Economists Opposing Fed Audit Have Ties to Fed
November 20, 2009
The Huffington Post
By Ryan Grim
As the debate over an audit of the Federal Reserve intensifies in the House, one camp is trotting out eight academics that it calls a “political cross section of prominent economists.”
A review of their backgrounds shows they are anything but.
In a letter to the House Financial Services Committee earlier this month, all eight wrote that they support the type of amendment now being introduced by Rep. Mel Watt (D-N.C.). Watt’s approach purports to increase Fed transparency while it actually would tighten restrictions on any audits that could go forward.
The letter was sent around Wednesday by Watt’s staff to members of the committee in advance of a vote scheduled for Thursday.
Watt’s measure is in competition with an amendment cosponsored by Reps. Ron Paul (R-Texas) and Alan Grayson (D-Fla.), which would repeal the restrictions that Watt leaves in place.
But far from a broad cross-section, the “prominent economists” lobbying on behalf of the Watt bill are in fact deeply involved with the Federal Reserve. Seven of the eight are either currently on the Fed’s payroll or have been in the past.
The Fed connections are not outlined in the letter sent around to committee members on Wednesday, but are publicly discernible through a review of their resumes, which are all posted online.
In September, Huffington Post reported that the Federal Reserve has accomplished a soft form of effective control over the field of monetary economics simply by employing — and being the means for career advance — for an overwhelming proportion of the discipline.
Now that the Fed is locked in a legislative battle on the Hill, it can call on those economists to give their “unvarnished” opinions to lawmakers.
The connections that the seven economists lobbying Congress have to the Fed are not incidental and four of them maintain current positions.
Let’s run the traps:
Frederic Mishkin is a former board member, having served from 2006-2008. His career at the Fed stretches back to 1977 and he currently holds two positions: one as a member of the Center for Latin American Economics at the Federal Reserve Bank of Dallas, where he’s been since 1996; and another as an academic consultant to the Federal Reserve Bank of New York, where he’s been since 1997.
Anil K. Kashyap is currently a consultant with the Federal Reserve Bank of Chicago, a position he’s held since 1991. He’s also on the economic advisory panel of the New York branch and was a consultant there in 2003. He was a visiting scholar at the division of monetary affairs at the Board of Governors of in1994, 2001 and 2005 and at the division of international finance in 1997.