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Thursday, December 09, 2010 3:39 PM

Bloomberg Poll Shows More Than Half of Americans Want Fed Reined In or Abolished

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In exceptional news for Ron Paul, a Bloomberg poll shows More Than Half of Americans Want Fed Reined In or Abolished

A majority of Americans are dissatisfied with the nation’s independent central bank, saying the U.S. Federal Reserve should either be brought under tighter political control or abolished outright, a poll shows

The survey, conducted Dec. 4-7, also shows deep skepticism, especially among Republicans, over the Fed’s Nov. 3 announcement that it would buy bonds in an attempt to bring down unemployment and prevent deflation. More than half say the purchases won’t help the economy.

The policy, known as quantitative easing, was the target of criticism in Washington and overseas. That prompted Fed Chairman Ben S. Bernanke to appear in an interview on CBS television’s “60 Minutes” program on Dec. 5 to defend his actions.

Americans across the political spectrum say the Fed shouldn’t retain its current structure of independence. Asked if the central bank should be more accountable to Congress, left independent or abolished entirely, 39 percent said it should be held more accountable and 16 percent that it should be abolished. Only 37 percent favor the status quo.

Republicans and independents are more likely to support ending the Fed, with 19 percent of independents, 16 percent of Republicans, and 12 percent of Democrats wanting to do away with the central bank. Among those who identify themselves as supporters of the Tea Party movement, which wants to rein in government, 21 percent want to abolish the Fed.

Republicans in Congress have taken aim at the Fed’s dual mandate to achieve both maximum employment and stable prices. Last month, two Republicans, Tennessee Senator Bob Corker and Indiana Representative Mike Pence, proposed removing the employment mandate to focus the Fed on stable prices. Corker plans to introduce legislation next year.

That legislation would amend the Humphrey-Hawkins Full Employment Act of 1978, which created the Fed’s dual mandate.

Most members of Congress haven’t taken a hard look at the Fed in decades, said Representative Paul Ryan, a Wisconsin Republican in line to head the House Budget Committee. “They’re really beginning to wake up on this,” Ryan said in an interview.
The risk is letting Congress set monetary policy. Neither the Fed nor Congress should set rates. If anyone would be worse than the Fed, it would be Congress.

However, Ron Paul is well aware of that problem. His proposal is to abolish the Fed and let the free market set interest rates.

One small first step would be to kill the dual mandate provision of the Fed.

For more on dual mandates please see Geithner Politicizes the Fed, Warns Congress to Not do the Same; Idiocies and Ironies; Economist James Galbraith Unfit to Teach

Mike "Mish" Shedlock
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