Misguided, know-it-all libertarians have long advocated for auditing the Federal reserve. Professional economists however, understand that this is a foolish idea, grounded in a misunderstanding of both how our federal reserve works and how it provides prosperity for millions of hard-working Americans. Libertarians have many crazy ideas, but suggesting that the Federal Reserve Bank of the United States should be “audited” is probably the craziest of all.
From even before the creation of a central bank in America, libertarians like Andrew Jackson have been speaking about the supposed evils of central banking and the need to closely “guard” ourselves against “predatory” bankers. They tell stories about the “Rothschilds” conquering Britain and America through the controlling of their money supply, and how the Federal Reserve has “private” shareholders. What they don’t tell you is that since its inception, the Federal Reserve has overseen one of the greatest periods of economic growth ever witnessed in American history. If central banks really are the sinister creatures that libertarians make them out to be, then why do they consistently create so much prosperity for ordinary people?
Modern libertarians imply that our Federal reserve may be using its infinite balance sheet for all kinds of devious things, and and that the public has a right to know about how the fruits of their labor are being spent. But one of the fundamental principles of the Federal reserve system is its independence from political interference. The Federal Reserve was specifically set up to be independent from congress, in order to allow central bankers to enact sound monetary policy, free from political corruption and ulterior motives. Our Federal Reserve’s independence allows our central bankers to spend their printed money as they see fit, without interference by outside forces who do not have the interests of average Americans at heart. Central bankers are selected not only for their economic expertise but also for their moral character and patriotism. We can trust them to reallocate the purchasing power of hard-working Americans to worthwhile causes, to promote the general welfare of society, as outlined in the constitution, and achieve their dual mandate for maximum employment and price stability.
It’s ironic that on the one hand, libertarians believe in “freedom and independence” but on the other hand want to limit the freedom and independence of our Federal Reserve. Without the freedom to make the right choices for our country, without constantly worrying about how their actions will be perceived by the general public and congress, how are our monetary officials expected to continue fostering the profound economic growth we have experienced over the last century? Economists have taken us from horses and carriages to self driving cars, and from the Gutenberg press, to iPhones and iPads! They could never have done this if it hadn’t been for the freedom to focus on their job without interference from sinister outside forces.
It’s sad that in this day and age we still have amateur, armchair economists trying to influence major economic policy and putting the well-being of millions of Americans at stake. So for goodness’ sake, let’s let the economists do the economics, and the politicians do the politics, and keep these two things separate, for the good of the nation and for the future prosperity of our children and grandchildren.