Ron Paul's Plan to Tame the Fed

Take on Bernanke, usher in transparency, and rein in the Fed's autonomy

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In a boon to the Tea Party, Texas Congressman Ron Paul won his bid Thursday to lead the House subcommittee overseeing the Federal Reserve. The quixotic libertarian is a longtime opponent of the Fed and is, in many ways, philosophically opposed to its existence. What does he have in store for the powerful central bank? And what, furthermore, does this move mean for the career of Ron Paul, himself? Political observers speculate below:

Paul vowed in an interview with The Hill last month that as chairman he would shine a light on the Fed's policies, which he called opaque and destructive. If necessary, he would be willing to subpoena Fed officials to come testify before his panel, he said. Paul has introduced legislation in the past to abolish the central bank, and pushed hard in a failed effort to include a provision in the Dodd-Frank financial reform law that would require a complete audit of the Fed's operations.
  • He'll Challenge Bernanke  "Populist (especially conservative populist) backlash against the Fed is ascendant," writes Adam Sorensen at Time, "and Paul now has a platform from which to challenge Bernanke et al. on the transparency, autonomy and, yes, existence of the institution."
  • He'll Try to Shake Things Up  "I have my doubts," writes Josh Green at The Atlantic, "about how successful Paul will be in using his chairmanship to win people over to the ideas of Ludwig von Mises and his fellow Austrians, although I pray that somebody on the committee invites Paul Krugman to testify (the theatrics would be incredible!)." That said, he continues, "there can be no doubt that the broader effect of Paul's chairmanship will be to bring additional pressure against the Fed and further stoke the considerable national anger at the central bank. Ben Bernanke, take two aspirin and prepare to testify!"
[He] became nationally known during his 2008 presidential campaign. His campaign to audit the Fed picked up steam as the central bank deployed trillions in emergency loans in the midst of the worst financial crisis since the Great Depression. Paul's bill gained the support of 320 of 435 members of the House and a portion of the measure ended up in the Dodd-Frank financial regulatory overhaul enacted this year.
  • Which Means He Probably Won't Run for President Again, writes David Weigel at Slate: "In Paulworld, the denial of this job would have been a clear sign that he couldn't move up in Congress, nudging him to look for another way to spread his message."
  • Bonus  Here's a clip of Paul elaborating on his opposition to the Fed at a political rally:
This article is from the archive of our partner The Wire.