While many question the competence and effectiveness of the strategies taken by Ben Bernanke's Federal Reserve, the semi-autonomous nature and whether it will remain in such a way have come under fire from many critics, most notably Ron Paul. The libertarian hailing from Texas has supported a measure that would authorize audits of the Federal Reserve's actions during the financial meltdown this previous Fall and the current economic recession. While Paul calls for complete abolition of the Fed, many others are calling for an increase in oversight the board must face.
I have a few issues with these happenings. Primarily, Paul's support of a complete removal of the current Federal Reserve Board is ludicrous. There is no better way to combat the danger of inflation and deflation more quickly or effectively. Without Bernanke, it is quite possible that the current downturn would be much worse if it weren't for Helicopter Ben swooping in and helping save the financial sector. The target for the Federal Funds Rate had to be dropped in to keep the credit flowing throughout the economy. Without such Monetary Policy, our economy would have been even worse off.
Furthermore, the board must remain autonomous. It takes too much time to pass a stimulus bill in Congress, so why should the Federal Reserve be limited by whatever Congress imposes or even the President? What kind of knowledge advantage do congressmen or the President have over a man as qualified as Bernanke. None. Increased regulation of the Federal Reserve system would be devastating as it could delay the implementation of highly needed increase/decreases of the Funds Rate and/or may result in improper action.
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