Tweet
As part of the larger financial reform package, Representatives Alan Grayson and Ron Paul’s audit the Federal Reserve provision passed the House of Representatives today.
The fed, which has never had an audit in its history, desperately needs some transparency, as Grayson explains:
Congressman Grayson discovered that the Federal Reserve has conducted secret bailouts that range in the hundreds of billions of dollars since 2008. The bill grants authority to the non-partisan General Accountability Office to conduct the audit. “Exposing how the Federal Reserve operates is a crucial component to any meaningful reform. We need to find out what they’ve done and then we can figure out how to respond,” Congressman Grayson said.
It’s significant that this provision, opposed by the entire Wall Street establishment, has passed the House of Representatives. Now, on to the Senate.
73 Comments
Now that is some good news
Where good legislation goes to die.
via CalculatedRisk:
Why doesn’t someone like this have the President’s ear,
instead of the deficit fetishists?
Oh, never mind.
It is enitrely inaccurate to assert the FRB has never been audited. From Bernanke’s 12/3/09 confirmation testimony
I’m not sure, but I think the Paul-Grayson bill refers to removing the 1978 exemption, so that its monetary policy function can be audited.
Doesn’t matter where their money comes from, politicians know a villain when they see one. In the case of the Fed, you have an assault from both sides, liberals on one and government-hating neo-cons on the other. Win-win for the pathetically pandering elected official. Whether any real reform will come of this is yet to be seen.
……. and now, off to a quiet death in the Senate.
Enron had their accounts audited and published their balance sheets too.
So did Bernie Madoff. /s
“Our financial statements are public and audited by an outside accounting firm,”
S’il vous plait, would you happen to know the name of the “outside” accounting firm?
H & R Block maybe?
The audit the Fed provision is a lot like the one on the healthcare side to eliminate the pre-existing conditions bar, one bright spot in a sea of crap.
Duh! Arthur Anderson.
The Fed spends a helluva lot of taxpayer’s money not to be audited.
Not the Congress. Bernanke refuses to reveal which banks have received the taxpayers’ money;
‘The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.’
http://wallstreetblips.dailyradar.com/story/fed_defies_transparency_aim_in_refusal_to_identify/
THere are so many things I don’t understand lately, so please explain to me how any branch of the gov’t can just say “no, we’re not going to tell you” to the prez, the congress, etc. It’s beginning to happen throughout the gov’t.
@9
Sigar smoke and mirrors?
Actually I was thinking maybe Deloitte and Touche.Yes, they WERE ONE of Endrun’s bean counters.
Now,check this excerpt from the Nation-Scahill’s latest piece:
.Published on Friday, December 11, 2009 by The Nation
Contractors Watching Contractors
by Jeremy Scahill
The Special Inspector General for Afghanistan Reconstruction (SIGAR) has hired a private corporation to help prepare government reports for Congress about US government contracts with other corporations in Afghanistan. The massive consulting firm Deloitte and Touche was hired on a one year contract signed with the US Army’s Contracting Center of Excellence in May for $3.7 million. In the end, the contract could be worth up to $7.5 million, according to federal contract data reviewed by The Nation. In 2008, former Republican Congressman Tom Davis was hired by Deloitte as a Director. Davis once chaired the powerful House Government Reform Committee.
As part of its work for SIGAR, according to contracts obtained by The Nation, the firm helps prepare the agency’s quarterly reports to Congress, assists in preparing Congressional testimony for agency officials and helps develop SIGAR’s responses to “questions for the record” from lawmakers.
SIGAR hired Deloitte “as an interim measure while we, as a new organization, built the internal capability we needed to provide the quality reports that the Congress requires,” SIGAR spokesperson Susan Phalen told The Nation. “The SIGAR Quarterly Reports require an extraordinary amount of detail and attention.” Phalen downplayed Deloitte’s role in preparing Congressional reports, saying they “have assisted the SIGAR staff on certain sections of the Quarterly Reports.”
