What 'Oversight' Means in Washington

Since last September, the Federal Reserve has increased its balance sheet by more than $1 trillion,
and has engaged in even much larger amounts of off-balance-sheet
transactions. In January of this year, freshman Rep. Alan Grayson repeatedly asked Federal Reserve Vice chairman Donald Kohn
the identity of the companies which had received those loans, only to
be told that the Fed had no obligation and no desire to disclose that
information to Congress. That obviously leads to the question of who
exerts oversight over the Fed and the vast amounts of money it
transfers.

One answer -- the only real answer -- is that the Fed's activities are monitored by an Inspector General, which ostensibly
"conducts independent and objective audits, inspections, evaluations,
investigations, and other reviews related to programs and operations of
the Board of Governors of the Federal Reserve System
(Board)" and "promote[s] integrity, economy, efficiency, and
effectiveness; help prevent and detect fraud, waste, and abuse; and
strengthen accountability to the Congress and the public." At minimum,
then, one would assume that the Fed's Inspector General is actively
monitoring the extraordinary actions in which the Fed has been engaging
since September. After all, nobody else is monitoring or even can
monitor any of that, since the Fed will not tell anyone what it is
doing.

Yesterday, the Fed's Inspector General, Elizabeth Coleman,
appeared before the House Financial Services Committee and was
questioned by Rep. Grayson about her office's oversight duties. Just
watch this five-minute question-and-answer session to get a sense for
the true breadth of decay and corruption in our political and financial
classes and for what a sorry joke the concept of "oversight" is in
Washington:

As the Democrats' second-most-senior Senator, Dick Durbin, said about Congress,
though it applies every bit as much to Washington generally: "the
banks -- hard to believe in a time when we're facing a banking crisis
that many of the banks created -- are still the most powerful lobby on
Capitol Hill. And they frankly own the place."