Topic: Federal Reserve
STATUS REPORT: Ron Paul's Audit the FED Act, HR 1207 and S 604 HR 1207, Ron Paul's Federal Reserve Transparency Act is up to 207 co-sponsors, close to a majority. So... what to do next?by Jake Towne, the Champion of the Constitution
(libertarian)
Wednesday, June 10, 2009
This February, Congressman Ron Paul (R-TX) introduced HR 1207, the Federal Reserve Transparency Act of 2009 to audit the FED. When I first reported on it in March, privately I was quite ecstatic that there were 11 co-sponsors, and three were Democrats. Why?
Well, Dr. Paul has tried for some time to audit and limit, even abolish, the Federal Reserve. The hallmarks of Dr. Paul's twenty years in Congress are common sense bills that have been mostly ignored as our past Congresses and the Federal Reserve led us down the path to economic ruin. However, what happened next in the House is amazing - HR 1207 now has 207 co-sponsors, close to a majority!
The big picture is that it only takes half a brain and a pulse to get angry about the fact that the central bankers gave the American people the equivalent of a middle finger on Bloomberg's Freedom of Information Act request. The FED denied to disclose how they used $2 trillion dollars in open market operations that they executed outside of Congressional authority. Congress has no clue or control over how the FED used the money since that is not how the FED works. Without an audit, Congress does not even know how much gold our nation owns. Who wants to be on the "No" side with all of the popular sentiment against it? (photo)
The legislative process in Washington is usually as slow as molasses, and most bills die in committee with the obvious exceptions of very long lobbyist bills like the USA PATRIOT Act and urgent banker bailout-stimulus plans that no one in Congress even has time to read before voting on them and are passed in a blind panic. In fact, I personally am insulted by this video of the infamous speedreader incident of this 900-page "Cap and Trade" lobbyist amendment from May. Ron Paul is a veteran legislator, and most of his bills this decade are quite short - HR 1207 is only 446 words.
As a candidate for Congress, I thought I would answer a few questions I have received which also outline the next steps that need to occur. The bill is currently in committee.
Q: "What does it take to get this bill out of committee and on the floor of the House for a vote?"
A: It is possible (but not likely at this point) that the bill will be tabled, or die, while in committee. Committees were formed originally to have focus groups, but their modern usage merely serves to endow the committee chairs from the majority parties with a lot of power, and to stifle the minority party's bills from ever reaching the House floor.
To pass, the committee must have quorum - the necessary amount of representatives present to vote on it - and passing requires a majority of those in attendance at committee before moving to a House vote where only a simple majority of 218 is needed. This process is described here, see page 21/67.
Currently, 34 co-sponsors are on the Financial Services Committee of 71 members, so just two more co-sponsors would give the bill a majority! Please check the roster to the right. Attached here is a spreadsheet with all current co-signers on pages 1-5, and the Financial Services committee members all on page 6. In the file, just click on their name to visit their website and contact them.
Q: "How many co-sponsors does it need to force that? Or does that even matter?"
A: The number of co-sponsors technically does not matter, and co-sponsors are not obligated to vote for the bill. However, it serve as an indicator of the minimum support a bill expected on the House floor, so is a key indicator while in committee. While bills are in committee, they can be marked up and amended, which is why the simplicity of Paul's bill is key - there is simply not much to mark up.
Q: "What if the Chairman Barney Frank (D-MA) continues to postpone a vote on HR 1207?"
A: Representative Barney Frank, D-MA, is the chair of the Financial Services committee. He has not co-signed the bill, and traditionally is allied closely with the banking special interests and the FED, so no cooperation can be expected from him. Frank has spoken about Paul, HR 1207, and committee politics - and boldly proclaiming that there is no inflation while inflation remains high at 7%.
However, page 20/67 states that "three or more members of a standing committee may file with the committee a written request that the chairman call a special meeting" to force a vote.
Furthermore, the rules also state that the committee may be "discharged" or circumvented if a majority of Representatives (218) have signed a motion to discharge the bill from committee. (pages 31-32/67)
Obviously, to help secure the bill's passage, a majority of co-signers - just 11 more would be helpful. The most prudent path still appears to move the bill through committee, and secure a couple more committee members as co-signers. Writing a quick note to the Financial Services committee would also help.
