YouTube has the video Bernanke: “The Fed will do whatever Congress tells us to do.”
My previous post Who owns the Federal Reserve? discusses and links to the Federal Reserve Bank’s answer to this question.
Yet, there are still people who refuse to believe it. Here is one rebuttal that makes my point, but the people who posted it didn’t hear what Alan Greenspan said in this video. The posters gave this the title The Federal Reserve is Above the Law.
Let me tell you what I heard, and you can listen to the video to see if you heard the same thing. I will emphasize certain words which I think are key.
The Federal Reserve is an independent entity, and that means basically there is no other agency in government which can overrule actions that we take.
Is Alan Greenspan telling you that the Federal Reserve Bank is another agency of the government? Sure sounds like that to me.
So long as that is in place and there is no evidence that the administration or the Congress or anybody else is requesting that we do things other than what we think is the appropriate thing, then what the relationships are don’t frankly matter.
Is Alan Greenspan telling you that the administration or Congress could request that the Fed do things other than what it thinks is appropriate? He must have had some reason to start the sentence with a qualifying clause. Colloquially speaking, these are called weasel words.
These videos are examples of two different former chairmen of the Federal Reserve Bank telling you the same thing I have been telling you all over this blog. You might also wonder why Barney Frank thinks Congress changed some of the rules that Congress set for the Fed.