It might not be a surprise to find a smile on the face of Federal Reserve Chairman Ben Bernanke when he appears before the House Financial Services Committee Wednesday. It looks to be the last time he will have to face off against Rep. Ron Paul (R-Texas).
While unforeseen events could always compel Bernanke's return to testify, his delivery of his semi-annual report on the nation’s monetary policy may mark the final time Paul will have the chance to take swings at his least favorite institution, as the lawmaker is retiring at the close of the rapidly dwindling session.
Paul wrote the book on Fed-bashing — it’s called “End the Fed,” — and he plans to use his last chance to keep hitting the same notes he’s been hammering throughout his years in Congress.
Paul has not always been a regular presence during committee events, especially in recent years. But he has always carved out time when Bernanke pays a visit. Even in the thick of the GOP primary this year, the long shot presidential candidate found time to get away from the campaign trail when Bernanke testified in February. There, he harangued the Fed chief about devaluing the dollar and refusing to legalize other forms of U.S. currency, going so far as to shake a silver coin at Bernanke.
For his part, Bernanke has largely taken Paul’s tirades in stride. Following the silver coin lecture, Bernanke wryly opened his remarks by saying, “First of all, nice to see you again.”
When Republicans took control of the House in 2010, Paul was finally handed the keys to the subcommittee that oversees the nation’s monetary policy. Speculation immediately began about how large of a thorn Paul would be in the side of the Fed now that he had a chairman’s gavel to swing around. But with the power to finally probe deep into the Fed, Paul opted not to fling subpoenas at the central bank, opting instead to launch a series of wonky hearings about economic theory and the central bank.
While some Fed officials did end up testifying, he largely called in favored economists and academics to detail the perceived flaws of the nation’s monetary system.
Now, Paul admits the hearings, like so many that come at the subcommittee level, did not garner much attention, characterizing them more as academic seminars than probing investigations.
“In politics, it’s a lot of grandstanding to get attention and do a little shouting and accusing… and see if you can get attention through conflict. My approach has been different,” he said. “I wouldn’t try to brag and say I’ve changed the world as head of my subcommittee.”
Nonetheless, Paul is confident he leaves the mark of his anti-Fed mantra on Congress. Critiques of the central bank now occupy a unique political space, as both the left and the right have united in criticizing the financial institution. While none are quite as extreme as Paul’s efforts to erase the Fed from existence, Democrats and Republicans alike have offered comprehensive bills this Congress that would rework the Fed’s mission.
Paul’s bill to comprehensively audit the Fed was cleared by the House Oversight Committee in June in a voice vote, and seems destined for passage by the full chamber thanks to its 271 cosponsors. And critiques of the Fed were a common refrain at the peak of the Occupy Wall Street movement.
In fact, that growing drumbeat of Fed skepticism may have altered the Fed’s in-house policies as well. Bernanke has steadily pushed the central bank to explain itself more in public, as it now offers detailed information on the thinking of various Fed officials, followed by Bernanke explaining the Fed’s policy shifts at regular press conferences throughout the year.
“We are making inroads,” Paul said. “We have a younger generation right now that’s more informed about the Federal Reserve than I ever dreamed would happen.”
For his part, Paul said he plans to keep detailing his problems with the Fed away from the halls of Congress, and he hopes people will continue to listen. Among those he hopes to continue reaching out to is Bernanke himself.
“Who knows if he’ll still take my emails, but maybe I’ll send him one every once in a while,” he said.