The Fed: When Congress Gets Lazy

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The Fed Coins Money Because Congress is Lazy? (photo: Patrick Lydon | sociecity)

The Fed Coins Money Because Congress is Lazy? (photo: Patrick Lydon | sociecity)

I’d like to start with a little piece of our U.S. Constitution, Article 1, Section 8:

Congress shall have the power…
To coin Money (and) regulate the Value thereof”

Since 1787, the constitution has given the right to congress to regulate and coin money. Handing Congress this power ensured that a body elected by the Citizens of the United States would be held directly responsible and accountable by its citizens for the actions it made.

Today, however, the responsibility of ‘coining’ money and regulating currency lies with the Federal Reserve, not directly with congress.

To compound this problem, despite the “Federal” moniker in its name, the Federal Reserve is essentially a privately-owned entity. Although it was indeed established by congress, the Federal Reserve very often executes the duties assigned to congress on its own, behind closed doors, and without input from said congress; it’s a situation in which, only after a decision has been made, do our congressional representatives learn of it. In short…

Congress has no direct accountability, no direct decision making powers, and little to no influence over what the Federal Reserve does to create — or destroy — money.

The Federal Reserve is run by a private board of governors, each serving 14-year terms, yet congress does not directly elect the board members, that duty falls to the President of the United States pending approval of the senate (the House of Representatives is left out).

A Call to Arms for the Private Sector

Following the Fed: McDonald's Hamburglar Militia

Following the Fed: McDonald's Hamburglar Militia (Illustration: Patrick Lydon | sociecity)

Given the precedence set in the creation of the Federal Reserve — where Congress literally handed a congressionally-reserved  power over to a private entity — it makes you wonder: what would happen if all congressional duties in Article1, Section 8 of the U.S. Constitution were to also be handed over to private institutions.

Other rights which could be  given away to private institutions would be:

  • To regulate commerce with foreign Nations
  • To hand out patents
  • To hold court trials
  • To punish pirates (yes, pirates on boats)
  • To declare war on other countries
  • To fund, train and maintain an Army and Navy
  • To ‘call to arms’ said army, navy, or militia
  • To tell government how land can be used
  • To make any and all laws they deem necessary and proper

If we were to follow the lead of what Congress did with the Federal Reserve, we might one day see McDonald’s handing out patents or perhaps even training a Hamburglar Militia…

Then again, maybe a Hamburglar Militia would be preferable to the Federal Reserve.

Can I get fries and a drink with that?

For More Information:
About the Federal Reserve Bank (Federal Reserve Official Site)
Federal Reserve Bank Structure (San Francisco Branch Site)
Article I of the Constitution (hosted by Cornell Law School)
Federal Reserve to Gain Power (Washington Times)
Congressman McFadden’s Remarks on the Federal Reserve