Deloitte also plays a similar role for several other federal agencies, including preparing reports for the Special Inspector General for the Troubled Asset Relief Program. TARP was created by the Emergency Economic Stabilization Act of 2008 and allows the US Treasury Department to purchase or insure up to $700 billion of “troubled assets.” Deloitte also works in a similar capacity for the US Agency for International Development and the Special Inspector General for Iraq Reconstruction
“Contractors Watching Contractors” linky to follow
On to the senate where our corrupt senators can take money to water down the bill to make it ineffective or outright kill it.
nor has it been willing/able to account for some 9 Trillion in their off-balance sheet transactions.
Contractors Watching ContractorsDec 10, 2009 … The Special Inspector General for Afghanistan has hired a firm with ties to a powerful ex-Republican congressman to help prepare oversight …
http://www.thenation.com/doc/20091221/scahill3 – Cached
The question is: where did Helicopter Ben drop the two trillion or so dollars that he ran off on his legendary printing press. Thus far he has refused to say.
actually, FRB is a private entity, not a government branch.
Assuming you are right what can a monetary policy audit tell us? Also why is the Fed and WallStreet so worried any specific things they might be worried about.
What is your point?
Is it to say that the FRB has made it plain and clear who were the recepients of upward of $27 trillion in taxpayer money in loans and bailouts and on what terms? If so then you must have that information readily available and can share it with us, recepient by recepient.
Or are you claiming that the FRB can make separate expenditures by way of monetary policy that is so sensitive that it needs to be carried out in private? We are not supposed to be privy to the amount and sectors to where that maoney goes?
Are you saying that the dealings of the FRB are clear as they stand and that nobody seems to know where the trillions have been spent just because the present auditors have been idle.
There seems to be some confusion here. Most people have no idea of the extent of the money that the FRB has essentially given at no interest, for what purpose and to whom. But if you have that information please pass it along.
Now, on to the Senate.
Get ready for some fancy tap-dancing on the floor of the Senate. Problem is that this is one of the very few issues that has support from across the spectrum. Even the Wingiest of Wingnuts are in agreement. So suck on that, Senators.
On the other hand, should the provision manage to clear the Senate, are we looking at a Presidential veto (or some other kind of obstruction)? I’m highly skeptical that the FED is just going to open up its books and say, “Have at it…”
Well you know what Freud said about this: Sometimes a SIGAR is just a SIGAR. But you raise a valid point. Is it one when it has been Deloitte and Touched all over?
It’s private when it doesn’t want to be audited and it’s public when it wants to drop its losses on the Treasury.
heh heh heh!
Charlie Gasparino had an article at (d. beast?) in defense of GS., that was transparent BS and absent of logic. His only outrage was directed at GS’s current relationship with FRB, the no interest loans being spun into Treasury bonds.
What’s far more outrageous, imo, is that such a fraudulent profit center should, if at all, have been made available to help out. say – 35 million Californians rather than Managers at GS.
Touche’ !!
The Fed is, I understand, like the USPS and Amtrak: semi-private. Means that Congress is supposed to have a say in how it’s run, and provide a least part of the funding.
(Thank Ronny for that kind of mess.)
As eCahn said, this is all about the 1978 exemption. The Fed engaged in blatantly fiscal policy by expanding its balance sheet the way it did by allowing banks to dump crap over-valued assets on it in repo transactions, but it is hiding behind the assertion that this was all monetary in nature and so exempted.
This just gets to all of the ambiguities that surround the Fed: Constitutional or unConstitutional, public or private, fiscal or monetary, for the banks or for the public, etc.
“Dog Food Davis”
Incidentally, Tom Davis who was appointed to Deloitte’s board of Director is the Repube politico who referred to the Republican party as a brand of dog food that people would NOT buy.
a Utility?
To maintain that people’s spending priorities are the cause of the countries inability to export is a patent absurdity.
People are not extravagant on what they spend their income on. They spend their income basically on necessities of life, such as health, home, education for their kids, and notably for defense. To maintain otherwise is perverse and inaccurate.
People have needed to seek credit because while these expenditures have increased dramatically their wages have not. That is a fundamental fact.
The lack of exports is by design. Manufacturing has been displaced outside the country. That’s what accounts for the balance account deficit.
What ails the economy has been conspicuously left out of your analysis. Namely the diverting away of trillions from the actual economy by the finacial sector, and the abscence of policies to increase wages at the expense of business profits.
