As a result of the greed, recklessness, and illegal behavior on Wall Street, the American people have experienced the worst economic crisis since the Great Depression. Millions of Americans, through no fault of their own, have lost their jobs, homes, life savings, and ability to send their kids to college. Small businesses have been unable to get the credit they need to expand their businesses, and credit is still extremely tight. Wages as a share of national income are now at the lowest level since the Great Depression, and the number of Americans living in poverty is at an all-time high.
Meanwhile, when small-business owners were being turned down for loans at private banks and millions of Americans were being kicked out of their homes, the Federal Reserve provided the largest taxpayer-financed bailout in the history of the world to Wall Street and too-big-to-fail institutions, with virtually no strings attached.
Over two years ago, I asked Ben Bernanke, the chairman of the Federal Reserve, a few simple questions that I thought the American people had a right to know: Who got money through the Fed bailout? How much did they receive? What were the terms of this assistance?
Incredibly, the chairman of the Fed refused to answer these fundamental questions about how trillions of taxpayer dollars were being spent.
The American people are finally getting answers to these questions thanks to an amendment I included in the Dodd-Frank financial reform bill which required the Government Accountability Office (GAO) to audit and investigate conflicts of interest at the Fed. Those answers raise grave questions about the Federal Reserve and how it operates -- and whose interests it serves.
As a result of these GAO reports, we learned that the Federal Reserve provided a jaw-dropping $16 trillion in total financial assistance to every major financial institution in the country as well as a number of corporations, wealthy individuals and central banks throughout the world.
The GAO also revealed that many of the people who serve as directors of the 12 Federal Reserve Banks come from the exact same financial institutions that the Fed is in charge of regulating. Further, the GAO found that at least 18 current and former Fed board members were affiliated with banks and companies that received emergency loans from the Federal Reserve during the financial crisis. In other words, the people "regulating" the banks were the exact same people who were being "regulated." Talk about the fox guarding the henhouse!
The emergency response from the Fed appears to have created two systems of government in America: one for Wall Street, and another for everyone else. While the rich and powerful were "too big to fail" and were given an endless supply of cheap credit, ordinary Americans, by the tens of millions, were allowed to fail. They lost their homes. They lost their jobs. They lost their life savings. And, they lost their hope for the future. This is not what American democracy is supposed to look like. It is time for change at the Fed -- real change.
Among the GAO's key findings is that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the GAO, the Fed actually provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.
The GAO has detailed instance after instance of top executives of corporations and financial institutions using their influence as Federal Reserve directors to financially benefit their firms, and, in at least one instance, themselves.
For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed's emergency lending programs.
Getting this type of disclosure was not easy. Wall Street and the Federal Reserve fought it every step of the way. But, as difficult as it was to lift the veil of secrecy at the Fed, it will be even harder to reform the Fed so that it serves the needs of all Americans, and not just Wall Street. But, that is exactly what we have to do.
To get this process started, I have asked some of the leading economists in this country to serve on an advisory committee to provide Congress with legislative options to reform the Federal Reserve.
Here are some of the questions that I have asked this advisory committee to explore:
1. How can we structurally reform the Fed to make our nation's central bank a more democratic institution responsive to the needs of ordinary Americans, end conflicts of interest, and increase transparency? What are the best practices that central banks in other countries have developed that we can learn from? Compared with central banks in Europe, Canada, and Australia, the GAO found that the Federal Reserve does not do a good job in disclosing potential conflicts of interest and other essential elements of transparency.
2. At a time when 16.5 percent of our people are unemployed or under-employed, how can we strengthen the Federal Reserve's full-employment mandate and ensure that the Fed conducts monetary policy to achieve maximum employment? When Wall Street was on the verge of collapse, the Federal Reserve acted with a fierce sense of urgency to save the financial system. We need the Fed to act with the same boldness to combat the unemployment crisis.
3. The Federal Reserve has a responsibility to ensure the safety and soundness of financial institutions and to contain systemic risks in financial markets. Given that the top six financial institutions in the country now have assets equivalent to 65 percent of our GDP, more than $9 trillion, is there any reason why this extraordinary concentration of ownership should not be broken up? Should a bank that is "too big to fail" be allowed to exist?
4. The Federal Reserve has the responsibility to protect the credit rights of consumers. At a time when credit card issuers are charging millions of Americans interest rates of 25 percent or more, should policy options be established to ensure that the Federal Reserve and the Consumer Financial Protection Bureau protect consumers against predatory lending, usury, and exorbitant fees in the financial services industry?
5. At a time when the dream of homeownership has turned into the nightmare of foreclosure for too many Americans, what role should the Federal Reserve be playing in providing relief to homeowners who are underwater on their mortgages, combating the foreclosure crisis, and making housing more affordable?
