The Left and the Right Take Aim at the Fed

Illustration by 731; Photograph by Getty Images

It’s going to be an exciting week for Ron Paul. His presidential campaign is in the midst of a nationwide fight to pick up delegates to send to the Republican National Convention in Tampa this summer. Here in Washington, the Texas congressman will preside over hearings that take aim at the institution Paul has criticized throughout his political career: the Federal Reserve. On Tuesday, the House subcommittee on domestic monetary policy and technology, which Paul chairs, will consider various proposals to tweak, revamp, and overhaul the Fed.

The Texas libertarian has long argued that the Federal Reserve is the root of many economic evils and should be eliminated. His ideas, which for most of his career have been considered to be on the fringe, have moved into the mainstream of the GOP.

One proposal Paul will air on Tuesday, which is being introduced by Indiana Republican Mike Pence, would limit the Fed’s responsibilities to controlling inflation. Another Republican proposal, the Sound Dollar Act, would shift control of some aspects of monetary policy to the regional Federal Reserve banks and out of Washington.

Democrats and liberal groups have also attacked Federal Reserve Chairman Ben Bernanke’s policies, albeit not as scathingly as those on the right. They’ll have their day at Paul’s hearing, too. The Occupy movement protests that the Fed is held captive by the interests of major banks. Massachusetts Representative Barney Frank has a bill that would centralize even more control in Washington, moving it away from the regional banks. Representative Marcy Kaptur (D-Ohio) would curtail the influence of industry by cutting the 14-year terms of Fed governors in half and doubling the amount of time a retiring member of the Fed must wait before taking a job at a bank. Dennis Kucinich (D-Ohio) would take even more power from the Fed: He’d make it part of the Treasury Department.

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