s staff to members of the committee in advance of a vote scheduled for Thursday.
Watt’s measure is in competition with an amendment cosponsored by Reps. Ron Paul (R-Texas) and Alan Grayson (D-Fla.), which would repeal the restrictions that Watt leaves in place.
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.
In September, Huffington Post reported that the Federal Reserve has accomplished a soft form of effective control over the field of monetary economics simply by employing — and being the means for career advance — for an overwhelming proportion of the discipline.
Now that the Fed is locked in a legislative battle on the Hill, it can call on those economists to give their “unvarnished” opinions to lawmakers.
The connections that the seven economists lobbying Congress have to the Fed are not incidental and four of them maintain current positions.
Let’s run the traps:
Frederic Mishkin is a former board member, having served from 2006-2008. His career at the Fed stretches back to 1977 and he currently holds two positions: one as a member of the Center for Latin American Economics at the Federal Reserve Bank of Dallas, where he’s been since 1996; and another as an academic consultant to the Federal Reserve Bank of New York, where he’s been since 1997.
Anil K. Kashyap is currently a consultant with the Federal Reserve Bank of Chicago, a position he’s held since 1991. He’s also on the economic advisory panel of the New York branch and was a consultant there in 2003. He was a visiting scholar at the division of monetary affairs at the Board of Governors of in1994, 2001 and 2005 and at the division of international finance in 1997.
Pete Klenow was a visiting scholar at the Federal Reserve Bank of Minneapolis from 1994-1999, 2003-2004, 2006 and again this year. From 2000-2003 he was also a senior economist at that branch. He’s currently a visiting scholar at the Federal Reserve Bank of San Francisco, a position he’s held since 2005. He was a visiting scholar at the Federal Reserve Bank of Kansas City from 2004-2006.
Ricardo J. Caballero was a visiting scholar at Federal Reserve Bank of Boston from 2004-2005 and a visiting scholar at the Federal Reserve Board on multiple occasions.
Robert Hall was a research assistant at the Board of Governors of the Federal Reserve System from 1982-1984 and an economist there from 1988-1991.
Thomas Sargent was an adviser to the Federal Reserve Bank of Minneapolis from 1981 to 1987 and continues to write frequently for Fed-sponsored journals.
Micheal Woodford is currently on the Monetary Policy Advisory Committee of Federal Reserve Bank of New York, a position he’s held since 2004. He’s also listed as a consultant to the research department there dating back to 2005. In the past, he’s been a visiting scholar at the Board of Governors and various regional branches in 1987, 1993-1998 and 2000-present, often at multiple banks in the same year.
Economists with Fed connections strongly reject the notion that being paid by the bank influences their thinking. But Robert Auerbach, who spent years investigating the institution and is the author of “Deception and Abuse at the Fed”, says that those economists are simply in denial. “If you’re on the Fed payroll there’s a conflict of interest,” says Auerbach.
The tie between the economists backing Watt’s amendment and the Fed doesn’t by itself mean that it’s bad policy, but it does make clear which amendment is favored by the Federal Reserve. If there’s still any doubt, the e-mail from Watt staff notes that former Fed chairs Alan Greenspan and Paul Volcker also support a version of it.
Meanwhile, a broad coalition of liberal organizations is lining up behind the Paul-Grayson amendment, which also has the backing of most Republicans on the committee.
The AFL-CIO and other labor groups, as well as Americans for Financial Reform signed on to a letter posted Wednesday calling for committee members to back the Paul-Grayson approach.
“In creating the Federal Reserve nearly 100 years ago, the Congress envisioned a central bank free from political pressure. But the structure that may have once ensured independence now appears to put the Fed much closer to the financial industry than the American people, who deserve to know who the beneficiaries are,” reads the letter.
The Fed, in other words, is not presently independent of political pressure, but that pressure comes from Wall Street banks rather than from the American people through their elected representatives.
It’s a distinction that the note from Watt’s staff on Wednesday subtly acknowledges, by focusing on legislative and executive branch pressure, rather than financial industry influence. The Paul-Grayson amendment, it warns, “would place the United States well outside of the mainstream of industrialized nations that shield their central banks from political interference by the Legislative and Executive branches of government, with potentially disastrous results to the U.S. economy.”
Commentary from The Liberty Tree Lantern:
Capt. Karl is scratching his head on one part of this article. The President of the AFL-CIO is a member of the private and exclusive club of megalomaniacs, founded by The Federal Reserve “System” called The Trilateral Commission. According to their own website their primary directive is to create a One World Government / New World Order. Such a One World Government would be at the end of the puppet strings of The Federal Reserve cartel of twelve privately owned banks, who created The Trilateral Commission in the first place. So why is the AFL-CIO bucking the Watt Amendment? Any comments or info on this readers? This doesn’t fit any form of logic. Additionally, as many people know from the 1984 Grace Commission Report, the US Government doesn’t get any income taxes from the American People. After transfer payments to various Socialist programs, like Social Security and Medicare for example, all income taxes go DIRECTLY to The Federal Reserve “System” for payment on the “Public Debt”. So EVERY SINGLE PENNY that the US Government spends comes from and is borrowed from The Federal Reserve. So every single Government program, except a couple of transfer programs, comes from the bottomless money pit at the Federal Reserve, who are the programmers of “The MATRIX” which is our economy based on little pieces of green paper printed out of thin air called FEDERAL RESERVE “NOTES” that our minds have programmed in public schools, the main stream media, The Federal Reserve, and The US Government, to believe are worth 100 cents apiece when in the ‘real’ world, outside of “The MATRIX” which only exists in our minds, they are really only worth 2 – 3 cents now after TARP, Bank and Corporate Bailouts, Stimulus and Socialist spending programs and various Government sanctioned “Ponzi” schemes. Before this recent accelerated monetary policy programs the Dollar has been worth only 4 cents apiece for decades, even though in our minds we believed that they were worth 100 cents as we have been programmed to believe. Of course much of the world today is starting to revalue the Dollar to its ‘real’ value of 2 – 3 cents, which will result in “hyperinflation” and, thereby, the total collapse of ‘The MATRIX’ (our economy) that has only existed in our minds for many decades, since fractionalized banking started chipping away from the gold standard and until it completely was eliminated by the US Government, anyway. The AFL-CIO greatly believes in Socialism and Democracy which is defined as 50% plus one steals the individual rights, liberty, earnings and property, by popular vote and “mob rule” from the remaining population so that by definition “Democracy” is the purest form of Socialism and/or Communism. The Constitution, in contrast, “guarantees” a Republican form of government in Article 4 Section 4, so as to protect everybody’s individual unalienable rights, earnings and property from the immoral that would rob and steal and from the mob rule of “The Masses”, as Stalin would advocate.
The AFL-CIO believes in “free stuff” Socialist type programs from the US Government, who gets every single nickel from The FED that they spend. So the question becomes; Why is the AFL-CIO biting the hand that “ultimately” feeds them from a bottomless pit of printed out of thin air money and whose President is a major member of the Trilateral Commission? Are they coming to the side of Jeffersonian Constitutionalists now? And, what about this “broad coalition of liberal organizations that are lining up behind the Paul-Grayson amendment? Don’t they understand that ALL GOVERNMENT MONEY comes from THE FEDERAL RESERVE and NOT from income taxes? Haven’t they read the Grace Commission Report? Without THE FED Socialism and Government “free stuff” couldn’t exist. I don’t get it?
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