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Pluto
Joined: 19 Dec 2006
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 Posted: Wed May 27, 2009 12:34 pm Post subject: |
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^Okay, that makes more sense then.
Anyway, on to more important questions. The Guardian asks:
Waterboard the Fed?
| Dean Baker wrote: |
To my knowledge, no one has proposed waterboarding the US Federal Reserve. But the hostile reaction of much of the country's political leadership to suggestions that the Government Accountability Office (GAO) audit the Federal Reserve Board might lead people to think that waterboarding was being called for.
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The congressional oversight panel, led by Elizabeth Warren, has frequently complained that the Treasury has not always been altogether forthcoming in providing information about its lending practices under the Tarp. However, there is at least a public paper trail. We can find out how much money each bank received and under what terms. |
We know what is going on with the Tarp money, most of it anyway. However...
| Quote: |
By contrast, there is no public paper trail for the Fed's loans, even though it has more than three times as much money outstanding as does the Treasury through the Tarp. The Fed has only provided aggregate information on the amount of loans in each of its various lending programs, and general information on the terms of the loans and the types of collateral received.
However, it is not possible to find out in detail how much money Goldman Sachs borrowed, for example, at what interest rate, and which assets it posted as collateral. The Fed has explicitly refused to make information about specific borrowers public. In fact, the inspector general who has the responsibility for overseeing the Fed told congress that she does not have this information. Apparently the Fed doesn't even trust its inspector general with information on its lending practices.
It is difficult to understand the rationale for this secrecy. There may be times where it is necessary for America's central bank to lend money to a bank without immediately making the information public in order to avoid a panic. However, it is difficult to understand why this information cannot be made available weeks or even months later. After all, this money does not belong to the Fed � it belongs to us.
The proposal for a GAO audit of the Fed is a first step towards reasserting democratic control over this institution. In many respects, the Fed has more direct control over the direction of the economy than the president or congress, yet it carries through its actions largely outside of the public's view.
Furthermore, it is structured so that the banks have a hugely disproportionate influence over the Fed's actions. The Fed's 12 district bank presidents are appointed through a process dominated by the banks within each district. These 12 presidents sit on the Federal Open Market Committee (FOMC), the Fed's key decision-making body on monetary policy, far outnumbering the seven governors who are appointed through the democratic process. (Only five of the 12 bank presidents are voting members of the FOMC. The president of the New York Fed is always a voting member. The other 4 voting positions rotate among the other 11 districts.)
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The Fed bears primary responsibility for the economic collapse. Alan Greenspan failed to take any steps to rein in the housing bubble and arguably even promoted it. It was inevitable that the collapse of an $8tn bubble would lead to a serious downturn of the sort that we are now seeing.
This incredible failure of the Fed should raise fundamental questions about its structure. Certainly it would be a positive step if the Fed were more answerable to democratically-elected officials and less accountable to Wall Street bankers. A GAO audit would be a big step in the right direction. |
Well, should we waterboard the Fed?
Fed Transparency Update |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Wed May 27, 2009 1:00 pm Post subject: |
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| A few years back an article that made those claims (Fed is not transparent, captured by bankers, secretive) would likely have been laughed at. The author called names (gold bug, perma bear, conspiracy theorist etc). Now, it is mainstream. |
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mole
Joined: 06 Feb 2003
Location: Act III
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| Posted: Wed May 27, 2009 4:21 pm Post subject: |
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| mises wrote: |
| A few years back an article that made those claims (Fed is not transparent, captured by bankers, secretive) would likely have been laughed at. The author called names (gold bug, perma bear, conspiracy theorist etc). Now, it is mainstream. |
The Awakening is slow and tedious, but progressing.
I'm only on Chapter 4, but isn't The Creature from Jekyll Island, G. Edward Griffin, an appropriate read for the lost sheeple?
Others I've read upon my Awakening:
Crash Proof, Peter D. Schiff subtitled:How to Profit from the Coming Economic Collapse, which is obviously just an eye catcher.
