Thursday, December 3, 2009
"Under the banner of increasing [Fed] transparency, Congressman Ron Paul has sponsored a bill that would subject the Fed's monetary policies to an audit by the Government Accountability Office (GAO). The bill is a veiled attempt to undermine the Fed's independence. If it passes, it will cripple policy making--particularly when it comes to inflation. ... What's more, it is highly doubtful that the GAO has the technical competence to evaluate monetary policy. If it did try to conduct these audits, at best it would merely rehash known information. At worst the GAO would generate confusion by offering its own analysis. ... The Fed's independence is critial to its credibility", Anil Kashyap & Frederic Mishkin (K&M) at the WSJ, 10 November 2009, link: http://online.wsj.com/article/SB10001424052748704402404574525570583604860.html.
Uncle Miltie turned over in his grave after reading this. K&M are University of Chicago and Columbia economics professors. Why would GAO auditors be less qualified to evaluate Fed policy than say, Maestro Alan Greenspan? Or Zimbabwe Ben (ZB)? Independence? What are K&M talking about? Hey Kashyap, I have a place for you: Princeton. Please leave. Do K&M think ZB's current policies are insufficiently inflationary? What do K&M think the Fed's purpose is? Mish has a related 19 November 2009 post: http://globaleconomicanalysis.blogspot.com/2009/11/economists-opposing-fed-audit-are-on.html.