CONGRESSIONAL RECORD— Extensions Of
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E34 CONGRESSIONAL RECORD — Extensions of Remarks January 15, 2010 UB as for his long list of accomplishments. He puting the bill’s significance. Certainly the House Financial Services Committee, is was known as the quintessential university cit- President Obama has made reform one of his an attempt to undermine the Fed’s independ- izen and he cherished his role as professor top priorities. The Senate, of course, has yet ence which will worsen economic policy and to weigh in, and it will probably be months macroeconomic outcomes, particularly on and mentor. before Mr. Obama has legislation on his inflation. Madam Speaker, I offer my deepest condo- desk. Yet if the House bill did come to him, Economic theory and a massive body of lences to Bill’s family. My thoughts are with he should veto it, for one reason: Whatever empirical evidence provide strong support them, and I share their grief of this wonderful good it might do would be canceled out by for the independence of central banks in man I am honored to have called a dear the inclusion of Texas Republican Ron Paul’s their conduct of monetary policy. Subjecting friend. His loss is felt by the many lives he proposal to subject the Federal Reserve’s central banks to short-run political pressure impairs the credibility of their commitment touched in the Buffalo community. monetary policymaking to regular audits by the Government Accountability Office, an to maintaining low and stable inflation, with f arm of Congress. an outcome of higher and more volatile in- flation, interest rates, and unemployment. IN RECOGNITION OF FRANCIS Supporters suggest that the measure would merely provide ‘‘transparency’’ for a secre- This has happened over and over again in the BRILLHART tive, powerful institution. But for all its past, not only in the United States but in wide, bipartisan backing, this is anything many other countries throughout the world. The Fed’s independence gives it credibility but a prudent or centrist law. In fact, it is an HON. IKE SKELTON in fighting inflation which stabilizes infla- attack—born of crisis and the attendant OF MISSOURI tion expectations. During this crisis this emotions—on the political independence the credibility allowed the Fed to take extraor- IN THE HOUSE OF REPRESENTATIVES central bank must have to do its job. dinary action to prevent the recent financial The case for political independence at the Friday, January 15, 2010 market disruption from causing a possible Fed is elementary. Elected officials, such as depression without triggering inflation. Mr. SKELTON. Madam Speaker, let me members of Congress, are inherently loath to take this means to recognize Francis Brillhart, Eventually the Fed will have to scale back tighten the supply of money available to its unprecedented monetary accommodation. a businessman, volunteer, and mayor who has their constituents, even when that might be When the Fed seeks to begin tightening mon- served the community of Holden, Missouri for necessary to fight inflation. U.S. experience, etary conditions, it must be allowed to do so over 43 years. On January 3, 2010, Mr. and that of countries around the world, con- without political interference. Weakening of Brillhart celebrated his 75th birthday. firms this, which is why Congress exempted the Fed’s independence now might raise in- Francis Brillhart has owned and operated the Fed’s money-supply decisions from GAO flation risk, which would cause borrowing scrutiny in a 1978 law. Mr. Paul’s proposal costs to rise and would lower prospects for a Brillhart Music for the past 4 decades. In that would effectively repeal that. Investors al- time, he has donated or provided at reduced strong economic recovery. ready spend enough energy and money try- We believe that the Paul/Grayson amend- cost audio equipment and sound systems to ing to figure out where interest rates are ment will substantially weaken the Federal local churches, nonprofits, and service organi- heading without this additional dose of per- Reserve’s independence and will do serious zations throughout the community. Though his manent uncertainty. Trust in the Fed, and, harm to the economy, particularly at this work with this Holden staple consumed much by extension, the dollar, will evaporate if critical juncture. We recommend that it not of his time, Mr. Brillhart’s true passion was markets believe that the Fed is courting the be adopted in any Congressional legislation. serving others. approval of Congress’s auditors. Ricardo Caballero, Massachusetts Institute Mr. Paul doesn’t care; he’s an ‘‘end the Serving on the Johnson County Real Estate of Technology; Kenneth French, Dartmouth Fed’’ man. In the past, other members of College; Robert Hall, Stanford