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Unwashed Masses 1, Fed 0: Sanders Scores
The effort to audit the Fed got a big boost last night when Senator Bernie Sanders reached an agreement with Chris Dodd, the chair of the banking committee. Under the deal, the Government Accountability Office (GAO) would undertake a full audit of the special facilities created by the Fed since December of 2007. GAO would make the findings from its audit available to the Congressional leadership. It would also make most of the details of the Fed's transactions available to the public.
To cope with the economic crisis, the Fed created 13 different special lending facilities. At their peak last year, these facilities had lent out more than $2 trillion. The Fed has only disclosed aggregate data about these facilities, telling us how much each one lent out month by month. It has refused to disclose any information about the specific loans and beneficiaries. This means that we have no way of knowing how much Citigroup, Goldman Sachs or anyone else benefited from these facilities.
Under the terms of the deal, by December 1 of this year the Fed will
have posted on its website all the loans that were part of these
facilities. Any interested journalist, academic, blogger or generic
snoop can read through the data and find exactly how much money Goldman
Sachs got, at what interest rate, with what collateral and when they
paid it back. This is a big victory.
The Fed had previously argued that disclosing this information would compromise its independence. It complained that the having their borrowings made public would put a stigma on dealing with the Fed, so that banks and other financial companies would be reluctant to use special lending facilities in future crises.
Of course these arguments made no sense. This is why a majority of senators stood behind Sanders and why the House of Representatives attached an audit bill sponsored by representatives Ron Paul and Alan Grayson to its financial reform bill. The basic point is simple: this is our money; we have a right to know what the Fed did with it.
Sanders did make some compromises. The audit has an arbitrary cutoff date of December 2007. The special facilities date from the summer of 2007. It also only has the audit as a one-off proposition, rather than establishing GAO audits of Fed operations as an ongoing principle. The compromise also explicitly exempts open market operations - the Fed's daily buying and selling of short-term assets to control interest rates - from GAO scrutiny.
These concessions are unfortunate, the Fed is a creation of Congress
and for that reason it should be subject to the same investigative
procedures as any other federal agency, but they certainly are
secondary compared with getting a full accounting of the money lent out
through the special facilities. It is also important to note that in
one very important way the Sanders compromise goes beyond the original
Paul-Grayson language. Under the compromise, the information about the
lending facilities will be made fully public where everyone can
scrutinize it. The original bill would just have this information made
available to the relevant congressional committees. They would then
have to make a further decision about what information, if any, would
be made public.
There has been a long ongoing battle with the Fed over its policy of
excessive secrecy. Over the years, Congress has pushed back at efforts
to treat the Fed as a holy temple outside of democratic control. It has
made progress at holding the Fed accountable through measures like
requiring the semi-annual Humphrey-Hawkins testimony by the Fed chair
before Congress, the release of full transcripts of Fed open market
meetings (with a 5-year lag), and now this public audit of its special
facilities. There will be further battles and we have a long way to go
before the Fed is as democratically accountable as it should be, but
the Sanders compromise is a big step forward.
Comments
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50 Comments so far
Show AllBull! It's a watered-down POS thanks to Sanders, and FDL's Jane Hamsher has a great post on the issue. Baker sounds like an Obama PR man.
"Ron Paul Says Bernie Sanders 'Switched and Watered Down' Audit the Fed"
http://firedoglake.com/
"Unwashed Masses 1, Fed 0," my a**. Ask people who worked their tails off with Sanders how happy they are right now.
Thanks for posting! This morning, I read the article at FDL after reading your comment.
Thank you!
excellent parry and thrust...
point!
Don't see any parry and thrust here. The professor did not explain his pique with Sanders so it's more a stab in the back.
Thank you, Visiting Professor.
Just yesterday I wrote to the editors of CD about "use this space for more thoughtful and worthwhile contributions". I agree that Dean Baker never offers anything with thought or insight.
Lily
I would be curious as to what politicians, economists, or blogs you might suggest as an alternative, thanks.
"If you are not part of the solution, you are part of the problem."
Yes. It's quite noticeable, isn't it.
When, in the context of the notorious "Health Legislation Debate", I remarked on this site that Bernie Sanders was neither a socialist not even a progressive the Sanders crowd was all over me. Well, well, well, how the times have changed. It seems to be safe now to say out aloud: "Bernie Sanders is not a Socialist and he is not a progressive either; he is just another politician who likes his job more than anything else".
