Actually, the Post's editorial writers probably did not know that this is what they argued in their editorial trashing the bill, but it is what they said. The Post warned readers that the bill: "would destroy financial markets' faith in the Fed and, by extension, the value of the U.S. dollar." Of course the only way to bring the trade deficit down to a sustainable level is to reduce the value of the dollar. The over-valued dollar was arguably the major cause of the imbalances that led to the current crisis. It directly led to the environment in which an $8 trillion housing bubble could grow. If an audit of the Fed by the Government Accountability Office (the main provision of the Fed Transparency bill) is all that is needed to correct the trade imbalance, then this is a very strong argument for the bill. Remarkably, the Post apparently still has not noticed the $8 trillion housing bubble and the current recession. If it had, it would realize that this is one of the main motivations for the bill. The Fed was unbelievably irresponsible/incompetent in allowing the growth of such a dangerous bubble. The country now has almost 25 million people who are unemployed or underemployed as a result of the Fed's disastrous policies. Millions of people are losing their homes and tens of millions are losing their life savings. The country is likely to lose more than $6 trillion in output ($20,000 per person) due to the Fed's inept job performance. In this context, warning the public of dire consequences from passing this bill is more than a little silly.
--Dean Baker
