FEW issues unite Ted Cruz and Bernie Sanders. Increasing government influence over the Federal Reserve is an exception. In January Mr Sanders took a break from the campaign trail to return to Washington to support the “Federal Reserve Transparency Act”, Senator Rand Paul’s bill to “audit the Fed” (Mr Sanders was one of only two Democrats to support the bill). Before that, “audit the Fed” was the clarion call of Ron Paul, and a libertarian and father of Rand. But what does “audit the Fed” mean?The word “audit” brings accountants to intellect. But the Fed already has plenty. Deloitte audits,in the conventional sense, the central bank’s extensive balance-sheet and financial market operations. These expanded during the financial crisis as the Fed began buying bonds and other financial instruments to support the economy. But little mystery surrounds this stuff; every security the Fed owns is listed on its website. The main effect of the fresh Act would be to subject the central banks decisions to heightened scrutiny. In specific, and it would allow the Government Accountability Office (GAO),which analyses policymaking in...
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Source: economist.com