Safe to say it out loud? You see yourself as victim? Can't buy that. It's the lonely few at this site who can find anything of value in a Congressional leader (like Sanders) who compromises to get a bill passed. Most folks here get to enjoy the benefits of not being in power--never having to answer to anyone, never having to explain failure, never having to meet opponents half-way in order to get something done. When things go bad, they have the ever-present option of saying, "I told you so," while if things go well---oh, that outcome is seldom recognized, so it is ignored. For all the labored rationality of many posters, there is really not much critical thinking going on. But keep it up--the posts are sometimes informative and often amusing.
Oh, dear, a pragmatist rears his head amongst the unicorns.
It is one thing to compromise but conceding to ill will is crossing the line. No Greg and Drosera, that is NOT practical but cowardly.
Where did I say that there was "no value" in anything Senator Sanders did? Why do you assign statements to me that I have never made? Is it because your fantasy is stronger than my opinion? All I said was that Sanders, in my opinion, was neither a Socialist nor a progressive in the "Health Bill Struggle". Today I would say "Sanders is not a Socialist and barely a Social Democrat".
The minute Sanders gave up his fight for single payer in the Senate was the minute it was safe to say aloud what you said. I got to hand it to you though. He proved you right and us wrong. One advice I have for you. Don't give up your self-confidence when you know that you are indeed telling the truth, painful as can be. It was always safe to tell the truth about Sanders but never safe to lie to oneself praising him out of fear.
Nationalize the Fed!
I took "unwashed masses" as a humorous reference to the public (those outside the Bubble), but then I noticed the term "generic snoop" in "Any interested journalist, academic, blogger or generic snoop..."
In a time when it's crucial for regular, 'ordinary' people to inform themselves about national and world affairs, it's revealing when those inside (or hanging about the periphery of) the Bubble let traces of their dislike creep into their writing at the same time they are condescending to explain to us when to be grateful, to whom and for what.
"In a time when it's crucial for regular, 'ordinary' people to inform themselves about national and world affairs, it's revealing when those inside (or hanging about the periphery of) the Bubble let traces of their dislike creep into their writing at the same time they are condescending to explain to us when to be grateful, to whom and for what." -- dus7
I agree with you! Not long ago, I watched Matt Lauer interview Simon Johnson (a clip on a progressive site), and during the interview, when Mr. Lauer used the phrase, "working-stiff on Main Street," I cringed. His tone of voice caused me to shudder, and I distinctly felt the disdain. On the other hand, I did NOT pick up any disdain from Simon Johnson.
Maybe the masses are unwashed because they aren't covered in filth like this biased writer.
This is not auditing the Fed. Sanders is a political coward. The Paul/Grayson legislation passed in the house goes to the senate to be lickspittled by all the king's men.
The Fed is our federal government. Fascism is its cranking dynamo.
"The Fed is our federal government."
No, it isn't. It is private and it is independant of our democracy, well what is called a democracy. Neither is justified. Why exclude open market operations? What justification can be given? Why not include the summer of 2007? In Washington, time and time again, a "comprimise" is the half way point between doing what is right and doing what elites who have benefited off of policies want. It has nothing to do with justice, fairness, or anything else.
They had better hurry while everyone's life savings and retirement is still worth something.
These gangsters are robbing the American people (and the rest of the world) blind.
Trust no one! Bury your money! Know one thing only: THEY are coming to get you!
"Just because I'm paranoid, doesn't mean they're not out to get me..."
Need a laugh?
Listen to this analyst go berserk as he watches the stock market fall off a cliff.
Google "Tech Trader Goes Bonkers" and you'll easily find it at Yahoo Finance.
(The URL is too long to copy and paste here)
'I told you! I told you!' That has to be the number one statement of any market trader. After its too late to do anything about it, they'll always find a way to salvage their egos.
This appears to be just another type of green washing. Why are we kept from knowing just how much tax payer money is used to prop up the stock market and therefore create welfare profits for investors? It's capitalism for the working man only, and fascism for the rich. It's all bad ! Sanders sucks too.
"...because they couldn't print up their counterfeit phony funny money out of nothing any more..." Jesus, do a little research before posting such silliness.
