Magazine article American Banker

Bet on Gonzalez to Win an Upset Victory When He Challenges the Fed to Reform

Magazine article American Banker

Bet on Gonzalez to Win an Upset Victory When He Challenges the Fed to Reform

Article excerpt

When House Banking Committee Chairman Henry Gonzalez jumps into the ring with the Fed later this year, I'm putting money on the Texas Democrat to score an upset.

As a result, I predict that by the end of 1994, we'll see some substantial changes in the way the Fed does business.

Making Changes

It'll be less like a clandestine old-boys-and-one-girl club and more like a democratic institution.

President Clinton will select and Congress will confirm the 12 presidents of the Federal Reserve district banks, as per the Gonzalez wish list.

The Fed will be forced to keep verbatim minutes of its monetary policy meeting and share them with the public.

Mr. Gonzalez is planning a series of hearings to examine closely the central bank's operations.

He thinks the organization has lost touch with reality - as evidenced by a money policy he believes it still much too tight, despite signs of a recovery.

The guys who pass money around on Capitol Hill claim the San Antonio brawler doesn't have a prayer against the Fed, a perennial hometown favorite.

The MPs (money passers) concede that Mr. Gonzales will score some publicity points, but say he won't win the bout.

In This Corner . . .

Nevertheless, I still place my bet on Mr. Gonzalez, who sees himself as a man on a mission, the last knight from JFK's Camelot, the incorruptible champion of the underdog.

A lifetime in politics has convinced him that most harmful decisions emanate from behind closed doors. He believes it's his duty to kick in those doors.

Most of us learned in the schoolyard that it's tough to win a fight against a zealot, even if you have a longer reach. People with a cause seldom flinch at the sight of their own blood. Mr. Gonzalez is a nonflincher.

Another reason I like him in this fight is because as committee chairman, he writes the rules of engagement, and referees as well. …

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