This is the Cato Daily Podcast for Thursday, May 27, 2010. I'm Caleb Brown.

The case for auditing the Fed is obvious, says Cato Institute adjunct scholar Arnold

Kling. We don't know how we got to where we are and where we are is

unprecedented in terms of the monetary base and the tools the Fed claims the

authority to use and the sources of that authority.

Kling is author of the new Cato briefing paper,

the case for auditing the Fed is obvious,

available at Cato.org.

The traditional argument for the need for independence

is that the... The if the Federal Reserve is put under pressure it'll be put under pressure it'll be put under pressure to inflate excessively.

Now I kind of question that because inflate excessively.

Now, I kind of question that because the United States

had an experience with inflation in the 1970s.

It was very unpopular.

It cost many politicians their jobs and I think politicians

remember that well enough not to be pressing the Fed for inflation and I have not

seen any signs of politicians doing that.

By the same token political actors are not independent. They are subject to people's whims, and they frequently do things that

the results of which are unpopular, that is we, over about the same time period, people became very disenchanted

with the growth of government. So it seems like the independence of an institution

doesn't necessarily guarantee that it's going to not engage in actions, the

results of which are very unpopular.

...