Will Wilkinson argues that the Federal Reserve needs to be audited so that we know for sure it is independent. I hadn’t thought of that and it is a reasonable point. Still, I am skeptical of the precedent set by Congress auditing the Fed before the body is even cold. No one can say with confidence what actions were justified because we do not yet know how the consequences will play out.
Will further suggests that
The attitude of many macro and monetary economists about the operation of the Fed reminds me more than a little bit of the attitude of neocons about defense and foreign policy. Something with the flavor of: “You people are too stupid to understand the real existential threats out there–to understand how we, the big boys, are keeping you safe. You should be grateful, but we don’t ask for gratitude. We’re just asking you to shut up and believe what we, The Serious People, tell you to believe. Or else.”
This seems a bit unfair. First, not to wax too political but I think the grown-ups were highly skeptical about invading Iraq. If memory and Google serve me correctly the neo-cons were making arguments about good vs. evil.
Second, I think most economists are more than happy to debate why the financial crisis happened and whether or not the Fed’s actions were appropriate.
What I would not like to see is the Fed singled out for public examination by Congress. What I also think is unnecessary are any audits into the money trail behind those loans that are repaid. If the taxpayer does not end up short on a transaction with a bank then I don’t see a justification for breaking confidentiality.