Exactly.vanitybinge wrote:A hundred years ago we had no Federal Reserve. That bitch was designed to put us in eternal debt, it has nothing to do with the taxes. Until the Fed is gone, we will always be in debt. Fact.
http://www.huffingtonpost.com/2010/03/0 ... 90872.html
Ryan Grim
[email protected] | HuffPost Reporting
Fed Audit Bitterly Opposed By Treasury
First Posted: 03- 8-10 06:55 PM | Updated: 03- 8-10 08:06 PM
The Treasury Department is vigorously opposed to a House-passed measure that would open the Federal Reserve to an audit by the Government Accountability Office (GAO), a senior Treasury official said Monday. Instead, the official said, the Treasury prefers a substitute offered by Rep. Mel Watt (D-N.C.), and would like to see it enacted as part of the Senate bill.
The Watt measure, however, while claiming to increase transparency, actually puts new restrictions on the GAO's ability to perform an audit.
Secretary Tim Geithner, Assistant Treasury Secretary Alan Krueger and Gene Sperling, a counselor to the secretary, held a briefing Monday with new media reporters and financial bloggers during which they discussed the Fed audit and other topics. Under the briefing's ground rules, the officials could be paraphrased but not quoted, and the paraphrase could not be connected to a specific official.
HuffPost reporter Sam Stein lodged what he called a "formal complaint" against the ground rules. The complaint was noted and the briefing began.
Asked whether he supports the House-passed measure to open the Fed to an audit, which was cosponsored by Reps. Alan Grayson (D-Fla.) and Ron Paul (R-Texas), a senior Treasury official said he is intensely opposed to it.
The official said the measure would undermine the independence of monetary policy and could restrict the ability of the Fed to act in times of crisis. He said that the GAO already has audit authority and that the chairman routinely testifies before Congress.
He said he supports full disclosure when it comes to the scale of Fed lending and wouldn't draw a bright line around auditing certain activities, but wants to make sure it maintained its independence.
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A lack of independence, he said, could lead to inflation and otherwise undermine progressive priorities.
He said, however, that he would be supportive of efforts that would help the Fed earn back some of the credibility it has lost over the past few years.
HuffPost asked if central bank liquidity swaps -- foreign currency trades worth hundreds of billions of dollars -- should be subject to an audit. The official said that the identity of the countries that received dollars was made public as was the amount each got. It worked well and was good policy, he said, and opening it to audit could undermine its future effectiveness.
The purpose of the swaps, he said, was to make sure that foreign central banks had enough dollars to meet their obligations. The effort kept interest rates low, he said.
A member of Congress, told of the unnamed Treasury official's comment, asked not to be named and said that Geithner, a former Fed president, should recuse himself from Fed audit legislation discussions, given that the audit would cover his own actions during the crisis.
And Rep. Grayson said he finds Treasury's opposition to the audit troubling. "There is a growing feeling on the part of real Democrats that the president is getting bad advice from people who have sold out to Wall Street," said Grayson. "And opposing a measure that passed overwhelmingly in the House with bipartisan support at the [Financial Services] Committee level, based up on legislation that now has 317 cosponsors in the House, shows that the president may be getting bad advice."
The idea that the Fed's mission would be undermined by an audit, said Grayson, "is a scarecrow erected by people who want to cover up the actions of the Fed for their own purposes, including those who actually have worked at part of the Fed, to prevent accountability at any cost."
Geithner served as president of the New York Fed during the financial crisis.
"It's interesting that the Fed regards the simple fact that people find out what it does as somehow being unduly restrictive. We are a government of laws, not of men," said Grayson.
"It's certainly no surprise that banking insiders at Treasury don't want transparency at the Fed," said Jesse Benton, a spokesman for Rep. Paul. "They are wrapped up in the central bank shenanagins too, and do not want their wheelings and dealings out in the open any more than Alan Greenspan or Ben Bernanke,"
http://www.nytimes.com/2010/05/07/busin ... e.html?dbk
Senate Nod to Fed Audit Is Expected
By DAVID M. HERSZENHORN
Published: May 6, 2010
WASHINGTON — The Senate on Thursday rejected an effort by liberal Democrats to break up some of the biggest banks, defeating an amendment to financial regulatory legislation that would have imposed new limits on the size and scope of financial companies.
