For most of my life, I’ve been led to believe that the Federal Reserve is a separate entity that operates independently of the Federal Government. This “separation” allowed the Federal Reserve to operate “independently” of the Federal Government.
Over the years, I came to doubt that Federal Reserve and Federal Government were truly separate and able to act independently of each other. But it was not absolutely clear to me whether the Federal Reserve was, in fact, a dependent agency of the politicians running the Federal Government, or if the Federal Government was a dependent agency of the bankers running the Federal Reserve.
• Recently, however, former Federal Reserve chairman Alan Greenspan was quoted as claiming that he and the Federal Reserve had no real independence from the Federal Government’s control, and he was “just following orders” (so to speak) issued by the Federal Government when he administered Federal Reserve policy from A.D. 1987 through A.D. 2006.
I was skeptical of Greenspan’s claim.
I suspected that Greenspan (88 years of age) was simply getting old and didn’t like being blamed for the economic conditions that precipitated the Great Recession in A.D. 2008. So, he wanted to escape personal responsibility for having caused idiotic financial conditions that might yet collapse the US economy. I suspected that he hoped to evade personal responsibility by denying that he was ever really in control during the 19 years he seemingly ruled the Federal Reserve.
Of course, if he wasn’t really in control, he wasn’t really the economic “maestro” that many people believed. He was, in fact, just a press secretary, a front man, a talking head, for whoever is really in control of the Federal Reserve and perhaps even in control of the Federal Government.
I found all of those implications hard to believe. Surely, the Federal Reserve must have some independence. Greenspan, Bernanke and now Yellen must have some independent control, right?
But today, one of my readers (“Cody”) posted a couple of comments on my blog that provide evidence that the Federal Reserve is actually just an agency of the Federal Government.
• First, Cody pointed out the Federal Reserve’s website is at http://www.federalreserve.gov/ . Note the “.gov” suffix on the Fed’s URL.
If the Federal Reserve were truly an independent entity, I’d expect its website’s URL to end in “.com” or “.net” or some such—but not in “.gov”.
So far as I know, the “.gov” suffix is reserved for only for agencies of the “government”. The Fed’s use of the “.gov” suffix surely implies (and might even prove) that the Federal Reserve is an agency of the Federal Government.
• Second, Cody supplied a quote from a Federal Reserve publication that can be downloaded at http://www.federalreserve.gov/pubs/frseries/frseri.htm which reads:
“As they carry out their duties, members of the [Federal Reserve] Board routinely confer with officials of other government agencies, representatives of banking industry groups, officials of the central banks of other countries, members of Congress and academicians.”
The word “other” in relation to the term “government agencies” clearly implies that the Board of the Federal Reserve views itself as just another “government agency”.
• I won’t say that the “.gov” suffix on the Fed’s website URL, or the Fed’s reference to “other government agencies” is absolute proof that the Federal Reserve is an agency of the Federal Government.
Written by: ALFRED ADASK – continue at ADASK’S LAW