Audit the Fed Advances

The floor leader for HR 459, the “Audit the Fed” bill, was not Rep. Ron Paul. It was Rep. Darrell Issa, one of the GOP’s most recognizable stars. Yesterday, near the end of debate, Issa described the bill as a necessary check on the power of financial elites.

“The Federal Reserve is the people’s bank,” he said. (You can tell he’s not a hardcore libertarian – those folks know it’s a private corporation.) “If you have more than 500 stockholders, you have an obligation to considerable disclosure.” Issa argued that new audits were needed, because “the 9/11 of the financial market, a trillion dollars in TARP money, have taught us one thing: What we don’t know can hurt us. We’ll never again say that some people are so smart we don’t have to look over their shoulder.”

It’s a total sea change in how politicians talk about the Fed. In six short years, it’s gone from an institution widely seen to be brilliant, and above politics, to a currency-deflating rough beast that must be checked. The audit passed with 327 votes.