Der Spiegel on The Shrinking Influence of the US Federal Reserve
Posted on July 2nd, 2008 by beetlbumjl Tags: Ben Bernanke, Coca-cola, Der Spiegel, doom and gloom, Federal Reserve, George Bush, IMF, Liberty Maven, Pizza Hut, Ron Paul, The Age, UncategorizedGabor Steingart reports from the Spiegel’s Washington DC bureau:
Humiliation for Mr. Dollar: Ben Bernanke, the chairman of the United States Federal Reserve Bank, faces a general investigation by the International Monetary Fund. Just one more example of the Fed losing its power.
The United States Federal Reserve Bank, or Fed, seems as much a part of America as Coca-Cola or Pizza Hut. But at least one difference has become apparent in recent days. While the pizza chain and soft-drink maker are likely to expand their scope of influence in the age of globalization, the US central bank is finding that its power is shrinking.
[snip parts explaining the doom and gloom of the current financial situation]
Under its bylaws, the IMF is charged with the supervision of the international monetary system. Roughly two-thirds of IMF members — but never the United States — have already endured this painful procedure.
For seven years, US President George W. Bush refused to allow the IMF to conduct its assessment. Even now, he has only given the IMF board his consent under one important condition. The review can begin in Bush’s last year in office, but it may not be completed until he has left the White House. This is bad news for the Fed chairman.
When the final report on the risks of the US financial system is released in 2010 — and it is likely to cause a stir internationally — only one of the people in positions of responsiblity today will still be in office: Ben Bernanke.
<sarcasm>Poor Ben.</sarcasm> Reaction to the this article can be found on The Age (an Australian news website). Liberty Maven discusses the dilemma in which the IMF puts Ron Paul supporters:
We are against the IMF and federal style regulation over markets at all levels, yet we painfully yearn for more transparency from the Federal Reserve. If we aren’t yearning for more transparency from the Fed we are advocating abolishing it outright.
So the question is then, do we support the IMF investigating the hated Federal Reserve because it conveniently supports our anti-Fed sentiments? Or are we truly and purely against the IMF and it’s authority to perform such investigations?
One Response to “Der Spiegel on The Shrinking Influence of the US Federal Reserve”
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July 2nd, 2008 at 10:52 am
Can’t it be both? I don’t support taxes but I’m not overly concerned with corporate taxes because they gain benefit from the governments monopoly on force. I generally support constitutional federalism over other forms of government but I still support the DC v Heller decision. It’s a tricky situation. We support the rule of law generally because not doing so too easily leads to rights infringement but rights infringement is the thing we are trying to prevent so ROL is not absolute even though it sometimes sounds like we advocate it should be.
In this case I think it’s less controversial. You can say you want it gone, both the IMF and Federal Reserve, while at the same time advocating them fighting with each other.