To speak of the need to cut down on consumer extravagance when people are in hoc and can’t make ends meet is lunacy. More consumer demand is what is needed and to consume more American goods.
Paul Volker:
“We have another economic problem which is mixed up in this of too much consumption, too much spending relative to our capacity to invest and to export,” Volcker, an adviser to President Barack Obama, said today in Berlin. “It’s involved with the financial crisis but in a way it’s more difficult than the financial crisis because it reflects the basic structure of the economy.”
http://caps.fool.com/Blogs/ViewPost.aspx?bpid=310823&t=01002130057764754273
Depends on the person and the income.
Some people are extravagant, even when they don’t really have the money, and others have are not, even though they do have the money.
A lot of us don’t spend on defense, whatever you think that is, at the level of families and individuals.
Speaking of exemption and smoky balance sheets, here’s an interesting bit of miscellany,courtesy business week:
http://www.businessweek.com/bwdaily/dnflash/may2006/nf2...
President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations. Notice of the development came in a brief entry in the Federal Register, dated May 5, 2006, that was opaque to the untrained eye.
Unbeknownst to almost all of Washington and the financial world, Bush and every other President since Jimmy Carter have had the authority to exempt companies working on certain top-secret defense projects from portions of the 1934 Securities Exchange Act.
Administration officials told BusinessWeek that they believe this is the first time a President has ever delegated the authority to someone outside the Oval Office. It couldn’t be immediately determined whether any company has received a waiver under this provision.
The timing of Bush’s move is intriguing. On the same day the President signed the memo, Porter Goss resigned as director of the Central Intelligence Agency amid criticism of ineffectiveness and poor morale at the agency. Only six days later, on May 11, USA Today reported that the National Security Agency had obtained millions of calling records of ordinary citizens provided by three major U.S. phone companies. Negroponte oversees both the CIA and NSA in his role as the administration’s top intelligence official.
…
William McLucas, the Securities & Exchange Commission’s former enforcement chief, suggested that the ability to conceal financial information in the name of national security could lead some companies “to play fast and loose with their numbers.”
McLucas, a partner at the law firm Wilmer Cutler Pickering Hale & Dorr in Washington, added: “It could be that you have a bunch of books and records out there that no one knows about.”
NOTE: Now,, I don’t know if the Federal Reserve is involved in top secret defense projects, but when we’re talking trillions, underwriting the “Black Budget ” comes to my mind
.
To talk about consumer extravagance is silly when people don’t have jobs to earn money that they could spend on things. We need to manufacture goods again. At this time I would guess that about 75% of Americans are watching their spending.
http://www.businessweek.com/magazine/content/06_23/b3987040.htm
Stop Blaming Goldman Sachs
by Charlie Gasparino
” Say what you want about the bailout—it was fast and dirty, but it was necessary. If Goldman and all of those firms had gone under, there would have been no trading or lending whatsoever. Wall Street was finished, but connect the dots; Main Street, which needs Wall Street to borrow from, would be next in line. Commerce as we know it would have stopped and then you can come up with the scenario I’m sure Paulson and Bernanke envisioned of a greater Depression than this country had ever seen.”
One paragraph and presto, we’ve got ourselves a shooting gallery, if anyone cares.
http://www.thedailybeast.com/blogs-and-stories/2009-08-02/stop-blaming-goldman-sachs/
Thank you that makes sense, and it strengthens the case for clarifying all the dealings and fuctions of the FRB. As you say to define what it is and to set limits on how it can disburse public funds and to what end.
The central bank is not to be trusted, it can certainly not be left to the tender mercy of these people currently managing it.
Could someone please point me to some Climate Change diaries on FDL?
Islands under water, major rivers drying out, migrations and displacements, water wars, all within the next 10-20 years and FDL is strangely reticent on this issue.
Hoppenhagen and beyond – anyone, anywhere?
wouldn’t it just be cheaper to let them have ALL the output from the $100 printing presses for 3 days? just back up your Ryder or your Uhaul or your F-350, load the f’ker up, and drive away. what a goddam waste of time – I’d prefer if they just stole it, or were just given it.
rmm.