Q: "What is the gravest threat to the bill?"
A: I happen to believe that if this bill can be approved by Congress and delivered to the President, he would sign it per all of his rhetoric about an open government and transparency. A win in the House now appears likely, so I would say the gravest threat is that the bill will die in the Senate. Senator Bernard Sanders (I-VT) has sponsored S 604, the "Federal Reserve Sunshine Act of 2009." The text of the bill is currently identical to HR 1207, but Sanders has zero co-sponsors.
Therefore, activists should target their U.S. Senator's offices. I recommend using DownsizeDC's "Audit the FED" Campaign to thank or urge your representative and Senators to co-sign this bill. However, writing directly to your Senator's office and placing a phone call are also recommended.
An action item summary:
Contact your Representative or target a few from the list above. If two (2) more members of the Financial Services Committee co-sign, HR 1207 will be assured of passing committee unchanged. If eleven (11) more members of the House co-sign, HR 1207 will be assured of passing the House.
PostScript - You can listen me talk about HR 1207 in Part 2 of this interview with the anonymous author of the pamphlet "Common Sense Revisited" from Wednesday. Topics covered in the interview include the FED, governomics, and gold.
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
As always, unlike the NFL, the author grants full permission to allow any accounts of, rebroadcasts, retransmissions, repostings of this article to your blog or anywhere else in order to promote the Restoration of our Republic.
Veritas numquam perit. Veritas odit moras. Veritas vincit. Truth never perishes. Truth hates delay. Truth conquers.
Tu ne cede malis sed contra audentior ito. Do not give in to evil but proceed ever more boldly against it.
The views expressed in this
article are those of Jake Towne, the Champion of the Constitution only and do not represent
the views of Nolan Chart, LLC or its affiliates. Jake Towne, the Champion of the Constitution is
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Jake thanks so much for this post. HR 1207 now has over 220 cosponsors. I came here looking for info on what to do next and found it, thanks to you. As you suggested I e-mailed the Financial Services Committee and have already e-mailed my senators. Next I'll e-mail friends asking them to do the same.
I feel like we now have the Fed on the ropes and must not let up until we win.
i really wanna support this bill. and for soo many reasons, my gut tells me this is a red herring. either: nothing will come of it, the fed is being intentionally sacrificed, or appears tp be so for public PR purposes.
I a m thinking of commissions of inquiry in the past...say: the warren commission, whitewater, 9-11 committees appointment of Kissinger, or even the recently completed NSA report on Pearl Harbor. the problem is that it takes steps for PRs sake, but nothing comes as a result. YET, to the public, everyone thinks justice was served and the report tells us the very same thing everytime: mistakes were made; reform is needed; a newer system, one with an even broader mandate, or broader powers is the result; the "old-guard" resigns with shame, then getting promoted to even higher positions of entrenched power, while a "new guard" ushers in the "new era" where we get still the same henchmen.
jake i know you need to be positive and to find things to give much hope...but I just wonder if this is one of those things to focus public attention on (esp with 207 co-sponsors). always watch what the other hand is doing in the magic show. to borrow a term from Antalk Fekete: prestidigitation is ubiquitous....we just need to figure out its deeper purpose.
Jake, your "Sanders has zero co-sponsors" is telling enough but like PermaCulture Prana, I expect that this is a red herring. It is certainly maintaining the attention and energies of countless activists who could now be more effective by working on their local media rather than Representatives and Senators.
Once millions in local radio and tv audiences hear that a majority of Representatives have co-sponsored Ron Paul's bill but not one Senator has co-sponsored Senator Bernard Sanders bill, what will they do? One thing they could start doing is calling and mailing their favourite networks to demand that they report the news to national audiences.
Posted By: Jake, the Champion of the Constitution
Date: 2009-06-13 14:01:43
@ David and Dan - Thank you for your comments!
@ Prana and Jim - "Red Herring"? Possibly in that the effort to actually get an actual audit may fail. But a waste of time? You probably would have replied the same way when I first wrote about HR 1207 in February. This has snowballed far more than I expected, for one. This bill will hopefully indirectly help many educate themselves about the FED, and then our monetary system
It will be interesting to see 1) if they are amendments to the bill (hopefully not) and 2) actual floor votes. They will serve a purpose, evenif it fails.
