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Kai Ryssdal: Now that Wall Street banks seem to have survived those government stress tests of a week or so ago, there's an interesting idea floating around up on Capitol Hill. Some unlikely political allies are pushing a piece of legislation that calls for a full-scale audit of the Federal Reserve. A stress test for the Fed, if you will, and its 12 regional banks. The big worry about Wall Street, if you remember, was that their balance sheets wouldn't be able to stand up to an even more sour economy. Now some are having the same question about the Fed. Since the financial crisis really got going, Bernanke and Company have been spending money like it's going out of style. From Washington, Marketplace's Steve Henn reports.
STEVE HENN: Congressman Ron Paul originally proposed the bill to audit the Fed's recent $2 trillion spending spree.
RON Paul: The whole point is we don't know exactly what they have done.
But this Texas Republican with libertarian leanings has an unlikely ally in the Senate.
BERNIE Sanders: It goes beyond political ideology.
Sen. Bernie Sanders is a socialist from Vermont.
Sanders: The bottom line here is you have an institution, which is cloaked in secrecy, which has enormous power over our country. And the American people have a right to know what is going on there.
Their bill already has attracted 149 co-sponsors. James Hamilton is an economist at the University of California Santa Barbara. He says an audit is a good idea.
JAMES Hamilton: By the very nature of what they are doing the Fed is much more directly involved in the allocation of credit and deciding where money is going to go.
Since the financial crisis began, the Fed stepped in to save giant insurer AIG. It supported the commercial paper market. It's even propping up the market for auto loans. In other words, the Fed's picking winners and losers. And in a recent speech, former Fed Chairman Paul Volcker says that's bound to attract the attention of Congress.
PAUL Volcker: I don't think the political system will tolerate the degree of activity the Federal Reserve has undertaken.
But some economists worry as politicians get more involved, they may try to interfere in monetary policy and undermine the Fed's independence.
In Washington, I'm Steve Henn for Marketplace.