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Take the easy vote!

The amended version of Audit the Fed passed the Senate 96 to 0 today. A version that was closer to the original -- that is to say, it would've created a regular audit rather than a one-time audit -- lost, 37 to 62. I'm a bit confused by a world in which 96 senators think we need to know what the Fed did in 2008 and 2009 but only 37 think we'll need to know what the Fed did in 2012 and 2013.

That isn't, by the way, a statement of support of auditing the Fed. I'm honestly a bit undecided on the issue. On the one hand, there's much the public should know here. On the other, the political system is a mess of irresponsibility and demagoguery right now, and that makes the Federal Reserve's freedom of movement more important, and possibly less likely. But I'm totally baffled by the idea of a one-time audit.

By Ezra Klein  |  May 11, 2010; 3:43 PM ET
Categories:  Federal Reserve  
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Comments

Don't you want to know who the 2 trillion the Fed passed out went to? Which assets did the fed buy from whom? I think that audits should be 2x a year, but the results should be held for 6 months or some other method should be used to avoid speculators shorting named companies.

Posted by: srw3 | May 11, 2010 3:49 PM | Report abuse

I think it felt like a compromise everyone could live with, even though it makes very little sense. At least it's establishing some sort of precedent; the Fed's power, combined with its opaque decision-making, is very dangerous for democracy.

Posted by: beckya57 | May 11, 2010 5:13 PM | Report abuse

No mystery here.

The flash crash was a "shot across the bow" and compelled the Senate to eviscerate the original audit proposal to something that is now meaningless and will produce nothing. It's only benefit is to make it appear like they are doing something to restore a sense of oversight over the Fed, but of course, it won't.

Posted by: Lomillialor | May 11, 2010 5:48 PM | Report abuse

Hey Ezra,

I discovered your blog just a couple weeks ago and I'm loving it. I'm a libertarian so we don't exactly see eye to eye but for some reason I'm really drawn to your blog. Maybe because from what I've seen you think rationally about policy and look at the facts?

Anyway from a libertarian perspective the Audit the Fed bill has been THEE major legislation that we have been tracking for, well, quite some time now. It's unfortunate to see the Vitter amendment voted down, but I had a feeling the bill wouldn't get through the Senate (unfortunately).

While it's not surprising, it should be noted that the same people who attack the Fed. for wreckless policies are also empowering the Fed. Also, transparency has been stressed yet when it comes to the Fed. apparently transparency goes out the window. The Fed. is one of the most powerful institutions in America, yet auditing is out of the question? Amazing.

The one-time audit is better than no audit, but the anti-Fed crowd isn't going anywhere.

Posted by: DavidCarlson | May 11, 2010 8:27 PM | Report abuse

I was agreeing with you Ezra, but when you said
"the political system is a mess of irresponsibility and demagoguery right now, and that makes the Federal Reserve's freedom of movement more important"
you lost me. The purpose of the audit is to REVEAL the "irresponsibility and demagoguery" of the Fed ITSELF, which has always been a political tool of the Executive branch and the international banks.
A real audit will show just how "independent" the Fed has really been (i.e., not at all).

Posted by: yetanotherpassword | May 12, 2010 4:09 PM | Report abuse

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