The audit proposed by Senator Bernard Sanders of Vermont has won bipartisan support.
The amendment, proposed by Senators Sherrod Brown, Democrat of Ohio, and Ted Kaufman, Democrat of Delaware, would have forced some of the heaviest hitters on Wall Street, including Citigroup and Goldman Sachs, to shrink in size to limit the risk that big banks pose to the broader financial system.
The vote was 61 to 33, with 29 Democrats and 3 Republicans and 1 independent in favor, and 27 Democrats and 33 Republicans and 1 independent opposed.
It came as the Senate, hamstrung by partisan skirmishing over procedural issues, lurched forward with the broader bill, which would impose the most far-reaching overhaul of the regulatory system since the aftermath of the Great Depression.
Opponents of the Brown-Kaufman amendment, including Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the banking committee, said that size alone was not a cause for concern and that the underlying financial regulatory bill already contained provisions to discourage the risky actions that led to the 2008 financial crisis, and to let regulators break up banks should they pose any danger.
“Size is not the appropriate restriction,” said Senator Mark Warner, Democrat of Virginia and a member of the banking committee, who helped draft the regulatory bill. “The real question should be the level of inter-connectedness and the risk-taking we saw in the crisis of 2008.” Mr. Warner added, “The Dodd bill does provide ability for these banks to be broken up.”
Mr. Brown and Mr. Kaufman had hoped their measure would be approved on a gust of the populist, anti-Wall Street sentiment that has swept the country since the near collapse of the financial system and subsequent bank bailouts, including the government’s $700 billion Troubled Asset Relief Program.
“Our amendment ends bailouts by ensuring that no Wall Street firm is so big or so reckless that if it fails, as it does, so does our economy,” Mr. Brown said in a floor speech pleading for support. “The bill we’re considering today is strong but it needs to be stronger.”
Moments before rejecting the Brown-Kaufman proposal, the Senate approved by voice vote an amendment by Senator Maria Cantwell, Democrat of Washington, to give the Commodity Futures Trading Commission more authority to crack down on manipulation of the commodities and derivatives markets.
Separately on Thursday, the Senate moved closer to approving a proposal to require a one-time audit of the Federal Reserve’s response to the financial crisis and to force the central bank to disclose the recipients of more than $2 trillion in aid, including the bailouts of big banks.
The proposal, by Senator Bernard Sanders, independent of Vermont, gained momentum even as Republicans and Democrats delayed a vote on it until next week.
Despite the delay, the amendment by Mr. Sanders requiring the audit appeared to have enough support among senators in both parties to win adoption easily.
The White House and the Fed had opposed the original proposal by Mr. Sanders, which would have allowed additional audits of the Fed. A modified proposal from Mr. Sanders appeared to address those concerns, but it would still force the Fed to disclose information that it had maintained was confidential.
The proposal would require the federal Government Accountability Office to conduct a “one-time audit of all loans and other financial assistance provided during the period beginning on Dec. 1, 2007 and ending on the date of enactment of this Act” under a number of programs the Fed used to respond to the near collapse of the financial system.
The amendment states that the audit “not interfere with monetary policy,” addressing a concern raised by the Obama administration and the Fed.
Officials said the proposal would expand on changes made to the Fed in 1978, which subjected much of its operations to regular auditing by the accountability office but explicitly excluded monetary policy.
The audit sought by Mr. Sanders would scrutinize an alphabet soup of programs that injected liquidity into the markets, ranging from commercial paper to money market funds. Under the proposal, the accountability office will not question whether the loans should have been made but will focus on operational integrity and accounting practices.
The audit, however, would explore “whether the credit facility inappropriately favors one or more specific participants over other institutions eligible to utilize the facility” and “whether there were conflicts of interest with respect to the manner in which such facility was established or operated.”
The apparent compromise with the administration and the Fed would give Mr. Sanders and other critics of the central bank an opportunity to claim victory, while not breaking with the Fed’s insistence that its monetary decisions be sacrosanct and insulated from political influence.
Sewell Chan contributed reporting from Washington.
