By Zachary Roth from Yahoo! bloggers
“I’m not calling for the violent overthrow of the federal reserve system,” Rep. Ron Paul (pictured) has told Yahoo!.
Well, that’s a relief. Instead, Paul, the Texas Republican who now chairs the congressional panel overseeing the Federal Reserve, said he simply wants “a real discussion on monetary policy.”
But it’s perhaps not surprising that Paul used an interview Wednesday with Dan Gross and Aaron Task of Yahoo! Finance’s Tech Ticker (watch video below) to offer reassurance about his peaceful intentions. An outspoken libertarian opponent of efforts to regulate the money supply–the Fed’s raison d’être–Paul is the author of the 2009 book End the Fed. And last month he took over as chair of the House Subcommittee on Domestic Monetary Policy–a post which will give his unorthodox views more prominence than ever.
In the interview, Paul offered a taste of what the discussion he’s seeking might look like. He described the Fed as a “banking monopoly,” adding: “They want to do central economic planning by rigging interest rates and what the money supply should be.”
And he derided the central bank’s $600 billion program to stimulate the economy byÂ buying Treasury bonds as a “total failure.” It’s been good for Wall Street, he said, but “hasn’t done anything for Main Street; hasn’t done anything to give us real jobs; hasn’t done anything for people who are losing their houses.”
“He’s supposed to give us full employment and stable prices, and we have neither,” said Paul, referring to Fed chair Ben Bernanke.
Indeed, unemployment remains high, at 9 percent. But Fed officials argue it would be higher still without the asset-buying program, known as QE2. As for inflation, Bernanke yesterday told Congress that it remains “quite low.”
But Paul disagrees, citing “skyrocketing” commodity prices and rising food prices, and taking issue with the way the Fed calculates inflation. “[Bernanke] looks at government stats that are fudged to reassure him he doesn’t have to do anything,” Paul charged.
Paul argued that by simply ending the asset-buying program, Bernanke also could help solve the deficit problem. “All he needs to do is quit buying treasury bills and the interest rates will go up and the Congress will quit spending,” Paul said.
Two Republican lawmakers recently announced a plan to strip the Fed of its mandate to work for full employment, allowing it to focus exclusively on controlling inflation. Paul said he’d support that idea, but he argued that conducting a full audit of the Fed–something he recently introduced legislation to do–is a more effective way to keep the central bank in check.
Watch the video below…
(J. Scott Applewhite/AP)