6. At a time when the United States has the most inequitable distribution of wealth and income of any major country, and the greatest gap between the very rich and everyone else since 1928, what policies can be established at the Federal Reserve which reduces income and wealth inequality in the U.S?
Given the growth of the Occupy Wall Street movement and given the concerns of millions of Americans about Wall Street, we now have a unique opportunity to make significant changes to one of the most powerful and secretive agencies of the federal government. One thing is abundantly clear: Americans deserve a Federal Reserve that works for them, not just the CEOs on Wall Street.
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Quote: . . . we now have a unique opportunity to make significant changes to one of the most powerful and secretive agencies of the federal government.—Unquote
First of all, the Federal Reserve is not a government agency. It is a consortium of international bankers, formed in secrecy in 1913, basically the OPEC of the global financial industry.
Secondly, the Feds, so called, are only interested in the things they are interested in, not mandates put upon them by Congress or anyone else.
Third, the Federal Reserve should have nothing to do with employment, full or otherwise, nor should
Congress.
Fourth, Congress should stop "appointing" Federal Reserve chairmen from the banking industry the Feds are supposed to be regulating. It's basically a rubber stamp vote, anyway, "appointing" whomever the Feds or banking industry recommends to them.
Lastly, the only way to solve the problem of the Federal Reserve is to eliminate the Federal Reserve.
In the end, this is all a dog and pony show. It was the policies of the body that Sanders belongs to that created the mess that we are in. As no right thinking individual trusts either the Fed or Congress to police themselves, is Congress willing to legislate both bodies out of existence? An extreme solution, I admit, but since we seem to be in the mood for performing today, why not, I say.
It's not about reforming anything, but educating (read: empowering) yourself.
Start creating groups of people who really know what's what.
Get it straight.
Obviously you are too young to remember the old days in America when certain financial institutions did not have a strangehold on the country. Look no further than Egypt, Libya, Yemen, Algeria, and Syria for your proof that corrupt power brings down countries. For a comparison, look at Norway, Finland, Denmark, Germany, Sweden, Switzerland, and a dozen others who have not rigged the systems of their countries in order to steal the wealth. These countriies will continue to be stable and healthy.
Anyway, your comment is not related to my post. Please reply with something that is related to my post and keep your assumptions, judgements and predictions to yourself.
I am talking about facts, morals, responsibility, motivation and direction...
It's great that you are assembling all these Nobel prize winners, etc. to evaluate the FED.
Hopefully you will have them spend some of their time EDUCATING THE PUBLIC about the nature of the FED (apparently a quasi-private company which obviously leads to the corruption), and how money is created (debt attached to all of it), and possibly how public style banking (eg North Dakota) could work.
Please touch base with Rep. Dennis Kucinich, as he has a bill HR 2990 that NATIONALIZES the FED and creates debt free money for jobs and infrastructure, as it would have every right to do.
At this point I don't trust your investigation because you have not, that I have seen, mentioned at all these crucial issues of line of authority. I wonder if any of the economists you mentioned in other places get into this issue either of just exactly who runs the FED.
The other day on Ring of Fire Radio I heard William K Black tell Sam Seder that it was a misconception that the FED is a private institution. On the other hand I have seen video of Alan Greenspan telling Jim Lehrer of PBS that NO ENTITY of the US government can tell the FED what to do.
Get that line of authority in the hands of our democratic government and then all things are possible. Lets go back to our US Constitution's mandate to create our money.
Thanks for all you do,
We must make it our business to "clone" them -- by using their arguments to convince the electorate and turn this country around.
F. Being greedy and selfish at the expense of others and thus a failure as a human being;
D. Not doing to others what you do not want done unto you;
C. Wanting for others what you want for yourself;
B. Loving others as you love yourself;
A. Being saintly by loving others more than you love yourself.
In the "growth of the Occupy Wall Street movement" is a glimmer of hope that we may not fall from Grace. It is of fundamental importance - for those responsible for creating the present unfortunate state of affairs in our nation regardless of whether or not they are in the public or the private sector - for US/us to advance beyond the "F." category.
There have been studies with female Capuchin monkeys whom noted differences in rewards for the same tasks. The difference in a cucumber and a grape would get the cucumber hurled back towards the researcher.
With the isolation of the halls of finance, you could assume we could have learned a lot about animal behavior with seemingly unlimited awards had we had the opportunity to study the subjects.
In a snippet on NPR today I heard that in a poll of OWS participants, they believed that Wall St was perhaps worthy of 10 to 20 pct of their earnings. While a poll of Wall St workers believed their worth was 80 pct of their take.
Here is the link for the capuchin studies:
http://news.nationalgeographic.com/news/2003/09/0917_030917_monkeyfairness_2.html
http://news.nationalgeographic.com/news/2003/09/0917_030917_monkeyfairness_2.html