It's really an easy to read [hey, even *I* got it] explanation, or at the time of its writing, prediction, of how we got where we are now.
Financial Armageddon, Michael J. Panzner eh. Someone smarter than me should comment. I found it lacking in coherency and organization, though not in content.
Meltdown. I don't have it in front of me, but very current, interesting and seems straightforward and factual. |
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bacasper
Joined: 26 Mar 2007
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| Posted: Wed May 27, 2009 9:42 pm Post subject: |
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| The Guardian wrote: |
| Certainly it would be a positive step if the Fed were more answerable to democratically-elected officials and less accountable to Wall Street bankers. A GAO audit would be a big step in the right direction. |
Why should a group of private bankers be subject to democratic oversight? Better questions are "Why were they given in 1913 this monopoly franchise to lend money to the government and collect billions in interest on it in the first place?" and "Why don't we end it now?" |
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bacasper
Joined: 26 Mar 2007
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| Posted: Thu Jun 04, 2009 10:12 pm Post subject: |
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| Up to 186 now, or 40% of the House. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Fri Jun 05, 2009 7:22 am Post subject: |
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| bacasper wrote: |
| Up to 186 now, or 40% of the House. |
That's quite a lot. But I seriously doubt Summers, Bernanke et al will roll over even if 100% demanded open books. |
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bacasper
Joined: 26 Mar 2007
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| Posted: Fri Jun 05, 2009 7:28 am Post subject: |
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| mises wrote: |
| bacasper wrote: |
| Up to 186 now, or 40% of the House. |
That's quite a lot. But I seriously doubt Summers, Bernanke et al will roll over even if 100% demanded open books. |
Of course, when applied to officials, they aren't really "laws," but "suggestions." |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Fri Jun 05, 2009 10:15 am Post subject: |
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http://www.nakedcapitalism.com/2009/06/fed-hires-former-enron-lobbyist-to.html
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Fed Hires Former Enron Lobbyist to Burnish Its Image
This development, that the Federal Reserve has hired one Linda Robertson, former Enron lobbyist and Summers/Rubin protege, to manage relations with the Hill, strikes me as a tacit admission that the Fed thinks it has an Enron scale problem brewing....
From Bloomberg (hat tip reader Matt S):
The Federal Reserve intends to hire a veteran lobbyist as it seeks to counter skepticism in Congress about the central bank�s growing power over the U.S. financial system, people familiar with the matter said.
Linda Robertson currently handles government, community and public affairs at Johns Hopkins University in Baltimore, and headed the Washington lobbying office of Enron Corp., the energy trading company that collapsed in 2002 after an accounting scandal. She was also an adviser to all three of the Clinton administration�s Treasury secretaries.
Robertson would help the Fed manage relations with lawmakers seeking greater oversight of a central bank that has used emergency powers to prevent Wall Street�s demise. While she wasn�t tied to Enron�s fraud, her association with the firm may raise questions, analysts said.
�Some members of Congress think there are votes in attacking the Fed� after it �unnecessarily and unwisely entangled monetary policy with fiscal policy,� said former St. Louis Fed President William Poole. �The Fed is going to have a tricky time of unwinding what has been done� and will need to �keep in touch with members of Congress more thoroughly,� said Poole.
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Wow, did you catch Poole's spin? No, it isn't that the Fed is acting as Willem Buiter, who has no votes to garner, put it, as a "quasi fiscal agent of the Treasury," is engaging in shameless regulatory arbitrage and is taking measures "highly undesirable" for a democratic from of government. No, Poole goes to straight ad hominem attack because the facts are not favorable to the Fed. |
This is pretty bizarre stuff. |
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bacasper
Joined: 26 Mar 2007
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| Posted: Sat Jun 06, 2009 12:06 am Post subject: |
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| mises wrote: |
http://www.nakedcapitalism.com/2009/06/fed-hires-former-enron-lobbyist-to.html
| Quote: |
Fed Hires Former Enron Lobbyist to Burnish Its Image
This development, that the Federal Reserve has hired one Linda Robertson, former Enron lobbyist and Summers/Rubin protege, to manage relations with the Hill, strikes me as a tacit admission that the Fed thinks it has an Enron scale problem brewing....
