238 Members of Congress Disagree with Obama: The Fed Needs More Accountability

At a time when many are questioning President Obama's commitment to transparency, he has announced that he wants to give more power to oversee systemic risk in the economy to the very non-transparent Federal Reserve:

Obama, in an interview shown on the CBS Early Show, said the administration wants an overseer that "is accountable and clear when it comes to these large systemic firms that could potentially bring down the entire financial system. The Fed has the expertise and the credibility I think to do it."

Asked whether lapses by the Fed contributed to last year's crisis, Obama said, "It wasn't the Fed where regulations broke down here."

But a majority of Congress disagrees that the Fed is "accountable and clear," and there are now 237 bipartisan cosponsors of Ron Paul's H.R. 1207, the Federal Reserve Transparency Act, which would give the GAO the authority to audit the Fed and report its findings to Congress.

Many grew concerned when Federal Reserve Inspector General Elizabeth Coleman testified before Congress and could not say which banks had received trillion dollars in Fed lending, what losses the Fed had suffered on its $2 trillion portfolio, did not know that the Fed engages in trillions of dollars in off-balance-sheet commitments, and had no plans to investigate role of the Fed in allowing the collapse of Lehman Brothers.

The video of her appearance has been viewed on YouTube over 820,000 times:

As Rep. Alan Grayson said in a letter to his colleagues, asking them to cosponsor the bill:

[T]he 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.

As a result of Grayson's efforts to whip cosponsors, 47 have signed on in the past two weeks alone, including Donna Edwards, Carol Shea-Porter, Jackie Speier, Dennis Kucinich, Heath Shuler, Jim McGovern and Jared Polis.

Grayson's efforts to bring accountability to the Fed have also been endorsed by 5780 people including Dean Baker, Naomi Klein, Bill Greider, Tyler Durden, Bill Black and Jamie Galbraith.

Barney Frank, Chairman of the House Financial Services Committee, has promised that there will be hearings on the Federal Reserve Transparency Act before the August recess.

Before the government hands over even more power to an entity that has refused to account for the trillions of dollars that have gone to bail out the financial system, the public deserves to know that the Fed will in fact be "accountable and clear."

Jane Hamsher blogs at firedoglake

 

Follow Jane Hamsher on Twitter: www.twitter.com/janehamsher

Comments

[RTIII]

Dear Jane,

I disagree: The Fed needs to be either NATIONALIZED or DISBANDED.

Respectfully,
RTIII
.

[LeLoup]

It is doubtful the Fed will yield to calls for accountability. There are too many things they want to keep away from the public eyes.

http://www.marketskeptics.com/2009/06/still-researching-corruption-at.html

[nomobull]

THEN LET THEM DO THEIR JOBS AND MAKE SURE IT HAPPENS.

[Deborah Calvert]

The Feds and State gov'ts disappointed me when Sun Healthcare's Group Inc killed my mother Evelyn Calvert with known broken equipment SUN refused to repair while under a Calif state injunction. My mother could not swallow after a stroke SUN caused, then she developed MRSA with an already compromised system and died slowly over months. A horrific death. Then SUN cheated me out of compensation when CEO passed on messaged to my attorney in mediation that if I pursued a jury trial and exposed CEO's knowledge I'd be harmed, and this after having a major surgery. When I regained my strenght I sued for malpractice and he died 2 weeks later. I had refused to sign confidentiality papers and squawked this was a fraud. I won the malpractice lawsuit. And obtained SUN's own medical directors statement that the broken equipment killed my mother. Tthe California citizens also lost when they didn't get the millions of dollars in fines violating the injuction would have cost SUN had the DOJ done their job. Claude Vanderwold stated with a straight face in my attorneys offices the DOJ hadn't included Sunbridge Newport in their fine in Sept 2005 against SUN for $2.25 Million, claiming Dr Stoney stated to them it wasn't harmful. Who do you believe? The woman's family who died from it or your government's representative?

[research]

Sorry for your loss. The Bush DOJ was very corrupt.

[Thermodynamics]

fox to guard the henhouse?

Ordinarily a nation at war must choose between guns and butter. Or, it can inflate its currency and buy the guns, allowing its public to be OK butter-wise until it is time to pay the piper.

Greenspan performed exactly that service for the Bush neocons. As Chairman of the Fed he allowed the economy to pump itself up, especially the housing sector. Bush was able to have his nasty wars without raising taxes and the public enjoyed the illusion of prosperity in wartime.

The housing sector bubble is not fully unwound even yet.

We cannot entrust the regulation of financial affairs to the Fed. The Fed is too independent. There is no direct oversight over the Fed.

This is also a constitutional issue (Article 1, Section 8). Congress is supposed to regulate the currency.

[jill2468]

I am most supprised by the fact that he has not appointed a Czar to oversee the private sector who will only be answerable to him. Come on Obama, your off your game here.

[RowJimmy]

I can't stand the Fed and it seems to tell Obama what to do rather than the other way around. But where does Obama or any president for that matter get the authority to appoint these "Czars". They are unelected unaccountable powerful overlords of whatever Obama decides. There is absolutely no power given to the executive branch that allows you to do this in the Constitution. We have a lot of government agencies, cabinet members, congress, and the senate that can do these jobs but for some reason we allow the president to just make up a new cabinet post that answers to him. That isn't how the Republic is supposed to work.

[Sundialsvc4]

Well, ultimately it will be the Congress, and not the President, who will create and enact the legislation. It's to this President's credit that he didn't thump-down a big piece of already-written legislation on their desks and demand that they "approve this."

I personally agree with the 238 members.

