I spoke recently with Barney Frank, Chairman of the House Financial Services Committee, and asked him about the Federal Reserve Transparency Act, which would give the GAO the authority to audit the Fed and report its findings to Congress.
I asked him if he supported the bill. "Not in every exact detail," he said, but he indicated that he was in favor of giving Congress more ability to oversee the Fed.
I also wanted to know if there would be committee hearings on the bill. He said that before the August recess "there will be a hearing on that particular bill and others," both in Mel Watt’s Subcommittee on Domestic Monetary Policy and Technology and Dennis Moore’s Subcommittee on Oversight and Investigations.
The President has said that he believes that the Fed should get more power, and that it is "accountable and clear when it comes to these large systemic firms that could potentially bring down the entire financial system."
But this puts him at odds with the 237 bipartisan cosponsors of H.R. 1207, well in excess of the 218 needed for a majority in the House.
The video above, which has now been seen over 830,000 times, shows Federal Reserve Inspector General Elizabeth Coleman being questioned recently by Rep. Alan Grayson. She could not say which banks had received trillion dollars in Fed lending, what losses the Fed had suffered on its $2 trillion portfolio, did not know that the Fed engages in trillions of dollars in off-balance-sheet commitments, and had no plans to investigate role of the Fed in allowing the collapse of Lehman Brothers.
This is the woman who is in charge of inspecting and reporting on the Fed. It’s no mystery why members of the House disagree with the President, and don’t believe that the Fed is sufficiently "accountable and clear."
5780 people have endorsed Grayson’s efforts to bring accountability to the Fed, including Dean Baker, Naomi Klein, Bill Greider, Tyler Durden, Bill Black and Jamie Galbraith.