Thursday, November 03, 2011 by Staff Report - www.thedailybell.com
The Veil of Secrecy at the Fed Has Been Lifted, Now It's Time for Change ... 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. – Senator Bernie Sanders/ HuffingtonPost
Dominant Social Theme: Stand up to the Federal Reserve, demand accountability and then make sure it works on behalf of the politicians, er ... people.
Free-Market Analysis: Senator Bernie Sanders, America's only admitted socialist Senator, has a plan to fix what's wrong with America's central bank, the Federal Reserve. He wants to audit it, make its leaders more "accountable" and maybe involve federal politicians more directly in its workings.
Of course, the problem with the Federal Reserve, as with any central bank, is that it FIXES the price of money. Price fixing inevitably distorts the economy, transferring wealth from those who create it to those who did not – and don't know how to utilize it as a result.
It is impossible to "fix" price fixing. That is a simple enough concept. But apparently it is not one that Bernie Sanders wants to understand. Nor the Huffington Post. It is a very simple concept – that one cannot "improve" on fixing a price by making its workings more transparent. One cannot "improve" a rape by making its mechanics public. One can only STOP it, if one wants to end the practice.
This Sanders is not prepared to do. He will talk around the point in any one of a number of ways, and Huffington Post will provide him the platform to do so. He will use, in fact, some of the rhetoric of the Occupy Wall Street crowd regarding criminality, etc. But all of this is no more than talk. As are his proposed solutions. Here's some more from this article:
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. 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! ...
Wow, we're blown away. The Federal Reserve is a corrupt institution! Thanks, Bernie. And thanks for reminding us about the GAO report, though we really don't think that much of it.
Notice that the GAO report in Sander's summation did NOT deal with the underpinning of the Fed – which is the conceit that man can fix the price of money – determining its price and volume.
No one can fix the price of money. Only the marketplace itself – the Invisible Hand – can determine the price and volume of money that is necessary. This is done by allowing gold and silver to circulate freely and by allowing people themselves to adjust the volume of circulating money metals and its representative currency via hoarding, dishoarding and opening and closing mines.
All these activities are dependent on whether there is too much or too little gold and silver in the marketplace and how much "value" one can therefore obtain for available precious metals. When there is too much gold and silver around, people tend to hoard and mines tend to close. Too little gold and silver and the reverse takes place. It is a marketplace phenomenon.
By virtually severing the link between supply-and-demand and gold and silver, the elites have doomed economies to endless cycles of ruin. It is money that is the fundamental problem and the PRICE FIXING of money that is the culprit of the West's current fiscal and monetary disasters.
And so, to Sanders. What does "Bernie" – this man of the people – intend to do about the price fixing of money at the Federal Reserve? He intends to "reform" the Fed so that it "serves the needs of all Americans, and not just Wall Street."
Of course, as this is a complex procedure, Bernie is not going to "go it alone." He needs big brain ammunition and is not afraid to tap the necessary resources. "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.
DB: End the Fed.
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.
DB: End the Fed.
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?
DB: End the Fed.
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 between 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?
DB: End the Fed.
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?
DB: End the Fed.
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?
DB: End the Fed.
See how simple that is? Sanders doesn't need to convene a constellation of big brains to figure out what to do. When a world-spanning mercantilist entity is engaging in price-fixing and literally ruining the lives of billions, you END it. You don't fiddle around the edges – not even if "responsible people" explain how impossible it is to stop its price-fixing ways.
Yes, we are familiar with the arguments. It is impractical to end the Fed's price-fixing. The Fed's price-fixing of money is an integral part of the economy and of industrial growth. (No, it's not.) People would suffer without the Fed's price-fixing of money. (No, they wouldn't, or not anymore than they are now.)
Sanders writes: "One thing is abundantly clear: Americans deserve a Federal Reserve that works for them, not just the CEOs on Wall Street." Our response: "All you are doing, Senator Sanders, is providing damage control. It is impossible to legislate a solution for price-fixing. You cannot resolve it, you can only stop it. Even Richard Nixon eventually realized that. Suggesting you can only puts you in a position of supporting the very institution you purport to disdain."
Question: Whose side are you really on?
