How The Fed Gained Its Bailout Authority

Washington Post:

On the day before Thanksgiving in 1991, the U.S. Senate voted to vastly expand the emergency powers of the Federal Reserve.

Almost no one noticed.

Read the whole story: Washington Post

Comments

[Lilith33]

One sentence?
stil dont think there was a plan?

[themodernleader]

LunaPark. May I politiely intrude upon your basic proposition. You are right that Keynesian economics is rationalized for wanton reckless finance and leveraged gambling and may justify our governments sole reliance on the printing press to somehow pull us out of a financial, economic collapse caused by unprecedented fraud. (I call if swindle).
John Maynard Keynes was an honorable thinker and a straight shooter. He would never have condoned a government year after year for more than forty years spending more and more of what we don't have. All respectable economists in history condemn the trade deficits that are bringing down this country while our present special interest economists stay silent. It was not the theory but the self-serving interpretation by leaders of anti-democratic forces that is meant to mislead the best of us.

[tippydog11]

All was greed greed greed, lies, stealing, power of the wealthy who ran the show...sto­le from the middle working class...un­just laws put in place..slo­wly over time..game plan...all was greed worship of wealth became their God.......

[Carolab]

"This is a democracy, and there is a problem with too much power going to an entity that is not subject to democratic powers," Frank said.

_________________

Then why has he been saying the Fed should have MORE power?

[themodernleader]

Giving carte blanche authority to spend our currency into the ground has resulted in the most outrageous, self-interest squandering in any nation's history. The trillions Chairman Bernacke has squandered on worthless paper and bailout of his personal friends is the mark of a traitor and madman.
In any other time of American government, he would be stripped of his Office, impeached and tried for treason to the Republic. Senator Richard Durbin appeared shocked when he discovered that the bankers owned the Congress. HE shouldn't have been. Just look at the monies each of them has received from the financial interests. Concentrated power will corrupt a democratic form of governance everytime. Allowing monopolistic banking to be unchained has led to our deadlock , dissention, favor-driven policy and drift as our country crumbles and falls.

[John Baker 4]

Great, another reason to dislike Mr. Dodd. Irresponsible legislation: Open the barn door but leave out reasons to close it.

[LunaPark]

Thanks to Federal Reserve, people who save will be punished through continuous inflation. It surprises me that so many progressive liberals support Keynesian economics embraced by Nixon, Regan, and neocons everywhere. Keynesian policies that devastate the working class and poor while fueling an out of control foreign policy that keeps US troops in 173 countries and supports unnecessary wars killing thousands. Obama is Bush on steroids when it comes to economic policy.

[Christian]

You have not seen that terrible thing called inflation yet have you? And there are many areas of the economy that needs some inflation, especially right now. You're just stuck in your dogma, you need to watch the numbers and facts as they come in and draw conclusions with a pragmatic perspective.

[LunaPark]

Yes, I've seen inflation, every year of my life. Bureau of Labor Statistics says it was 3.84% in 2008. It hit 13% in 1980 and the cumulative since 1982 is 115%. Now, the country has taken on so much debt, they have no other option but to debase the currency further. Yes, the government, who spent trillions on war and banker bailouts, needs inflation to cheapen its debt. I guess you can say that is one area of the economy that needs inflation. If we had a sound money policy, Bush would have had to raise taxes to pay for Iraq. Instead, he can borrow and inflate. AND, I'm pragmatic enough to dump my US dollar based stocks and invest my money overseas.

[SCG]

Those Keynesian policies served us well post WW2, with decades of full employment and a rising standard of living, with real gains in income. The 70's on is another story , but the Friedman approach has certainly been good for Wall St., up until recently. Debt accumulation isn't infinite.

[themodernleader]

The Congress can not delegate its rights and duties to any other organization, including the Federal Reserve. To do so is an act of treason for it destroys the function of legislature. Such acts are gradually making possible a peaceful transistion from representative democracy to dictatorship.
With the coming panics, charlatans will conspire to empower one indispensible leader to receive unrestrained power. Dangerous politicans such as Senator Dodd and Representative Barney Frank will happily write legislative approval to autocratic governance. The next exit will be dictatorship and ruin.
The Congress should immediately rescind the illegal granting of power to the Fed. Then they should have an internal investigation to determine how such treason could have been initiated and carried out with impunity. Last, guilty individuals should be reprimanded or released from their positions which they so ignominiously betrayed.

