Top progressive senators are running away from a bill authored by Sen. Rand Paul (R-Ky.) to audit both the Federal Reserve’s monetary policy operations and millions of foreclosures. Their aversion could doom any chance for public transparency surrounding the widespread abuse that banks deployed against homeowners in the aftermath of the financial crisis.
Both Sen. Elizabeth Warren (D-Mass.) and her fellow financial reform advocate, Sen. Sherrod Brown of Ohio, the top-ranking Democrat on the Senate Banking Committee, have come out against Paul’s proposal, which would for the first time provide a public accounting of the central bank’s monetary policy maneuvers and its transactions with foreign central banks.
“Sen. Brown has supported recent actions that have brought historic levels of transparency to the Federal Reserve,” spokeswoman Meghan Dubyak told The Huffington Post. “But he does not see how this legislation will benefit working Americans.”
Warren and Brown insist they’re on board with more transparency in the Fed’s regulatory operations, but they’re drawing the line at monetary policy.
“I oppose the current version of this bill because it promotes congressional meddling in the Fed’s monetary policy decisions, which risks politicizing those decisions and may have dangerous implications for financial stability and the health of the global economy,” Warren said in a statement provided to HuffPost.
Still, this idea of “political independence” is difficult to reconcile with basic principles of democratic accountability. It’s also a distortion of the concept underlying the 1913 law that created the Fed.
“That independence is of course independence from the executive branch,” University of Texas economist James Galbraith testified at a House hearin