The Progressive


A project of Common Dreams

For Immediate Release
Contact: Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167

Financial Reform


The Washington Post today features a story headlined "Dodd's reform plan takes aim at the Fed: Curbs on central bank are at odds with administration's vision." Sen. Dodd's proposal would also "merge numerous federal banking regulators under a single roof," McClatchy reports.

Cockburn is co-producer of the new film "American Casino." He said today: "It doesn't much matter if you have one big regulator or six smaller ones when the government is riddled with recent graduates of Goldman Sachs, Citigroup and other banks, who will head straight back to Wall Street when their bout of public service ends."

Cockburn just wrote the piece "Of Bailouts and Swaps: The Crafting of a Loophole," which highlights a provision in the current legislation that could undermine any meaningful regulation of derivatives.

His past pieces on finance include "How Goldman Sachs and Citi Run the Show: The Wall Street White House."

Author of the new book Deception and Abuse at the Fed, Auerbach said today: "The Fed is a very corrupt organization. It claims to be independent, but it is not independent of the banks it regulates -- two-thirds of the directors at each of the 12 Federal Reserve district banks are elected by the banks the Fed regulates. The Inspector General of the Fed is appointed by the Fed which also controls his budget.

"My experience assisting [former Financial Services Committee Chairman Rep.] Henry B. Gonzalez in the investigation of the Fed's 50-plus airplane fleet in the 1990's is that the Fed's Inspector General office was a farce. [The IG] would not even look into the corruption in the Fed's management of the severe problems that were found. The Fedi? 1/2s Inspector General should be a presidential appointment, confirmed by the Senate. The Fed operates in secret and since 1994 is shredding source transcripts records of its policy-making meetings. It was the Fed that allowed Goldman Sachs to go from being an investment bank to having the shelter of becoming a commercial bank, so it has access to the discount window. This was a mistaken move that will help to fuel the next financial crisis."

Professor of public affairs at the University of Texas at Austin, Auerbach was an economist with the House Committee on Financial Services.

An excerpt from his book is available online.

A nationwide consortium, the Institute for Public Accuracy (IPA) represents an unprecedented effort to bring other voices to the mass-media table often dominated by a few major think tanks. IPA works to broaden public discourse in mainstream media, while building communication with alternative media outlets and grassroots activists.