From Bloomberg (hat tip reader Matt S):
The Federal Reserve intends to hire a veteran lobbyist as it seeks to counter skepticism in Congress about the central bank�s growing power over the U.S. financial system, people familiar with the matter said.
Linda Robertson currently handles government, community and public affairs at Johns Hopkins University in Baltimore, and headed the Washington lobbying office of Enron Corp., the energy trading company that collapsed in 2002 after an accounting scandal. She was also an adviser to all three of the Clinton administration�s Treasury secretaries.
Robertson would help the Fed manage relations with lawmakers seeking greater oversight of a central bank that has used emergency powers to prevent Wall Street�s demise. While she wasn�t tied to Enron�s fraud, her association with the firm may raise questions, analysts said.
�Some members of Congress think there are votes in attacking the Fed� after it �unnecessarily and unwisely entangled monetary policy with fiscal policy,� said former St. Louis Fed President William Poole. �The Fed is going to have a tricky time of unwinding what has been done� and will need to �keep in touch with members of Congress more thoroughly,� said Poole.
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Wow, did you catch Poole's spin? No, it isn't that the Fed is acting as Willem Buiter, who has no votes to garner, put it, as a "quasi fiscal agent of the Treasury," is engaging in shameless regulatory arbitrage and is taking measures "highly undesirable" for a democratic from of government. No, Poole goes to straight ad hominem attack because the facts are not favorable to the Fed. |
This is pretty bizarre stuff. |
Besides the usual revolving door between the banksters, government, and lobbyists, can you break it down for us a bit more? |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Jun 09, 2009 3:47 pm Post subject: |
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Readers curious to know how the Fed transparency petition is progressing will be happy to know that Ron Paul's HR 1207 proposed bill, "The Federal Reserve Transparency Act" now has 206 co-sponsors. Alan Grayson's democratic canvassing for bill support has proven quite successful. A mere 2 weeks ago there was just 165 cosponsors, mostly republicans.
After today's Federal Reserve subpoena it is only a matter of days before the 12 additional sufficient and necessary cosponsors for the bill appear. |
http://zerohedge.blogspot.com/2009/06/fed-transparency-petition-update.html
Summers, Timmy and rank will block this.
Also:
http://georgewashington2.blogspot.com/2009/06/federal-reserve-subpoenaed-by-congress.html
| Quote: |
The Wall Street Journal writes:
U.S. House lawmakers on Tuesday said they would file a subpoena to compel the Federal Reserve to turn over internal notes and emails detailing the central bank's role in encouraging Bank of America Corp. to complete its acquisition of Merrill Lynch & Co...
Lawmakers have been examining testimony given by [Bank of America CEO Ken] Lewis to New York Attorney General Andrew Cuomo in which he suggested top Fed and Treasury officials pressured him to complete the deal for Merrill Lynch despite ballooning losses at the securities firm.
Here's background on Lewis' allegations that the Fed forced B of A to buy Merill.
The most interesting part of this will be whether or not the Fed complies with the subpoena. Previously, the Fed has refused to respond to requests for information from Congress.
For example, the following exchange occurred between Fed Chairman Ben Bernanke and Senator Bernie Senators:
Senator Sanders: "Will you tell the American people to whom you lent $2.2 trillion of their dollars?"
Chairman Bernanke: "No"
Similarly, Fed Vice Chair Donald Kohn refused to answer congressman Alan Grayson's questions about where the trillions in bailout money are going.
