Is the Fed Better... as the Devil You Know?

If Dr. Ron Paul is one of few voices of reason in Congress, then Thomas Hoenig may be the Fed’s Ron Paul. As president of the Federal Reserve Bank of Kansas City and voting member of the Federal Open Market Committee, he’s been the lone vote of dissent against the Fed’s ultra low-interest rates –six times.

Here’s how Bloomberg describes Hoening in a recent profile:

“This is Tom Hoenig’s moment, and it’s a strange one. In Washington, he is the burr in Fed Chairman Bernanke’s saddle: the rogue heartland banker who keeps dissenting alone — for the sixth straight time on Sept. 21 — to protest the Fed’s rock- bottom interest-rate policy. Hoenig warns that the Bernanke majority is setting the country up for an as-yet-unknown asset bubble: the next dot-com or subprime craze. He can’t tell yet where the boom-and-bust will materialize, but he can feel it coming, like a Missouri wheat farmer senses in his bones the storm that’s just over the horizon.”

Yet, even with un-Fed-like views — enough so to serve as a Tea Party speaker in the clip below — he articulates well a few points against ending the Fed in a hurry. Here’s a sample of his reasoning…

“I know many of you are very strong supporters of end the fed, and I respect that, the Congress can end up changing it. But, you better have something else in mind. If you have the gold standard in mind, that’s fine, but it’s not going to end crises. And, remember the populist movement was about ending the gold standard, because it was a very strict requirement on debitors who happened to be in agriculture at the time. So, know what it is you want. And, if you’re gonna end the Fed, and you think you’re going to do it, make sure that what you’re going to end up with isn’t a more centralized institution, located in Washington or on Wall Street.”

Check out the actual video of his talk below, which came to our attention via a Daily bail post on Fed President Thomas Hoenig’s speech to the Tea Party on Bernanke’s QE insanity.