Libertarian Opponents of Fed Audit Compromise Want to “End the Fed”

File-Ron_Paul,_official_Congressional_photo_portrait,_2007 1

Here’s a smart take on the “Audit the Fed” compromise from FDL’s David Dayen. He notes that Dean Baker thinks it’s a pretty good deal, and that the one-time audit though unfortunately limited manages to achieve the core purpose of auditing the Fed and to do so in a more open and transparent way than the House version of the legislation. He also posts an effective rebuttal to the idea of citing Ron Paul as an authority on the question of whether or not the deal constitutes a sellout:

Now I know Ron Paul and some libertarians are angered by this deal. But understand that Ron Paul doesn’t want an audit of the Federal Reserve. He wants to end the Federal Reserve. The best-selling book “End the Fed” that he wrote tipped me off to this. He wants to go back to hard-money policies and a return to the gold standard. Now, you can argue that this would end the cartel of central bankers scheming with their monetary policy, or that it would turn US monetary policy into the inflation-uber-alles laissez-faire mess we’re seeing in Europe that is threatening a global depression. The consequences for Paul’s favored end-state would be catastrophic if implemented in real time. This Fed is failing in different ways – and their actions should draw more scrutiny – but eliminating it would return us to the Stone Age.

Right on. Trying to forge left-right populist alliances has some promise, but also some peril. It’s important to keep your eyes open about what’s going on and recognize that you may work together for a while only to find that ultimately your interests diverge. For someone like Paul who’s just trying to build as much anti-Fed sentiment as possible, there’s no reason to ever say yes to a deal—what he wants is for the Fed to stay secretive and illegitimate-seeming.