Another chapter of Banksters and the “Regulators” That Love Them.
Yesterday Federal Reserve Chairman Bernanke testified before the House and Senate and, as is customary, avoided giving direct answers to direct questions. But while it is also customary for Bernanke to make questionable assertions (like there was no Housing Bubble) he went the extra mile yesterday in his dishonesty.
Bernanke said the very notion of a monetary policy audit was misleading.
“The term ‘audit the Fed’ is deceptive. The public thinks that auditing means checking the books, looking at the financial statements, making sure that you’re not doing special deals, and that kind of thing. All of those things are (already) completely open,” he said.
That is a complete lie.
I am sure many of the news organizations that had to sue the Federal Reserve to get information on special deals would be quite confused by that statement.
So would Senator Sanders, Congressman Paul, fmr. Congressman Grayson and all the legislators that had to pass a bill before Bernanke would open the books.
To recap, if what Bernanke asserted about Fed special deals being “completely open” was true, why the lawsuits? Why the bi-partisan legislation forcing an audit?
The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.
The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates.
Oh that “anyone” that included Congress.
Lawmakers knew none of this…
Had lawmakers known, it “could have changed the whole approach to reform legislation,” says Ted Kaufman, a former Democratic Senator from Delaware who, with Brown, introduced the bill to limit bank size…
“When you see the dollars the banks got, it’s hard to make the case these were successful institutions,” says Sherrod Brown, a Democratic Senator from Ohio who in 2010 introduced an unsuccessful bill to limit bank size. “This is an issue that can unite the Tea Party and Occupy Wall Street. There are lawmakers in both parties who would change their votes now.”
The Left and the Right clearly do not agree on how to reform monetary policy but they can agree on the facts – and the fact is, as Mr. Bernanke well knows, the Federal Reserve does not have an open process let alone a “completely open” process as to how it operates and to whom it gives preferential treatment.
Luckily for Bernanke, he gives those secret loans to the people that buy Congress, otherwise his lying might get him into trouble.