Claims are made that auditing the Fed would compromise its independence. However, by independence, they really mean secrecy. The Fed clearly cherishes its vast power to create and spend trillions of dollars, diluting the value of every other dollar in circulation, making deals with other central banks, and bailing out cronies, all to the detriment of the taxpayer, and to the enrichment of themselves. I am happy to challenge this type of “independence”.

They claim the Fed is endowed with special intellectual abilities with which to control the market and that central bankers magically know what the market needs. We should just trust them. This is patently ridiculous. The market is a complex and intricate thing. No one knows what the market needs other than the market itself. It sends signals, such as prices, that should be reacted to and respected, not thwarted and controlled. Bankers are not all-knowing and cannot ignore the rules of supply and demand. They might act as if they are, but their manipulation of the market just ends up throwing it wildly off balance, which gives us the boom and bust cycles.

They claim the Fed must remain apolitical. No organization is apolitical that relies on the President to appoint the Chairman. In fact, it is subject to the worst sort of politics – power to create trillions of dollars and affect the value of every dollar in the country without the accountability of direct elections or meaningful oversight! The Fed typically enacts monetary policy that is favorable to particular administrations close to elections, to the detriment of long term considerations. They do this partly because of the political appointee process for the Chairmanship.

The only accountability the Federal Reserve has is ultimately to Congress, which granted its charter and can revoke it at any time. It is Congress’s constitutional duty to protect the value of the money, and they have abdicated this responsibility for far too long.

Kohn’s threat came as Ron Paul’s bill to audit the Federal Reserve (HR 1207) has picked up 256 co-sponsors — more than 55% of the House of Representatives. HR 1207’s companion bill in the Senate, S 604, has already attracted 8 co-sponsors. Kohn and his boss Ben Bernanke are obviously very concerned over the prospect that the American people may soon have a look at their books.

H.R. 3126 would control the most intricate details of operating a community bank.

New Iberia, LA, July 9, 2009 – H.R. 3126, misleadingly named the Consumer Financial Protection Agency Act of 2009, was introduced late Wednesday, July 8 by Rep. Barney Frank (D-MA), and which would create a completely new federal agency to oversee and control the daily operations of community and small town banks.

Under H.R. 3126, every bank would be forced to offer federally approved “standard financial products and services.” This would impose uniform products on every bank without regard to local communities, economies, or needs of customers. Deviations from the federal mandates would make community banks subject to frivolous lawsuits.

“This is a breathtaking control grab of ordinary community banks in small towns across America,” said Ross Little, Jr., Senior Vice President of Teche Federal Bank. “This measure would grant unprecedented power to the federal bureaucrats and grant even more power to the Federal Reserve, an already unaccountable and non-transparent body. Americans should be outraged.”

This legislation would devastate community banks, hurt the economy, and harm the ability of community banks to offer services to those who need them most, particularly low to moderate income families. It would result in major layoffs in the banking industry. It would also make it much more difficult to provide financing for home loans and other services.

“Clearly, Washington liberals do not have the best interests of ordinary Americans at heart, despite their repeated claims. This legislation should be exposed for what it is.” said Little.