And Congressman Grayson wrote in a letter co-signed by several prominent economists:
The Federal Reserve has refused multiple inquiries from both the House and the Senate to disclose who is receiving trillions of dollars from the central banking system. The Federal Reserve has redacted the central terms of the no-bid contracts it has issued to Wall Street firms like Blackrock and PIMCO, without disclosure required of the Treasury, and is participating in new and exotic programs like the trillion-dollar TALF to leverage the Treasury�s balance sheet. With discussions of allocating even more power to the Federal Reserve as the �systemic risk regulator� of the credit markets, more oversight over the central bank�s operations is clearly necessary.
The Fed has previously refused to respond to Freedom of Information Act requests by Bloomberg by arguing that:
While the Fed�s Washington-based Board of Governors is a federal agency subject to the Freedom of Information Act and other government rules, the New York Fed and other regional banks maintain they are separate institutions, owned by their member banks, and not subject to federal restrictions.
It will be interesting to see whether the Fed complies with the subpoena, and if not, whether the refusal is based on the limited scope of oversight provided by the Federal Reserve Act or on some other insane creative argument. |
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bacasper
Joined: 26 Mar 2007
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| Posted: Tue Jun 09, 2009 6:18 pm Post subject: |
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| I hold all these lawmakers who voted to give away all of our money without first requiring disclosure just as culpable. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Wed Jun 10, 2009 7:41 am Post subject: |
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http://zerohedge.blogspot.com/2009/06/jim-grant-fed-would-be-shut-down-if-it.html
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"If the Fed examiners were set upon the Fed's own documents�unlabeled documents�to pass judgment on the Fed's capacity to survive the difficulties it faces in credit, it would shut this institution down."
"The Fed is undercapitalized in the same way that Citicorp is undercapitalized."
"I think zero is the wrong rate for almost any economy."
"So great is the slack in the economy that it will be years before there is anything like a murmur from the inflation front."
"15 out of 16 primary government bond dealers are in agreement that the Fed will not move before the year end."
"There are no bad bonds, just bad prices. Treasuries at 2% were a toxic asset."
"Citibank is a rogue bank." |
Video in the link. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Thu Jun 11, 2009 7:16 pm Post subject: |
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Washington, D.C. - Congressman Ron Paul's Federal Reserve Transparency Act, HR 1207, has reached and surpassed the level of 218 cosponsors in the House of Representatives, which means it is now cosponsored by a majority of the members.
The 218th cosponsor was Dennis Kucinich (OH-10), and the bill has since received its 222nd cosponsor.
�The tremendous grass-roots and bipartisan support in Congress for HR 1207 is an indicator of how mainstream America is fed up with Fed secrecy,� said Congressman Paul. �I look forward to this issue receiving greater public exposure.�
Hearings on Federal Reserve transparency are expected within the next month, as part of the Financial Services Committee's series of hearings on regulatory reform. |
http://www.house.gov/apps/list/press/tx14_paul/audit.shtml
Will be interesting to see how they dodge this. |
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Beeyee
Joined: 29 May 2007
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| Posted: Fri Jun 12, 2009 5:57 pm Post subject: |
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| mises wrote: |
| Quote: |
Washington, D.C. - Congressman Ron Paul's Federal Reserve Transparency Act, HR 1207, has reached and surpassed the level of 218 cosponsors in the House of Representatives, which means it is now cosponsored by a majority of the members.
The 218th cosponsor was Dennis Kucinich (OH-10), and the bill has since received its 222nd cosponsor.
�The tremendous grass-roots and bipartisan support in Congress for HR 1207 is an indicator of how mainstream America is fed up with Fed secrecy,� said Congressman Paul. �I look forward to this issue receiving greater public exposure.�
Hearings on Federal Reserve transparency are expected within the next month, as part of the Financial Services Committee's series of hearings on regulatory reform. |
http://www.house.gov/apps/list/press/tx14_paul/audit.shtml
Will be interesting to see how they dodge this. |
Fantastic news. It will be very interesting to see who opposes this in a debate. |
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arjuna
Joined: 31 Mar 2007
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