[Kassandra]

We were too busy watching the video games of the first gulf war.

[SCG]

Figures.

[leftLibertarian]

Capitalism sows the seed of its own destruction.

http://www.ft.com/cms/s/0/c6c5bd36-0c0c-11de-b87d-0000779fd2ac,dwp_uuid=ae1104cc-f82e-11dd-aae8-000077b07658.html?nclick_check=1

[AKaurora]

The Fed is one of the least understood entities in the financial world and is subject to a huge amount of conspiracy theories because of its inherent power and confidentiality clauses. I certainly am one who cannot decipher what I need to know in order to make a valid "judgment" or opinion. I have to admit that my populist roots and leanings make me distrust the entire financial world of banks, Wall Street, the Fed, the Ultra Wealthy, and all of the other hoohah. Instintively, I want to yell "Stop It!" I believe there have been far too many cases of egregious greed, finagling, outright illegalities, and millions of instances where the good of the financial world had NOTHING to do with the good of the country. Yet, I also believe the entire issue is far more complex than I can imagine and would the collapse of it cause far more pain and agony than it does by existing? I wish I had facts to support my antagonism.

[acudoc]

Here is one simple fact to digest: when you or anyone else takes out a loan, whether as an individual or as a representative of a productive enterprise, that money is not borrowed in the traditional sense. The money for the loan is created ex nihilo when you sign the promissory note.

Congress, in its infinite wisdom, gave this power to the American banking cartel in 1913 with the passage of the Federal Reserve Act. A financial elite, managing a cartelized banking structure, is empowered to create new money without offering anything in consideration, collect interest for this bookkeeping act, while you the borrower pledge your collateral, your indentured servitude, your labor, your productive creativity­...and when you default, the banks take over your factories, your homes, your businesses.

The banking cartel rewards legislators handsomely with campaign donations. And the Federal Reserve, charged with maintaining the purchasing power of our currency---what has it accomplished in its 96 years of existence? It has managed to destroy 95% of the purchasing power while helping to grow a federal government to gargantuan proportions.

Strike at the root! Demand a return to honest,100% reserve banking managing the only currency recognized by the Constituti­on----gold and silver. (To those of you who think gold is a barbarous relic, you ain't seen nothing yet of potential barbarity. The grotesque wars of the State of the 20th and 21st Century, enabled and financed by this banking structure, are only a prelude of what is to come.

[Cherubim]

An alternative Plan could have been to:
"First, I will create a Family Savings and Credit Commission to make sure that financial services treat families safely.

Right now, there's no sheriff in town. Interest rates were effectively deregulated 20 years ago. States cannot effectively regulate banks because most are based in other states. Federal regulators put bank "soundness" – profitability – far ahead of consumer protection.

My Family Savings and Credit Commission will change this. It will deal with all financial services -- credit cards, mortgages, car loans, check-cashers, payday loans, investment accounts, and more. It will ban the most abusive terms and make sure consumers understand the others.

Second, I will also pass strong national laws protecting us against the worst abuses in credit markets – predatory mortgages – abusive credit card terms – and payday loans with interest rates of 300 percent or higher.

Finally, I will help create alternatives to abusive lenders. I will help working families build up a cushion by matching their savings and bringing bank accounts to the 56 million without them. And I will support non-profit groups offering affordable, short-term loans. We need a new era of responsible lenders who see families as long-term investments, not quick bucks. "

Watch Excerpts from the speech:
http://www.youtube.com/watch?v=sJlKE_BLAUM&feature=PlayList&p=F2D6FD81E12ECD40&playnext=1&playnext_from=PL&index=5

[mitchieone]

Just in case nobody's seen Zeigeist. I presents a historical perspective on the "Federal Reserve": http://www.youtube.com/watch?v=_dmPchuXIXQ

[dadw5boys]

THE FEDERAL RESERVE OWNS EVERYTHING IN THE END JUST BECAUSE THEY EXIST.

KILL THE FED SAVE THE COUNTRY.

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