The coalition that drove the passage of the 2010 Audit the Fed bill was a milestone in transpartisan efforts to seek transparency about the secret emergency loans the Fed issued from 2007 until mid-2010 when the bill was enacted. Jane Hamsher’s FDL Action report rued the fact that Bernie Sanders had cut a deal to water it down, limit the scope, but it was a seriously big accomplishment. It was quite a moment when the Senate passed its version, and Jane declared victory.
The initial 2011 report issued by the GAO was staggering: between $13 and 16 trillion dollars (depending on the source) of loans and guarantees to banks and corporations around the world:
“…including Barclays of the United Kingdom, the Royal Bank of Scotland Group (UK), Deutsche Bank (Germany), UBS (Switzerland), Credit Suisse Group (Switzerland), Bank of Scotland (UK), BNP Paribas (France), Dexia (Belgium), Dresdner Bank (Germany), and Societe General (France).”
The report *also showed* that some Fed officials were given waivers so that they might profit from their stock in different entities receiving Fed largesse. No Chinese firewalls needed here, folks; nossiree.
Following the report, of course, Bloomberg received FOIA-requested Fed documents that told more of the discount-window Fed-loves-Wall-Street story. And boy, were we angry about it. It was going to be just the First Step in holding the Fed accountable, remember?
This week another transpartisan coalition including perhaps 50 Democratic members got HR 459 on the floor for a vote. It passed overwhelmingly, 327 to 98. 97 of the nay votes were Democrats.
Now you might say that they voted their beliefs, but that doesn’t really explain it. The truth is that Steny Hoyer, Barney Frank and Nancy Pelosi whipped the vote, even issuing the following alert that Matt Stoller published at Naked Capitalism:
“Subject: WHIP ALERT – DEMOCRATS ARE URGED TO VOTE NO ON H.R. 459 – FEDERAL RESERVE TRANSPARENCY ACT
This week, the House is expected to consider H.R. 459 – Federal Reserve Transparency Act. This bill directs the GAO to complete an audit of the monetary policy deliberations, actions, and related matters taken by the Federal Reserve System before the end of 2012, followed by a detailed report to Congress. Most significantly, the bill would repeal existing restrictions on the GAO’s authority to perform audits of Federal Reserve monetary policy activities.
Like all other major central banks around the world, the Federal Reserve is an independent central bank, and its monetary policy actions are not subject to approval by the Administration or Congress. While Congress has set out the policy goals the Federal Reserve is to pursue – maximum employment and price stability – the ability of the Federal Reserve to pursue monetary policy independent of political influence is critical to its ability to fulfill its dual mandate. [snip]
DEMOCRATS ARE URGED TO VOTE NO ON H.R. 459.“ (You can read the rest of the criticisms of the Bill at the link.)
Now you may believe that the parts of the 2010 bill that were inserted into Dodd-Frank will take care of the issue of Fed transparency under those rules, and that the OMB will tell us (or Congress) what we need to know.
But given the recent revelations concerning the LIBOR scandal, and reports that Tim Geithner was up to his neck in ignoring the rate-jiggering that was going on, not to mention that Fed official Fabiola Ravazzolo seemed to be colluding (scroll to the end) with a Barclay’s trader in keeping rates low a bit longer so that Unknown Trader could reap some higher profits in a transcripted 2008 phone conversation (h/t: Obey)…how in the hell could 97 Democrats vote against the bill, whipped to or not? Or is that a rhetorical question by now?
And given that the Fed has clearly shown itself to be more interested in saving Wall Street than fulfilling its other mandate of ‘maximum employment’, yet multi-millions of us are who are either unemployed, underemployed, or have left the labor force, discouraged, wouldn’t you think Democrats could have voted for the bill in order to discover more about how this quasi-private Central Bank is enslaving future generations of us with debt that ratchets more and more money to the Plutocrats among us?
Matt Stoller thinks he has an answer to the vote. In his eyes, it’s not really so baffling that the 97 were whipped to vote Nay; after all, it’s an election year… Knowing that the Senate version (SB202) has about zero chance of passing this year, at least, making the House vote more of a major poke in the eye at the Fed’s credibility, or as Dennis Kucinich so artfully said:
“It’s time that we stood up to the Federal Reserve that right now acts like some kind of high, exalted priesthood, unaccountable to democracy.”
Concerning the Fed’s ‘credibility’ theme, Stoller writes (my bolds):
“The Fed hates this, captured as it is by large banks. But the LIBOR scandal and Bernanke’s position as a key actor in the Presidential race have positioned the Fed in such a way that political blowback was inevitable. It is a quasi-fiscal agent conducting its own foreign policy, with swap lines open to foreign central banks without permission from Congress and a regulatory apparatus that is designed to protect the capital structure of the big banks.
If I had to guess, what’s happening here is that the Fed is conducting an aggressive lobbying campaign among Democratic leaders. I described the Fed’s legislative activity in this piece, How the Federal Reserve Fights. The central bank is a powerful agent on the Hill, and the people that run the Fed and the big banks and economics establishment who rely on the Fed want to keep it that way. In 2009, the Fed hired Linda Robertson to lobby Congress. Robertson was the former head of Enron’s lobbying operation and a well-known Democratic establishment player. She is well-suited to run such a lobbying effort against Ron Paul’s bill. She did it in 2009 and 2010. I checked her campaign contributions, and she maxed out to both Hillary Clinton and Barack Obama in 2008, while also being quite savvy about distributing money to both parties when necessary (here’s her work at Enron engaging in what looks somewhat close to bribery). Being a key lobbyist for Enron might disqualify you for a job requiring integrity, but it is apparently a mark of prestige in DC to have that on your resume. It means you have juice, the ability to bring in money, and you’ll always be discrete about the deals you cut. Steny Hoyer, the Democratic whip, listens to people like Robertson.”
But…heh. He adds that even with the whipping, about half of the Dems voted for the bill, showing how weak the leadership really is.
God, I loathe electoral politics. And who knew the Fed hires lobbyists? Okay, it’s likely just my naïveté, but…sheesh. An Independent Fed? Gimme a break. Speaking of issues that should not to, but have, fallen prey to partisan politics, this satirical piece by Charles Davis at The New Inquiry (h/t: Glenn Greenwald) is simply one of the best pieces I’ve read in a long time. It’s titled ‘Drone Court Advantage’; it’s magnificent, imo; pass it along.
I’d like to thank the 89 Dems who did vote for the bill, and Jane Hamsher for her work on the 2010 bill; she took an incredible amount of heat for it.
And don’t forget: We are many; they are few, and we should start acting like it. ;o) And again, we must ask, even issue by issue: Which side are you on?
(to be cross-posted at kgblogz.com)