Oh, yes. Elections have consequences and this one is a gem. Rep. Ron Paul, who is extremely critical of the Federal Reserve and has called to abolish it or, at minimum audit it, may get the opportunity to oversee the Fed.
The Politico reports:
Paul is the ranking member of the Subcommittee on Domestic Monetary Policy and Technology on the Financial Services , which oversees the Federal Reserve, the U.S. Mint and American involvement with international development groups like the World Bank. Unless someone bumps him, he’s next in line for the subcommittee gavel.
Paul is critical of all the institutions he would oversee. He’s long called for killing the Federal Reserve, and this year tried to get an audit of the Fed into the Wall Street reform bill. He’s asserted that the dollar should be tied to the gold standard in order to keep it from losing its value.
In addition, Reuters reports that Paul reemphasized his push for scrutiny of the central bank:
“I think they’re way too independent. They just shouldn’t have this power,” Paul, a longtime Fed critic, said in an interview with Reuters. “Up until recently it has been modest but now it’s totally out of control.”
[snip]
That could create a giant headache for the Fed, which earlier this year fended off an effort headed by Paul to open up its internal deliberations on interest rates and monetary easing to congressional scrutiny.
“It’s an outrage, what is happening, and the Congress more or less has not said much about it,” he said.
[snip]
Paul said his subcommittee would also push to examine the country’s gold reserves and highlight the views of economists who believe that economic downturns are caused by bad monetary policy, not the vagaries of the free market.
Paul also has the support of Rep. Paul Ryan who is set to become the chairman of the House budget committee. Ryan stated concerns over the Fed printing and pumping another $600 billion to purchase US government securities. From Reuters:
Representative Paul Ryan, expected to become chairman of the House budget committee when Republicans take control of the chamber in January, told the “Fox News Sunday” program that the “upsides are very low” in the central bank’s moves to inject more money into the U.S. economy.
“I think its going to give us a big inflation problem down the road,” Ryan said.
The Fed launched a fresh round of so-called quantitative easing last week, saying it will purchase $600 billion in U.S. government securities. The U.S. stock market, which had been rising on expectations of the move, welcomed the move with further gains.
Ryan said the Fed should stick to its main job of ensuring price stability, adding that the Fed’s plan was “destabilizing” investment outlooks.
When the GOP takes control of the House in the 112th Congress, there will be significant changes and it will be worth watching how Reps. Ron Paul and Paul Ryan use these opportunities to really make true and tangible reforms. How will they handle the Fed and how will the Fed handle the scrutinty and accountability it currently isn’t subject.