We’ve had a few, but we need more. If you have expertise, please write some! Or if you know anyone who does, encourage them.
Defense spending is obligatory, it is not up to you. That’s where your money goes when you pay taxes. And it is a big chunk of it. Maybe you can magiacally discount the effect of massive defense expenditures over the last 8 years and pretend that it was borne by the citizens of Canada.
If you think that the reason that people are wanton in their expenditures and that this has caused them to go into hoc, please provide us with the evidence. Also please provide us with the evidence that wages have not stagnated while basic spending in health, housing and college education has decreased.
While you are at it, what exactly are the remedies for the current lack of demand that the good Mr. Volker proposes? And how does he envision the rectifying of the current account balance deficit?
Didn’t they already do that once in Iraq?
I remember seeing a Frontline special about that very subject- of loads of cash being passed around.
Frankly, I consider it actionable, as in charges of contempt of Congress, but don’t see any sign that any action is being taken.
I don’t know but there’s this thing call teh google.
Here’s one more thorough description of the FRB’s audit procedure.
Here’s another shorter description. The answer seems to be the GAO and the OIG.
Joe Palermo did a wonderful piece called “Republican Class Warfare”. I continue to go back to it again and again. Here’s an excerpt..(link to follow)
In his excellent new book, The Squandering of America: How the Failure of our Politics Undermines our Prosperity, Robert Kuttner writes:
“Between 2000 and 2006, the productivity of American workers increased by 19 percent. But the total increase in the wages paid to all 124 million non-supervisory workers was less than $200 million in six years — a raise of $1.60 per worker — not $1.60 per hours but a grand total of one dollar and sixty cents in higher wages per worker over nearly six years! Labor market researcher Andrew Sum of the Northeastern University Center for Labor Market Studies compares the $200 million for workers to the $38 billion paid in bonuses alone by the top five Wall Street firms during the same period.” (Kuttner, p. 21)
With the current economic meltdown millions of Americans might be starting to wake up to the new reality brought on by years of unbridled greed masquerading as economic policy.
Deep inside the engine of our capitalist economy is a powerful incentive for the owners of society’s productive forces to do everything in their power to discipline labor and to push workers’ wages down as low as possible. This imperative manifests itself in the form of crushing labor unions, outsourcing jobs to low-wage countries, exploiting immigrant workers, slashing social programs that benefit low-income people, and silencing the collective strength of working-class people generally.
Beginning with Reaganomics, through Rubinomics, and on to Bush’s Kleptonomics, the Republican Party, (and its enablers inside the Clintonite Democratic Leadership Council), have set the economic agenda. They have been gleefully dancing on the heads of working people in this country for decades.
Republican Class Warfare, J. Palermo ,Huffington Post
Joseph A. Palermo: Republican “Class Warfare”Jan 23, 2008 … With the current economic meltdown millions of Americans might be starting to wake up to the new reality brought on by years of unbridled …
http://www.huffingtonpost.com/…/republican-class-warfare_b_82904.html – Cached – Similar
“With the current economic meltdown millions of Americans might be starting to wake up..”
seems, that the millions waking up and expressing their discontent are not the Democrats. A cursory review of the economic and financial landscape suggests a major wave of discontent will soon be washing over the country led by the T-baggers instead of Jeffersonian Democrats, whose role models are actually doing everything in their power to subvert ‘Jeffersoninism’ for their own narrow and anti democratic benefits.
Basically, what we need to know is how the existental dots are connected between the Fed, Wall Street, K Street, the big banks, the White House, the Treasury Department, the SEC, the federal regulatory agencies and the powers that be on the Congressional committees charged with oversight of the economy.
But there are two conflicting ways to think about it.
1]
the folks in the government garner as much objective information as possible, mull over it and then seek to establish policies, legislation and regulatory guidelines that sustain economic growth, ferret out corruption and facilitate opporunities for all to prosper regardless of class, race, gender etc.
everything is transparent and above board. And the government is there to guarentee a certain minimum for all citizens with respect to basic needs like food, clothing, shelter, healthcare, legal rights. Especially for the children and the most vulnerable.