University; Board, Emergency Management Board, and Congress have basically just humored him. Anil Kashyap, University of Chicago Booth the Community Health Board, Mr. Brillhart It’s a sign of the times—and not a good one— School of Business; Pete Klenow, Stanford worked diligently so that his fellow citizens that they have been Fed-bashed into fol- University; Frederic Mishkin, Columbia Uni- could lead better, safer, and more comfortable lowing him now. To be sure, the Fed may versity; Thomas Sargent, New York Univer- lives. have been lax as a bank regulator. Monetary sity; Michael Woodford, Columbia Univer- The hallmark of his lifetime of service has policy under former chairman Alan Green- sity; Andrew Abel, Wharton School of the span was, in hindsight, too loose. Both fail- University of Pennsylvania; Daron been the 111⁄2 years he served as Mayor of ures contributed to the current crisis—dur- Acemoglu, MIT; Viral Acharya, New York Holden. During that time, Mr. Brillhart ensured ing which the Fed has ventured into new and University Stern School of Business; that government worked for the people he rep- unorthodox areas to stave off depression, Stefania Albanesi, Columbia University; resented. With his family, friends, and neigh- thus unavoidably politicizing itself. Under Laurence Ales, Carnegie Mellon University; bors in mind, he made tough decisions that Chairman Ben S. Bernanke, the central bank Alberto Alesina, Harvard University; Robert benefited all. He left big shoes to fill in has corrected some regulatory errors. It is M Anderson, UC Berkeley; Kathryn Ander- Holden’s City Hall, and he will not soon be for- aware of the politicization risk posed by its son, Vanderbilt University; Boragan Aruoba; gotten. current monetary policies and seemingly is University of Maryland; Paul Asquith, Mas- sachusetts Institute of Technology; Jeremy Madam Speaker, I trust that my fellow Mem- eager to undo them as soon as it safely can. This week, the Fed announced that it will Atack, Vanderbilt University; Alan bers of the House will join me in wishing a phase out special lending programs for Auerbach, University of California, Berke- very happy birthday to Francis Brillhart, a man money market mutual funds, short-term cor- ley. who has bettered the lives of countless resi- porate lending and investment banks by Feb. Costas Azariadis, Washington University dents of Holden, Missouri. 1. in St. Louis; David Backus, NYU; Martin Baily, The Brookings Institution; Brad Bar- f Mr. Paul’s cure is worse than the Fed’s ills, real or alleged. The central bank is already ber, UC Davis; David Bate, University of H.R. 4173, ‘‘THE WALL STREET RE- more transparent than the Fed-bashers let Iowa; William Baumol, New York University; on: It produces an annual report; the chair- Charles Becker, Duke University; David FORM AND CONSUMER PROTEC- Beim, Finance and Economics, Columbia TION ACT OF 2009’’ man testifies before Congress; it releases, with some delay, the minutes of its policy Business School; Geert Bekaert, Columbia meetings. We hope cooler heads prevail in University; Ola Bengtsson, University of Illi- HON. MELVIN L. WATT the Senate, though a similar measure has 31 nois; Dan Bernhardt, University of Illinois; Jagdish Bhagwati, University Professor, Co- OF NORTH CAROLINA co-sponsors there. If not, Mr. Obama will have to get out his veto pen. In fact, it might lumbia University; Alan Blinder, Princeton IN THE HOUSE OF REPRESENTATIVES save everyone a lot of trouble if he made University; Nick Bloom, Stanford; Patrick Bolton, Columbia University; George Borts, Friday, January 15, 2010 that intention clear right away. Brown University; Phillip Braun, University View all comments that have been posted Mr. WATT. Madam Speaker, I would like to of Chicago; Bruce Brown, Cal State Poly- about the article. submit the following information on H.R. 4173: technic Univ. Pomona; Clair Brown, Univer- sity of California, Berkeley; Gardner Brown, [From the Washington Post, Dec. 19, 2009] OPEN LETTER TO CONGRESS AND THE EXECUTIVE University of Washington. THE HOUSE OF REPRESENTATIVE’S REFORM BRANCH Stephen Buckles, Vanderbilt University; PACKAGE HURTS THE FED’S INDEPENDENCE Representatives Ron Paul and Alan Gray- Eric Budish, University of Chicago Booth The House of Representatives has passed a son have put forward an amendment, under School of Business; Francisco Buera, Univer- comprehensive financial regulatory reform the banner of increasing the Federal Re- sity of California at Los Angeles; Jeremy package. It creates a consumer protection serve’s transparency and accountability, to Bulow, Stanford Business School; Craig agency for financial services and establishes subject the Fed’s monetary policy and dis- Burnside, Duke University; John Campbell, a mechanism for resolving failed, system-