The Fed's Independance

According to Bloomberg, the Federal Reserve is in a struggle with Congress to maintain its independence. Kansas City Federal Reserve President Thomas Hoenig is releasing a book that outlines the Fed's politcal fight to maintain autonomy. Hoenig is reacting to proposed legislation by two members of Congress, Barney Frank (D) and Chris Dodd (D), that would force every Regional Bank President to be appointed by Congress. Currently, the entire Board of Governors is appointed or approved by Congress and the Presidents are picked internally by Fed officials. This is in essence a checks and balances system so that Congress cannot overpower the monetary system while at the same they have oversight of the Fed. According to Hoenig, and the BBFiles wholeheartedly agrees, if Congress gains too much influence in the Federal Reserve monetary policy may begin to follow the political whims of whatever economic policies would help Congressmen be re-elected. This would retard growth and ensure a very inefficient and volatile monetary policy. The BBFiles would reccommend to Frank and Dodd to drop this proposed legislation immediately.