2]
money talks
so the rest of us can take a fucking walk
My google glazed eyes have just finished reading Kohn’s testimony (zzzzz) from – July ’09- about the Federal Reserve boards inner workings.
Not ONE specific firm is mentioned in regards to WHO does the beancounting for them.
Check it out for when you experience insomnia:
FRB: Testimony–Kohn, Federal Reserve independence–July 9, 2009Jul 9, 2009 … As you know, the Federal Reserve is subject to frequent audits by … Federal Reserve’s supervision and regulation of such firms as well. …
http://www.federalreserve.gov › News & Events › 2009 Testimony – Cached – Similar
Correctomundo…and this was in great portion the subject of discussion on Bill Moyers last night.
HOW to coalesce the masses -most particularly the “faithful”-who have lost faith and feel shortchanged regarding the promised “change” they voted for.
You know, like Enron’s were.
It’s like the foxes coming back from the hen house insisting their business there will be audited by the foxes back in the den.
Indeed, Christopher Cox and Bernie Madoff could write a book about it.
Speaking of foxes in the henhouse, I find it interesting that very little has been made of Madoff’s association with NASDAQ.*
(Incidentally, it was one year ago yesterday that Madoff was arrested.)
Madoff founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960, and was its chairman until his arrest on December 11, 2008.[9]
The firm started as a penny stock trader with $5,000 (about $35,000 in 2008 dollars) that Madoff earned from working as a lifeguard and sprinkler installer.[40] In order to compete with firms that were members of the New York Stock Exchange trading on the stock exchange’s floor, his firm began using innovative computer information technology to disseminate its quotes.[24] After a trial run, the technology that the firm helped develop became the NASDAQ.[45]
] At one point, Madoff Securities was the largest market maker at the NASDAQ and in 2008 was the sixth largest market maker on Wall Street
Madoff was active in the National Association of Securities Dealers (NASD), a self-regulatory securities industry organization and has served as the Chairman of the Board of Directors and on the Board of Governors of the NASD.[10]
WIKI
NOTE: The Chicago NASDAQ was purchased by the Saudis a few years back.
One would think, and be dead wrong for it, that FDL would serve an important function in this effort of ‘coalescing’, wtf?!?
You don’t think they aren’t?
The Ponzi scheme that is being perpetrated in collusion with GS/Fed/House/Senate and the Obama administration makes Madoff’s peccadillo seem trivial in comparison.
Thank you very much. This reality should silence anyone that goes through contortions to dispel the obvious. This excerpt should be required reading.
It sums up the situation neatly and precisely. Basically as things stand it has become a zero sum game in the US. Wages can only increase if corporate and production ownership profits decrease. The battle lines are pretty clearly drawn.
What I find troubling is the complacency in the electorate to initiate meaningful change. Even as this information is available. It is a certain type of cowardice and inertia that prevents people to challenge entrenched interests and to act to assure their own.
Im not sure Ponzi is the correct nomenclature, but collusion sure as heck is right on target..
YO,how’s about some RICO actions?
For the most part, we are now speaking Swedish.*
Stockholm Syndrome
Incidentally, the ENTIRE Palermo piece is essential,imho.
“Democracy” in America revolves around the fundamental fact that only a select few have any idea where Wall Street ends and the government begins.
Not to mention the other way around.
But:
The ruling class in America is not a “conspiracy”; not in the most simplistic [or Marxist] sense of the word. They don’t meet in a conference room somewhere in a secret tunnel connecting the Fed, the Congress and the White House to Wall Street and Goldman Sachs.
It’s far more complex, fluid, labyrinthian and problematic. There are conflicting political and economic parts to the whole. It flows in and out of the global economy ever dealing with additional political and economic power bases in far flung parts of the world.
And since most of folks who are a part of it are flesh and blood human beings, the motivations and intentions that propel it forward can and will be considerably vast and varied.
But rest assured: the folks who run the Fed are smack dab in the middle of it. And to audit them is to expose the tentacles of the Bilderberg octopus.
I predict it won’t happen. Or, if it does, the “audit” will be cursury and barely skim the surface of Geithner/Kissinger Inc. Or, if more “vigorous”, it will result in disciplinary actions against a few “bad apples”.