In support of the point made by several commenters, "Democracy Now"'s headline report is markedly less glowing than Baker's unfortunate "half-full" spin:
_____________________________
Sen. Sanders Withdraws Fed Oversight Measure*
Another amendment to increase Congresional [sic] oversight of the Federal Reserve also failed Thursday following pressure from the White House. Independent Senator Bernie Sanders had proposed to subject the Fed’s interest-rate decision-making to a congressional audit. But after Obama administration officials intervened, Sanders agreed to a compromise that will require the Fed to provide more details about its lending during the financial crisis and subject it to a one-time audit and review.
* http://www.democracynow.org/2010/5/7/headlines#4
_____________________________
After Sanders reneged and/or choked on his impassioned vow to present a single-payer health care bill for a vote last December, it was disclosed that his grateful colleagues arranged a reward of funding for a state clinic project he supported.
So I guess he'll get a little sumpin'-sumpin' out of this performance too.
I just watched a video from Ron Paul, the author of the House Fed Audit Bill. He explained how Senator Sanders watered down the Senate Bill so much that it makes it impossible for the American people to find out what the Fed is doing. According to Representative Paul, Senator Sanders has made sure there will be no audit of the Fed.
Sanders is seeking to audit the Fed only for the recent bailouts. Ron Paul, libertarian weirdo, seeks to end the Fed. Sure, ending the Fed could lead to some good things, it could also lead to some very bad stuff. Looking at the Fed's history, they hit a couple of nasty patches in their near century of existence. Prior to that, problems seemed to occur with greater frequency. I'm all for common dreams, not libertarian wet dreams.
Oh, stop it with the "libertarian weirdo" crap. It's getting old, considering the narcissistic motivational speaker we've got running the country right now. Go watch the video.
Thank you.
Ron Paul is a Randian baboon. You should be careful who you crawl in bed with. You'll find yourself with a nasty case of fleas and crabs. Paul doesn't want to dismantle the Fed because he wants the government to run the monetary system in this country. He wants to fully privatize the monetary system and go back to the good old days of the gold standard when robber barons at least tried to disguise their criminality. The height of American critical thinking is on display when people side with someone just because he wants to end the Fed. It doesn't matter what the replacement is.
The reality is, the Fed is run by private banking concerns. Our monetary system is the interstate highway system of banking and finance. We should privatize our interstate highway system and see how that works. Toll roads every five miles. The Fed needs to be abolished and replaced with a government controlled monetary system. We would be wise to nationalize all banking, investment, insurance and energy industries. What does Paul propose? A gold standard run by robber barons? Gold standards, horses and buggies, kings and queens. Ah, the good old days.
Ron Paul may be a controversial Libertarian Republican and I would probably support almost any decent Democrat over him such as Kucinich aside from that awful vote on the health care regressive scam but it's a shame that most Democrats have sunk so low to the point of making Ron Paul look "progressive". I certainly disapprove of Paul's efforts to privatize the monetary system, give more tax cuts to the wealthy, restrict personal bankruptcies, outlaw women's reproductive rights via a Constitutional amendment, go gung ho on socializing guns and violence, and some of his controversial positions on the issue of race. However, I applaud him for continuing to stand up to the wars, saying no to bailing out the wealthy and corporates, ending the corrupt Fed which is keeping the public in the dark about the ever growing debt crisis, ending the war on drugs, repealing FISA and Patriot Act, and generally voting on trying to restore our civil liberties and freedoms. It's a shame that very few Democrats even want to try that out.
If I remember corectly, Sen. Sanders caved on the health care bill. All this nonsense about opening the Federal Reserve to meaninful scrutiny is simply window dressing.
Sanders and the rest of the posers in Congress will cave on this issue as well.
It's past time to clean out the sell-out whores in Congress and The White House.
Way I see it, the federal reserve was shuttled through congress on the day before xmas in 1913 when the vast majority of both house and senate had left for the xmas vacation leaving a few members to run the bill through so woodie the woodpecker woodrow wilson would sign it into law creating the federal reserve as stipulated requirement for his being given the presidency.
All was secret, from the time the few big bankers snuck down to jekyl island ga. to write the bill and how it was that just enough members of congress remained in washingtion, after the majority had left for the xmas vacation, to pass the bill and send it to woodie wilson. Totally inappropriate shenanigans in the halls of what was OUR congress. In short this created the PRIVATE CENTRAL BANK that the founding fathers of this country fought hard to prevent.
