This, from today's Wall Street Journal's opinion page, caught my eye:
Paul Pillar, another former CIA analyst well known for opposing Mr. Bush while he was at Langley... recently wrote in Foreign Affairs that the intelligence community should be treated like the Federal Reserve and have independent political status. In other words, the intelligence community should be a sort of clerisy accountable to no one.
Geez. Was it really necessary to drag the Fed into this? I have no dog in the fight over the appropriate responsibilities of the intelligence community in relation to the executive branch (or at least none I'm willing to unleash on this weblog). But on that Fed thing, let me just note that being independent is not the same thing as being unaccountable. Here's a little help on the issue, from B.W. Fraser, former Governor of the Reserve Bank of Australia:
‘Independence’ in this context means the freedom of central banks to pursue monetary policies which are not dictated by political considerations. It does not preclude Ministers from commenting on monetary policies, and it does not preclude central banks from consulting with the government on monetary and other policies.
On accountability:
In general, central banks should be accountable for achieving the goals specified for them in their charters, and they should be accountable to the parliament, as representatives of the public. Other bodies – such as the media and the financial markets – will also take it upon themselves to pass judgments upon monetary policy; they are entitled to do that...
Central banks should be accountable in terms of their charters, but they can express their accountability in different ways. In New Zealand, the Governor reports on progress in achieving the government’s very specific inflation target. In the United States, the Chairman of the Federal Reserve is obliged by the Humphrey-Hawkins Act to testify before Congress several times a year. In the United Kingdom, the Bank of England now publishes a Quarterly Inflation Report as part of its endeavours to be more accountable
In Australia, the Reserve Bank engages in the usual practices of regular public speeches, quarterly articles and annual reports, and testimony before parliament. In addition, and unlike some other central banks, it issues relatively detailed press statements at the time of each change in interest rates, both to announce the change and to explain the reasons for it. This serves to increase the transparency of the monetary policy process and helps to avoid confusion in the market place. More generally, by reducing the mystique surrounding the process and clarifying the central bank’s role in it, this transparency serves not only to increase accountability but also independence.
That was written in 1994, and some things have changed since -- the creation of the ECB, institutional changes in the Bank of England, the introduction of new legislation in the United States to take the place of the expired Humphrey-Hawkins legislation, to name a few. But all of those changes are yet more examples of Fraser's central point that independence and accountability are not incompatible. Quite the opposite -- the latter is a precondition for the former:
If central banks are to be independent of the government, then they must be accountable for their actions. Not only is this proper in a well run society, but public accountability can help to preserve the independence of central banks.