Deception and Abuse at the Fed: Henry B. Gonzalez Battles Alan Greenspan's Bank is a newly released book from the University of Texas Press by Robert Auerbach, Professor of Public Affairs at the Lyndon Baines Johnson School of Public Affairs, The University of Texas at Austin. He served for eleven years as economist for the United States House of Representatives Committee on Banking and Financial Services (renamed the "Financial Services" Committee) assisting chairman/ranking member Henry B. Gonzalez carrying out oversight functions of the nation's central bank led by Alan Greenspan.
The Federal Reserve-the central bank of the United States-is the most powerful peacetime bureaucracy in the federal government. Under the chairmanship of Alan Greenspan (1987-2006), the Fed achieved near mythical status for its part in managing the economy, and Greenspan was lauded as a genius. Few seemed to notice or care that Fed officials operated secretly with almost no individual accountability. There was a courageous exception to this lack of oversight: Henry B. Gonzalez (D-TX)-chairman of the U.S. House of Representatives Financial Services (banking) Committee.
In Deception and Abuse at the Fed, Robert Auerbach, a former banking committee investigator, reveals major instances of Fed mismanagement and abuse of power that were exposed by Rep. Gonzalez, including:
Blocking Congress and the public from holding powerful Fed officials accountable by falsely declaring-for 17 years-it had no transcripts of its meetings;
Manipulating the stock and bond markets in 1994 under cover of a preemptive strike against inflation;
Allowing $5.5 billion to be sent to Saddam Hussein from a small Atlanta branch of a foreign bank-the result of faulty bank examination practices by the Fed;
Stonewalling Congressional investigations and misleading the Washington Post about the $6,300 found on the Watergate burglars.
Auerbach provides documentation of these and other serious abuses at the Fed, that confirms Rep. Gonzalez's belief that no government agency should be allowed to operate with the secrecy and independence in which the Federal Reserve has shrouded itself. Auerbach concludes with recommendations for specific, broad-ranging reforms that will make the Fed accountable to the government and the people of the United States.
Robert Auerbach was an economist with the House banking committee during the tenure of four Federal Reserve Chairmen: Arthur Burns, William Miller, Paul Volcker, and Alan Greenspan. Auerbach also served as an economist in the U.S. Treasury's Office of Domestic Monetary Affairs during the first year of the Ronald Reagan administration and as a financial economist with the U.S. Federal Reserve System. Auerbach has been a professor of economics at the American University in Washington, D.C. (1976-83), and a professor of economics and finance at the University of California-Riverside (1983-93). He has written numerous articles, and two textbooks in banking and financial markets. He received two Masters degrees in economics, one from the University of Chicago and one from Roosevelt University, where he studied under Abba Lerner, and a Ph.D. in economics from the University of Chicago, where he studied under Milton Friedman.
Ph.D. in Economics, University of Chicago; M.A. in Economics, University of Chicago; M.A. in Economics, Roosevelt University
Professor of Public Affairs, LBJ School of Public Affairs, The University of Texas at Austin
“The Effects of Price Supports on Output and Factor Prices in Agriculture,” The Journal of Political Economy, (Volume 78, No. 6, November/December 1970), Robert Mundell, editor.
“An Estimation Procedure for the Federal Cash Deficit Applied to the United States Interwar Period,” 1920-1941,” Western Economic Journal, (Volume X, No. 4, December 1971).
“A Demand-Pull Theory of Deflation and Inflation,” The Manchester School of Economics and Social Studies, Blackwell Publishing, (June 1976) pp. 99-111.
“The Phillips Curve And All That, A comment,” with Ronald Moses, Scottish Journal of Political Economy, Vol. XXI, No. 3, November 1974.
“United States - Canadian Economic Relationships,” with Jack L. Rutner, Monthly Review, Federal Reserve Bank of Kansas City, (February 1975).
“The Measurement of Economies of Scale: A Comment,” Journal of Business, University of Chicago Press, (January 1976).
“Money and Income, Is There a Simple Relationship?” with Jack L. Rutner, Monthly Review, Federal Reserve Bank of Kansas City, (May 1975), Reprinted in Issues in Monetary Policy, Federal Reserve Bank of Kansas City, February 1980.
“The Process of Inflation,” Proceedings and Reports of the Center for Yugoslav - American Studies, Research and Exchanges, (June 1975). Financial Seminar in Belgrade, Yugoslavia.
“Time and Frequency Domain Test of Some U.S. - Canadian Relationships Under the Autoregressive Filter,” with Jack L. Rutner, Clive Granger, editor. (August 1976).
"A Negative View of the Negative Money Multiplier,” with Jack L. Rutner, Federal Reserve Bank of Kansas City, (September/October 1976).
“The Concept of Private Income,” with Jack L. Rutner, >, Federal Reserve Bank of Kansas City, (November/December 1976).
"A Causality Test of Canadian Money and Income: A comment on Barth and Bennett, Canadian Journal of Economics, (August 1978).
"The Misspecification of a Nonseasonal Cycle as a Seasonal by the X-11 Seasonal Adjustment Program,” with Jack L. Rutner, Review of Economics and Harvard University Press, November, 1978; (Macmillan Publishing Company, 1983)
Money, Banking, and Financial Markets (Macmillan Publishing Company, third edition 1988)
“A Budgetary Bias For United States Intervention in Foreign Exchange Markets,” Journal of "Public Budgeting and Financial ManagementTimes New Roman
"An Analysis of Prime Rate Lending Practices at the Ten Largest United States Banks with Jake Lewis and Peggy Rayhawk, Staff Report of the Committee on Banking, Finance and Urban Affairs, United States House of Representatives, (Government Printing Office #77-468 0, April 1981)
"The Fed’s Backroom Bailout Policy," Chapman University Law Review, pp. 535-547.
“Institutional Preservation at the Federal Reserve,” "Deception and Abuse at the Fed: Henry B. Gonzales Battles Alan Greenspan’s Bank,"(The University of Texas Press, 2008)
A Plan to Balance the Government Budget that Allows Countercyclical Fiscal Policy,”