*********************************************
""""It is generally believed that the outline to the Plan had been formulated in a secret meeting on Jekyl Island in November of 1910 in which Aldrich and other well connected financiers attended.[3]
Since the Aldrich Plan essentially gave full control of this system to private bankers, there was strong opposition to it from rural and western states because of fears that it would become a tool of certain rich and powerful financiers in New York City, referred to as the "Money Trust."[4] Indeed, from May 1912 through January 1913 the Pujo Committee, a subcommittee of the House Committee on Banking and Currency, held investigative hearings on the alleged Money Trust and its interlocking directorates. These hearings were chaired by Rep. Arsene Pujo, a Democractic representative from Louisiana.[5]
In the election of 1912, the populist-leaning Democratic Party won control of the White House and both chambers of Congress and that year's party platform stated strong opposition "to the so called Aldrich bill for the establishment of a central bank." However, the platform also called for a systematic revision of banking laws in ways that would provide relief from financial panics, unemployment, and business depression and protect the public from the "domination by what is known as the Money Trust."[6]"""""
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Here is the link to the page:
http://en.wikipedia.org/wiki/Federal_Reserve_Act
And next to the big businesses getting judicial declaration of giving those corporate businesses the protection under the bill of rights in the late 1880s, this was the next part in the power grab of taking control of the american economy.
The Federal Reserve
It's not federal and
they have no reserves
Sanders was clearly threatened with a vetoe. Until citizens wake up and elect some real progressives this is as good as you're gonna get.
As for the anti-Baker sentiments here, he's clearly supported Pauls attempts to audit the fed and I suggest you check-out the wealth of analysis at cepr.
The failure of the left has been our economic illiteracy, no one trusts greens with economic policy.
Visit michael-hudson.com and spread the word.
"no one trusts greens with economic policy."
Crack heads could do better than what we have.
They have lesser wants.
Cicero: "Freedom is participation in power."
Audit the Fed! Audit the Fed! Me likey! Audit the Fed! I'll believe it when I see it happening but I love to imagine it anyway.
Bravo to Bernie Sanders and by all means let's audit the Fed, not once but frequently and publicly.
Let us also keep perspective. We call the masses unwashed, but it's the following that does not pass the sniff test:
"Of course these arguments made no sense. This is why a majority of senators stood behind Sanders and why the House of Representatives attached an audit bill sponsored by representatives Ron Paul and Alan Grayson to its financial reform bill. The basic point is simple: this is our money; we have a right to know what the Fed did with it."
OK, the arguments to hide the Fed's operation made no sense. Check.
The senators stood by Saunders because they stand to gain power. The Fed is almost as far outside of their control as it is over popular control. To have it controlled by elected representatives is better than to have it controlled by parasitic gastro-tentacular octopi* is an improvement. But that is no reason to accuse the United States Senate of populism or democratic sentiment.
They do not mean that the money is yours or mine, only that you and I are expected to replace it.
.
.
* (Ill-known and ill-definable entities sharing pedigree with Goldman Sachs.)
One more cave in by the putative socialist independent. Time to retire, Bernie, you've already lost you dignity.
"Of course these arguments made no sense. This is why a majority of senators stood behind Sanders"
The author is depicting an event when one set of elites talk jive and another set doesn't buy it.
The people believe the second set is standing for the public interest when in fact it is standing against the public interest in that its real concern is the long-term viability of the elite oppression/exploitation rackets.
Perhaps I missed it, and it's off subject, but Ron Paul is in favor of legalizing all drugs! What better way to deal with the incredible violence in Mexico, now spilling into the US?
I'll take my chances with gold standard robber barons over the DEA anytime.
Have any other politicians in power adopted this stand? Former New Mexico governor Gary Johnson has. Where's Bernie on this one?
What kind of unethical horse trading is this? The responsible parties should be investigated - no buts, no ifs. If there is nothing to hide why should they object? Since when do criminals have the right to set the conditions? Just a big show to keep the unwashed quiet.
"The basic point is simple: this is our money; we have a right to know what the Fed did with it."
Ya think?
Let's make it perfectly clear that the majority of the top 1% of "so-called" earners that now own 70% of all assets are mostly bankers. Those stats should give us a pretty good clue how the Federal Reserve operates its privately-owned business with taxpayers' money!