For those of us who have begun to feel like we’ve slipped into a parallel dimension, statements like those on June 29 from the Federal Reserve’s Chairman don’t help us get back to “reality”.
Actually, reality is people like Fed Chair Bernanke are no longer even putting up a pretense about who is in charge of the United States’ monetary policy.
There is a pesky “little” problem with Bernanke’s attitude and statements.
That little problem?
The Constitution of the United States of America.
“Article I, Section I:
All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.”
Section 8 references those legislative powers concerning “monetary policy”:
“The Congress shall have Power To:
lay and collect Taxes, Duties, Imposts and Excises,
to pay the Debts…
To coin Money, regulate the value thereof, and of Foreign Coin…
No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all Public Money shall be published from time to time”
Section 10 references the forms of money to be used:
“No State shall…
make any Thing but gold and silver Coin a Tender in payment of debts;“
Unless my reading comprehension skills are seriously flawed, it appears that under what is supposed to be the “supreme law of the land” in this country, the branch of government which is supposed to be in charge of monetary / fiscal policy IS Congress.
Unfortunately, what can we expect? After nearly a century of operations without any oversight, why wouldn’t the powers that be at the Fed believe they are in charge of US monetary and fiscal policy?
Bernanke’s ridiculously arrogant statement is simply the result of not following the Constitution. There were sound reasons why the Congress was intended to have exactly those powers.
Mr. Bernanke is not only arrogant, but he is also contradicting himself.
In 2007, Mr. Bernanke attempted to defend Fed actions by citing “the mandate given by Congress.”
If I had the opportunity, I would ask the Fed’s Chairman the following questions: “So which is it, Mr. Bernanke? Is the Federal Reserve independent or is it’s authority (“mandate”) granted by Congress? Or is it some twisted combination of the two, leaving us in a no-man’s land as far as the Constitution is concerned?”