Jim - Great idea to contact the local media, but contacting Senators and Reps takes only 5-15 minutes (5 min for emailing, ~15 minutes for phone calls+emails)
I haven't had much luck with the local media myself (my campaign-wise) so while some individuals may have a better chance if they have connections, so instead I try to "become the media" - this article, I suppose, is the best example. Over 3,000 unique hits on this article, and its been posted on a bunch more.
my other instinct was to wonder if this would get ANY press in the senate...and my guess was that it would lose (on a nearly strict partisan vote) on the rhetoric that the fed is the least of our problems (by that time). it made mistakes, but look!: bernanke has stepped down...paulson is gone, (geithner may be sacrificed too) and the true infrastructure remains highly intact. so the fact that sanders has no co-sponsors is a slight surprise (figuring that there should be some senators who want to make it look good, at least), but in no way a shock.
also, i am considering the possibility that they truly intend to sacrifice the fed and give broad powers to the succeeding institution. My guess is it will actually come in the form of an international institution...oh say, IMF/WB or some newer re-formed instit. who might even come into our house and tell do something similar to what obama is doing to the smaller banks right now (or paulson did to BofA and
Jake, please don't misunderstand...this bill is HUGE and very worthwhile. even if it fails. But, if I may use a baseball analogy, our team is down 23-0 (historically it might even be higher) and in the TOP of the eighth, with this bill we've loaded the bases with zero outs. However, if it fails and it has captured the energy of all the fans and teammates (in this case the public and those more active), it will be like hitting into a triple play, IMHO. Setting up a rally and keeping that rally, or even finishing the rally, are very different goals.
It COULD be like a stock (or gold) that shoots from 700-1000 and then lacks the momentum to break out (which of course it will). but that energy is zapped. fortunately, and the reason i bring up this second analogy, is that unlike baseball, even a failed bid to put the kabosh on the FED can (WILL?) lead to something greater, but it also might take long enough to distract people (whitewater) while allowing the kakistrocracy enough time to make the important moves, all the while it is designed to fail. let's hope i'm VERY wrong. but history has taught me that lesson too many times.
i mean NO disrespect. I sincerely hopes it not only is successful, but it brings down the fed and that we move back to a more constitutional form of government and money.
Posted By: Jake Towne, the Champion of the Constitution
Date: 2009-06-13 17:45:45
Dear PermaCulture Prana -
No offense was taken, sorry if my tone was off! I've given a lot of thought to the probability that the FED would be nationalized - which (arguably) I think would mean little change in how monetary policy is run. The FED and Treasury, for instance, have manipulated FOREX and gold markets and almost certainly the stock markets using the ESF, or "Exchange Stabilization Fund" which few seem to write about.
If we stick to the baseball analogy, HR 1207 is just a single, but when the other team is throwing a no-hitter and has bribed all the umpires, we need to take any shot we can get in there.
Hmmm, if we are keeping score, I'd say that it's closer than you think:
5 Wins - Constitution, End of the First Bank of America, Jackson's "routing" of the 2nd Bank, the routing of the London Gold Pool in 1968, the Gold Window Closing of 1971 (though this wasnt a good thing)
7 Losses - Hamilton and the First, the Second, Lincoln's Natl Banking System, the FED Act of 1913, the Theft of 1933, the 1980 Monetary Control Act, and the Banker Bailouts of 2007-9
Call me an optimist, :) but it looks like a 3-run home run will do it!! Ending the FED, the breaking of the Summers suppression scheme would tie it, and a new monetary system of honest money to win it. 5 years or 15 years (or even longer), that's really a question I have no idea what the answer is. That SDR stuff will never work, though it would likely delay the inevitable
That said, the honest money movement is still a long ways from winning - but HR 1207 is taking the message to a lot of people who have never heard of the FED... one of the article I wrote way back in November "How the FED Works" continues to get 500+ hits a month - that's a lot more people who know/more clearly understand the nature of the beast.
fair enough, and your tone wasn't off at all, just sometimes get accused of thinking too negatively (read: critically), and didn't want you or anyone else to think that the cause is not worth fighting. i just think, when playing with people who often get 3 moves for every one we have, and play about 6-10 moves ahead of us, with "take-backs," that we need to scout the board quite closely.