[allonfla]

Sorry, right now Congress has as much credibility as Fox News

[tnkeating]

Judging by how many more people watch fox news than any other news, I would say there pretty credible, Congress on the other hand, well, lets just say things are looking up

[nomobull]

YOU MEAN LIKE EVERY WINNER OF AMERICAN IDOL BECOMES A BIG STAR.

[LeLoup]

Say what? Credibility is proportional to popularity?

If credibility had anything to do with the number of people endorsing a position, then intelligent design should be considered "credible". And man didn't really get to the moon; waterboarding is not torture. FDR caused the Great Depression.

Right!

[fairtaxnow]

Support HR 1207 and S 604. Let your Congressman and Senators know they should support these measures.

[Patriot1970]

The congressmen who don't sign on are obviously owned by someone.

[research]

The Plutocrats dream of world domination is coming true, right before our eyes.

The largest transfer of wealth in human history is going from the people and main street, to the Banksters, wall Street and the world Bankster:IMF.

The IMF has incredible amounts of gold, the 3rd largest horde. Yet we gave them 200 Billion dollars.

The bankers are now hording gold and will crash the worlds currencies. Then they who have the gold will make the rules.

The IMF is infamous for destroying peoples lives with "austerity" programs.

If Obama were to do an FDR, the Bankers would probably assassinate him as they plotted to do with FDR.

There are alternatives, but the People of the world need to wake up.,

Democracy versus Plutocracy.

Democracy is losing.

See my profile for details and links.

[RowJimmy]

What exactly did FDR do to make the banksters hate him? I thought he was a pawn of the bankers since he spent lots of money which he had to borrow at interest from the Fed. Also, he confiscated the people's gold and gave them Federal Reserve notes in return. Than the bankers doubled the price of gold and sold much of it to Europe to make lots of money. FDR did some good things but overall he was just another puppets of the bankers like most presidents of the 20th century.

[research]

You really should study FDR and the great depression, there are many links on my profile.

start here:

http://larouchepub.com/other/2007/3414fdr_housing.html

[timm0]

Obama has done a number of things very well so far in his presidency.

But EVERYTHING he has done so far with the Treasury Sec decision, economic adviser appointments, and the overall operation of the Fed and the bailouts have been a total and complete disappointment.

If he signs a health care bill which has no public option in it, I will be convinced that he is just another tool of the elite - far brighter and inspiring than the last one - but a tool nonetheless. For all our sakes, I can only hope he just has the one blind spot.

[Chris S]

The current bill they are working on has a public option. It sounds nice at first. But who is going pay for a public option when there is a free option? Eventually the Government health care will put the public option out. They say they will fine business for not offering a health care plan, and this will protect the public option. Economists say this will cause small business in America to cut 3.5 million jobs. SOUNDS GREAT! Some small business' will have to find a way around it or they will go out of business. This health care thing is going to destroy us.

[Poboy]

Maybe there should be a look see at the FED's role in Lehman's demise.

But I think there should be a thorough governmental investigation into the FED's role in the purchase of AIG.

Why would Obama give the FED more power to regulate "systemic risk" when the traditional regulatory role has been to "bust up" the trusts?

It's time for these Obamaniacs to take off the blinders.

[AngieMom57]

I think it's what we could label "on the job training" and POTUS Obama certainly would benefit from "taking off the blinders".

Any suggestions as to who should bend the Presidents ear, pun intended ;-)

I'm still laughing and singing the theme song to the Jib and Jab: Barack Obama Superhero video...a must for today.

[jhNY]

The financial overclass will not be constrained by petty legalisms or politics. They own the Fed, whose members leave boardroom seats for seats on the Board then back again, and they own Congress-- both houses. They also own the major media outlets, and for that matter, keep a stranglehold on other governments' fiscal policies and regulatory powers throughout the world. Obama has worked for them as a young man, and has received funding by them during his election campaign-- more funding came to his campaign from the financial sector of the economy than from any other source. How can he be expected to rein in his benefactors and associates?

The financialization of the nation took comaparatively little time to come into full flower, but was followed only too quickly by the end of the international capitalist 'system'. When the 'system's' operators had exhausted all traditional means of capital extraction from the world's economy, they threatened suicide till the governments of the world, in a rare display of practical action, contrived a means of paying them even more money to back away from the lip of the cliff. But the 'system' remains broken, and only the plutocrats have money. When they gaze at the wreckage they made of everywhere, to them it just looks like an unlikely place to invest capital-- after all, who could expect much of a return when everybody they might lend to is broke?

[maeme]

I completely agree with jhNY. One other point I would like to see the American people wake up to is TERM LIMITS. It is frightful how many of our so-called public servants are bought and paid for and have become institutionalized and NEED to go home - it is a government by and for the people not a ruling elite. I see Bill Maher is speaking out again. I am just shocked over the new guy being sooooooo much like the old one and the Democrats are looking like the old Republicans. Ron Paul is 100% on the right track with this bill. Call Representatives.

[WorkingClass]

I am opposed to term limits unless you are talking about "be out of town by sundown". Congressional whores (AND administration and judicial whores) must be removed immediately and by whatever means necessary.

[AngieMom57]

Our voices are clearly not being heard and the bankers have and always have had the politicians in their back pockets.

What else is new, and what can we do to change this around?

Here is a peaceful suggestion instead of taking to the streets in protest of "the gross malfeasance of our power elite".....

Timmy & Larry,

Please take a leave of absence to go vegan for the summer and let someone else bend the President's ear and make policies that don't have a history of failing. Just make sure these new advisers are not more of the same smug, greedy, well-fed white men banker types.

Send the President a book to read:

AGENDA FOR A NEW ECONOMY:
FROM PHANTOM WEALTH TO REAL WEALTH
by David C. Korten