Audit the Fed Bill is Just More Rand Paul Grandstanding — and It Will Hurt Women


Sen. Rand Paul (R-Ky.) is a conservative rock star whose outrageous political antics have drawn national attention of the sort that Miley Cyrus drew when she twerked at the 2013 MTV Video Music Awards. Namely, some were appalled, and some rolled their eyes. Paul's letter to Sen. Harry Reid (D-Nev.), which announces his intent to hold the nomination of Dr. Janet Yellen as the chairman of the Federal Reserve unless the Federal Reserve Transparency Act is also considered, should inspire the same reaction. Millennial women should realize that the filibuster is Rand Paul's modus operandi of drawing attention to his Audit-the-Fed legislation to publicize himself.

Rand Paul has previously filibustered to gain celebrity, such as when he held hostage John Brennan's nomination for the CIA to protest US drone policy on American soil against Americans suspected of terrorism, but then he drew 79% of Americans' support. But playing politics with the Fed is dangerous.

"The idea behind an independent Federal Reserve Bank is to insulate policymakers from political pressures so they can make rational decisions about economic policy not based on the day's whims," says Dan Sichel, economics professor at Wellesley College and former Senior Associate Director (senior staffer) at the Federal Reserve. One example of an elected official seeking instant gratification was President Nixon, who in the 1970s leaned hard on the Fed to make the economy look good for his re-election. When he inherited an "overheated" economy, Nixon coyly instructed his adviser Arthur Burns, "You see to it. No recession."

For us laywomen who can't distinguish supply from demand curves (but only understand and aspire to Project Runway model Heidi Klum's curves and assets), how does the Federal Reserve create better economic performance? The Federal Reserve Act says that Fed has a mandate to maintain price stability (low inflation) and maximum sustainable employment (keeping unemployment rate near its long-run equilibrium rate around 5.5%). Price stability means it's easier to save for the retirement years past menopause or finance new companies to better balance work and families if inflation rates are low and stable. Those are favorable macroeconomic conditions to create jobs for women who want to be working.

The Federal Reserve Transparency Act that Rand Paul introduced is a misleading misnomer. When people say make the Fed transparent, what they mean in the business world is check the books: make sure the balance sheet and income statements are right. The Fed really is audited normally, because its data is publicly available on its website. In reality, the bill is designed to limit the independence of the Federal Reserve. It's also designed to derail the nomination of a female rock star in her own right, Yale-educated economist Janet Yellen.

Really, the Audit-the-Fed legislation should be widely known as just another chance to use and abuse the filibuster so that Rand Paul can attract national attention for a possible presidential run in 2016. Yet the national attention he's getting around his failure to attribute sources is actually fanning the flames of his notoriety. Rand Paul should learn a lesson from the title of pop sensation Lady Gaga's album: that fame can be a monster.