Bernanke, Blankenfein and Geithner.
Is this how they roll?:
Be gives a billion @ 0% to Bl., who then buys Bonds from G.
Bl. earns profits on the Bonds, repays Be and then pockets the difference.
This ‘rotation’ appears to be proceeding in a perpetual motion as we speak.
The Congress, however, has purposefully–and for good reason–excluded from the scope of potential GAO audits monetary policy deliberations and operations, including open market and discount window operations, and transactions with or for foreign central banks, foreign governments, and public international financing organizations.
By excluding these areas, the Congress has carefully balanced the need for public accountability with the strong public policy benefits that flow from maintaining the independence of the central bank’s monetary policy functions and avoiding disruption to the nation’s foreign and international relationships.
Kohn’s testimony to Congress
FRB: Testimony–Kohn, Federal Reserve independence–July 9, 2009Jul 9, 2009 … As you know, the Federal Reserve is subject to frequent audits by … Federal Reserve’s supervision and regulation of such firms as well. …
http://www.federalreserve.gov › News & Events › 2009 Testimony – Cached –
Basically, what this means is there are very passionaite folks in the conservative movement who cherish capitalism. You know, literally. They are the Randian Objectivists and the Cato Libertarians who are as disdainful of crony capitalism from their ideological perch as leftist are from their own.
Indeed, when the powers that be in Washington speak of “moderates” they are speaking by and large of those in both the Democratic and the Republican Party who wink and nod at the notion of “serious debates” on issues like this. The fix is in. Wall Street and K Street, The Congress and the White House. Together they are going to concoct a “compromise” that sustains the interests of those inhabiting the revolving doors between them. Sure, real log rolling does go on and real compromises do take place. But always within the context of state capitalism.
In other words, some Republicans really are principled about these things. They embrace laizze-faire capitalism religiously—as something to be worshipped and adored. They don’t give a shit about the campaign cash.
Well, it’s not at the top of the list, anyway.
I’m still watching whether that populist anti government wave rising on the right might not, soon enough (there will not be a recovery as it would need to be driven by structural changes in the Free Market ideology, – the status quo as represented by Obama.) turn into a populist right wing tsunami, yielding highly questionable results, if the right will be the only ideology to ride that revolutionary/radical crest.
Hey, ya ever notice the word conspiracy contains the two words “cons” -and “piracy”?
Good info from Zero Hedge. This legislation is for show IMHO…just like Fake Medicare
http://www.zerohedge.com/article/thorougly-useless-wall-street-reform-and-consumer-protection-act-passes-along-party-lines
One of the nice things about being settled in the autumn of one’s years is that when the right wing tsunami finally crests and falls I’ll have to endure it so much less longer than progressives in a more youthful demographic order.
Indeed, my daughter will remind me of that from time to time when I yearn to be young again. Sooner or later everything always works both ways I suppose.
But friendly fascism [a smiling Sarah Palin cuddling with Trig in the oval office] will have to wait until things get a lot worse. Should the economy truly collapse…or a string of 9/11s unfurl…the reactionaries will prevail.
We won’t recongnize the Constitution. And FDL will be on borrowed time.
Well, that’s the optimistic version, anyway.
george, just cause there’s snow on the roof,don’t mean there’s no fire in the furnace….and the snowier the roof…well,you get my “drift”.
You’re the one making the claim, you demonstrate it.
here, knock yourself out,
http://www.accuracy.org/newsrelease.php?articleId=2092
Is that really that difficult to figure out … that the fed funds the federal gov’t by pushing money into our banking system and giving the old wink-and-nod to their pals on wall street … which is essentially our banking system with the repeal of glass-steagall … to buy up the treasury bonds to keep the interest rates low?
That’s a mechanism that greenspan used to help to fund the wars while keeping the interest rates low to keep our debt-addicted economy rolling right along. It is a stealth tax, via the eventual inflation due to the increase of the money supply, without representation. It keeps the war machine greased and primed without raising taxes.
The fed is evil and though it is supposed to be independent of our federal gov’t, they are as separable as the fed is to wall street …
Z