Williams introduces bill to improve Federal Reserve monetary policy decisions
U.S. Congressman Roger Williams (R – Austin), who serves as the vice chair on the House Committee on Financial Service’ Subcommittee on Monetary Policy and Trade, introduced H.R. 4759, the FOMC Representation Improvement Act. On Wednesday, the Subcommittee received testimonies from Dr. Norbet Michel, director at the Center for Data Analysis, and Mr. Alex Pollock, senior fellow at the R Street Institute, regarding the positive impacts that his legislation will have on American consumers.
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Williams’, Michel’s and Pollock’s remarks below:
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“Mr. Pollock, in your testimony you spend some time discussing the checks and balances necessary for our Constitutional government. No part of the government should be exempt from oversight, the Fed included.
“Often times, the Fed performs action outside of its defined role of monetary policy – unaccountable to anyone. This needs to change. By exercising the power of the purse and putting the non-monetary policy functions of the Fed on appropriations, Congress can begin to reign in this out of control entity.
“In your estimation, is the proposal a step far enough in the right direction to begin to make the Fed more accountable to Congress?”
Pollock: “Congressman, in my opinion it is a definite step in the right direction, but more accountability would be desirable, and this committee has – in other contexts discussed – additional substantive accountability of the Federal Reserve with respects to its monetary and financial operations. I think that’s a good idea.
“As I pointed out in my testimony in the 1970’s, the Democratic Party worked very hard to try to make the Fed more accountable to Congress they were right but we need to do more effectively.”
Williams: “Additionally, Mr. Pollock, when dealing with uncertainty of the economic and financial future, you also stated in your testimony that the promotion of intellectual diversification within the organization is important.
“One of the proposals before us provides for at least two staff members to advise each member of the Board of Governors, independent of the Chairman’s influence. It seems to me that Fed governors ought to have access to unbiased advice if they are to make sound decisions.
“Do you feel that the Board has, at times, fallen prey to group-think? Would this proposal help to promote the intellectual diversification that you feel is so important to dealing with uncertainty?”
Pollock: “I think it definitely would, and I think a problem recognized by people who are governors other than the chairman, is this fact that the staff always devotes itself to the chairman and the dominate agenda. This would be a very good proposal.”
