Fed's Powell slams "misguided" proposals for deeper Fed oversight
Involvement of the Government Accountability Office in particular ``would likely inhibit the debate and flow of information...which would lead to poorer decisions,'' and make it difficult for markets to interpret or anticipate Fed actions, he said.

The central bank's ability to act forcefully helped the country bounce back from the worst economic crisis in a century, Powell said, while some of the issues cited by Fed critics—such as high inflation and financial instability—have failed to materialize.

``The Fed's actions were effective, necessary, appropriate, and very much in keeping with the traditional role of the Fed and other central banks,'' said Powell, an investment banker with strong credentials in Republican financial circles.

Read MoreUS banks: This is putting us at a big disadvantage

His comments are the latest in a Fed effort to push back against ideas that Fed officials fear would represent a dangerous intrusion of politics into U.S. monetary policy.

Though described as a plan to ``audit'' the Fed, the proposals could go much deeper than a review of the central banks books and spending. Rather, Fed officials worry legislation may force the central bank to justify its decisions to Congress and, in some versions, force them to follow a tightly prescribed rule in setting monetary policy.

Central bank officials say it is critical that in setting monetary policy they remain independent from political influence and be allowed to exercise professional judgment.

While the Fed's massive bond purchases and other actions were ``extraordinary,'' Powell said, ``they were taken because the threats posed by the crisis were also without precedent.''

The stakes in the debate over the Fed arguably increased with the Republican victory in November congressional elections, and Fed officials have amped up their rhetoric against a suite of ideas offered by Republicans that would change how the central bank operates.

Last September, a bill that would require a full GAO Office audit of the Fed sailed through the house on a 333-92 vote. Republicans now control both legislative chambers, and Fed transparency is expected to be high on the agenda of new Senate Banking, Housing and Urban Affairs Chair, Richard Shelby.

Republican Senator Rand Paul, a potential 2016 presidential candidate, re-introduced his audit the Fed bill last month.

The Fed is subject to various audits, including reviews of its operations by the GAO. But since 1978, its monetary policy discussions have been legally exempt from GAO oversight.

Fed Chair Janet Yellen last year called an audit of monetary policy a ``grave mistake'' at a congressional hearing. While several Fed regional bank presidents have spoken out against an audit since late last year, Powell is the first Fed governor to specifically address the issue in a speech since the audit movement resurfaced last summer.
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The Fed could be hamstrung in any future crisis if the US deepens its oversight of the central bank, Fed governor Jerome Powell says.
'Of Grunge and Government': Smells Like Civic Spirit
OF GRUNGE AND GOVERNMENT Let's Fix This Broken Democracy! By Krist Novoselic. 103 pp. RDV Books. Paper, $9.95.

KRIST NOVOSELIC'S memoir turned civics manual, "Of Grunge and Government," is lucid, unpretentious and, as the architect Louis Sullivan once described the ideal of democracy, "thrillingly sane." Detailing his path from Nirvana bass player to citizen politico, Novoselic offers specific platforms for electoral reform -- instant runoff voting gets a lot of play -- as well as charming anecdotes about rock 'n' roll as a pursuit of happiness. He is a thinker who asks questions about the efficacy of direct recording electronic voting machines, but also ponders such important mysteries as, "Where would the world be without Black Sabbath?"

Where would the world be without Nirvana? When the band's record "Nevermind" was released in 1991, it caused a rupture that was more than simply stylistic, more than just a group with loud guitars and louder drums knocking the whimpering Mariah Carey off the top of the charts (though that was not nothing). It was a moral victory. For the first time a group that grew up on the inherent decency of the punk rock creed -- "Come as you are" went one of Nirvana's hits -- ruled the airwaves. That was the beauty, the relief, of Nirvana's success. They made "Nevermind." We the audience made it Billboard's No. 1. Novoselic says, "It's as if every album sold was a vote for Nirvana." And a vote for Nirvana was a vote for sarcastic idealism, for skeptical community, for bitter hope, a mosquito, my libido.

The inclusive, egalitarian, often feminist nature of punk, especially the Washington State varieties like riot grrl and grunge, was also an economic system. A band is, Novoselic points out, "a small business." Nirvana, though, became big business. And it is Novoselic's singular perspective, since he straddled the homemade, homegrown punk rock community and the high-stakes, high-priced global marketplace, that gives him the sort of evenhanded insights into the balance between labor and capital, between people and property, that call to mind Theodore Roosevelt. Novoselic is critical enough of capitalism gone amok that he participated in the 1999 demonstrations against the World Trade Organization in Seattle, but sufficiently nonviolent and law-abiding that when he saw a fellow protester defacing a hotel with graffiti he was appalled, hollering, "How would you like it if someone did that to your house?"

Novoselic imagines what would happen "if all of the positive energy and creativity of the W.T.O. protests were channeled into conventional politics." For example, he attends his local Democratic precinct caucus, endorsing its "respectful, straightforward" debate. And his old-fashioned suggestions for civic participation come off as curiously innovative. After confessing that he joined the Grange in the rural Washington town where he now lives, he proposes others follow suit, pointing out that the Elks lodge has the space, bar and stage necessary to convene less-than-Elksy get-togethers. He asks, "How about a poetry slam at the Eagles Hall about media consolidation?"

Novoselic points out that while he would like to amend the elections process, "I am not advocating we change our system of government." His thesis -- that citizens with punk rock hearts can attend the same meetings, lobby the same state legislatures, join the same delegations as their neighbors (and forebears) -- sounds a lot like doing to politics what Nirvana did to the music industry. The band's songs did not destroy commercial radio, and failed to dismantle MTV. Nirvana's songs and videos simply replaced the trivial foolishness that had been corroding the public airwaves.

Just as a good song is broadcast using the same transmitter as a bad song, the folding chairs at a caucus meeting (or the Elks lodge) won't notice, much less care, if the people sitting in them are wearing bow ties or faded souvenir T-shirts from the "Nevermind" tour.
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Sarah Vowell reviews book Of Grunge and Government: Let's Fix This Broken Democracy! by Krist Novoselic; drawing (M)