now out of the chess metaphor and back to baseball. actually, if 1207 happens, i think it can be a gap double, w/a runner on first (govt's loss of credibility over the past year or so is that single, or, actually a walk, since the batter didn't do anything the pitcher clearly f-ed up and couldn't hit the strike zone).
but even if I accept your score (and I'm trying to understand how the closing of the gold window is a win? is that because it allowed gold to be priced on a non-fixed basis? i would have included that w/the '33 theft in the loss category, leaving the score 8-4....though damn it sure feels like 23-0 sometimes)...how can we get another couple of runners on base, and how do we get a bunch of utility infielders (i'm a cardinals fan...we always have tons of those!) to crank a 3-run HR, or a grand slam?
curious to hear your thoughts (on baseball, chess, any other game/sport)!
Posted By: Jake Towne, the Champion of the Constitution
Date: 2009-06-14 07:51:23
Dear PermaCulture Prana -
On the gold window, I (arguably) count it as a win for the reason you mentioned - it moved us closer to sound money even though it surely wasn't pleasant. More on this in my next piece.
I think 2012 will be the election year where enough people get fed up to blow the incumbents out of the water... though it could be 2014 and 2016 if the stimulus plans/FED somehow keep it together. In 2010, I am a bit early, and was hoping to see more candidates, esp for US Congress, which is somewhat attainable unlike the Senate which needs the big bucks.
What appears to be happening is that the GOP and Dems are searching their closets to trot any oldtimers who are now "electable" as "change" since they have been out of power for 4+ years or so. So to get a few more runners on base, we need a bunch more brave souls who are fed up enough to enter gov't at any level.
Abolishing the FED is one thing but it does not solve the crisis. If someone brought a 1/10 oz gold coin to the bank in the year 1 AD, and the money remained there until the year 2000 AD, collecting a yearly interest of 4%, the amount of gold in the account would have been 3.6 * 10^31 kilograms of gold. This is 1.9 * 10^27 cubic metres of gold weighing 317 times the complete mass of the Earth.
Credit and interest on money make it possible for an economy to grow above potential during a boom phase. In the boom phase investors add leverage using credit which further intensifies the boom, creating shortages of materials and labour resulting in rising prices. Interest on money entices banks to lend money to leveraged investors during the boom phase. Credit makes it possible to create money out of thin air, which further enables the banks to fuel the boom. When the cycle turns into bust, investors start to deleverage, which further intensifies the bust, creating surplusses of materials and labour resulting in falling prices. What most economists do not see, is that credit and interest on money are the root causes of economic booms and busts.
The root causes of crisis are usury (interest on money) and credit (creating money out of nothing). These problems also arise when there is no central bank or when there is a gold standard. A far more efficient monetary system is possible, without crisis, unemployment or government intervention. See: http://www.naturalmoney.org/introduction.html
Posted By: Jake, the Champion of the Constitution
Date: 2009-06-15 05:54:24
I am afraid your interest example simply doesnt hold water as there has been no entity in human history that could pay interest for so long. The interest could only be paid if the borrower can use it somehow and make further gains. Otherwise the outcome is as above, given a long enough time span.
Interest represents the value of future goods as discounted to present goods - it is the time value of money. In some parts of the ancient world usury was banned for religious reasons before - none of these systems ever had success.
Sovereign nations that used to pay "perpetuals" - say a 2% yield on a loan perpetually - have all collapsed, and sovereign debt of any type any country is far better off without - more on this in another article.
That said, your idea has some merits and attempting to start locally with a scrip would be one way to find out - trick is to find a group that is willing to take a risk. There are plenty of other cons with your idea such as a hoarding tax, but I'll let it go at that.
Currently there are 260 cosponsors to HR1207 and 8 cosponsors to S604. Its time to turn up the heat. The Fed and all the congress-critters who support them want this bill to die. Let's not let that happen. Please start contacting your senators and the Financial Services Committee and urge them in polite but strong terms to support this bill. Letters to the local news papers might be good too.
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This February, Congressman Ron Paul (R-TX) introduced 
Q: "What does it take to get this bill out of committee and on the floor of the House for a vote?" 
An action item summary: