Ben Bernanke's collar might be feeling a little more like a noose today, after the U.S. Senate voted 96-0 in favor of authorizing a GAO audit of the Federal Reserve's emergency aid measures, including the full disclosure of all recipients of the $2 trillion and counting the Fed has doled out. The Fed has fought this tooth and nail, threatening to go all the way to the Supreme Court to avoid disclosing this vital information.
"We are on the verge of lifting the veil of secrecy on perhaps the most important government agency in the United States of America," said independent Vermont Sen. Bernard Sanders, the proposal's chief sponsor, "an agency which has control and spends trillions of dollars. They do it behind closed doors."Under his plan, Congress' Government Accountability Office would conduct "a top to bottom audit of all the Federal Reserve's emergency activities" since the economic crisis began in December 2007. The Fed also would have to post on its website all recipients of money from the more than $2 trillion in emergency aid will that's been disbursed since then.
The GAO is also going to be looking for conflicts of interest. Anyone want to place a bet on whether they find any? Jumping on the bash Goldman Sachs bandwagon, Bernie Sanders is also hoping the audit will uncover any undue influence the bank may have had on the Fed rescue of AIG.
"I want to know, and I think the American people want to know, why Lloyd Blankfein" - Goldman's chief executive - "attended a meeting at the New York Fed when the federal government decided to bail out AIG to the eventual tune of $182 billion," Sanders said, "allowing Goldman Sachs to pocket $13 billion of that money."
If nothing else, it will be interesting to see if this actually happens.
It's about d*mn time.
It should be regularly audited.
The activities of the Fed allow us to do all sorts of insane things: fund wars across the globe, bail-outs banks, inflate away our currency, prop-up massive entitlement programs, steal from future generations and retirees simultaneously...
It's great to see republicans jump on board with Sanders; if they are going to even THINK of regulating private banks, they need to be able to at least AUDIT the FED, I mean shit Senates not asking to limit their operations like they will be doing for banks, and if anyones behavior needs limiting its the Fed.
Who scores the $$ on that audit. I guess PWC lobbyists did their job.
I think they are going to hire Enron to do the audit
You probably mean Arthur Andersen.
Personally I am a proponent for an Independent FED. So although an audit in this scenario seems OK- It could lead to more political pressure/influence on the FED.
Imagine our democratic senate (senate governs the FED) with control of monetary policy... wow right
What do you guys think will be some of the unintended consequences of such an audit?
I read a really interesting research report the other day that basically claimed that full disclosure only helps special interest groups. The argument is that with mass public being both inattentive to substantive political information and unmotivated to exercise political rights, special interest groups (which are highly attentive and motivated) begin to dominate the political agenda. In addition, with politicians that are focused on reelection, they will balance pandering to the will of the people and negotiating in the interest of special interest.
I don't necessarily agree, but I thought it was an interesting thought process.
True, nobody from the general public will be paying attention to the results of the audit. However, the minute the media picks up on some scandalous or outrageous finding, the public will be outraged.
And that would be the best thing for Wall St right now, it'll prove to America that someone needs to fix WASHINGTON before they try and fix anything else. Washington holds everything to a double standard and assume the rules don't apply to them because they are the government (some cases this is OKAY) but the FED PERPETUATES that mentality, and that mentality has to stop.
This audit is going to cause a lot of problems for a lot of people, and I'm glad they're doing it. These fuckers need to be held accountable
This whole 'audit the fed' process is no doubt going to turn nasty and I don't blame Bernanke for fighting to stop it. If congress goes through with it, they'll only push for further and more frequent audits, which will threaten the fed's independence and ability to perform necessary open market operations. I don't know about everyone else, but giving congress the power to audit the fed or really any significant power over it disturbs me. Congress should have no influence over monetary policy lest they fuck it up like they do most everything else.
yeah, cause the Fed has done SUCH a great job, right? Give me a break.
I think your post is a bit misleading Edmundo. The audit that was championed by Ron Paul was not passed. Paul was supporting the Vitter amendment, but it failed 37-62. Instead, the Sanders amendment was passed 96-0.This is not the victory that Ron Paul was hoping for after all that audit the fed talk.
http://www.campaignforliberty.com/article.php?view=842
Yes, you're right. At this point I'm happy to see any victory on the anti-Fed front.
I'm not a die-hard fan of central bank independence, but what the fuck, guys? Is this casual conspiracy theory Wednesday or what?
Bernanke is not an Illuminati, he's just a damn academic who thinks the Fed should remain somewhat independent (actually it's not even that independent).
Nobodies taken over the FED, jesus, talk about conspiracy theories.
It's an Audit, and completely bi-Partisan.
Government Transparency is a core principal of American Political ideology, and in the past two years the FED has been the largest machine in Washington.
What is this suppose to prove though? What did the Iraq and 9/11 investigation panels prove?
The Fed is like the CIA, they made the market bounce back, they did what need'ed to be done. Why do you all want the details so badly?
^^^ Because this information is actionable information. Once it's disclosed which banks needed the most help, the shorts can drive them right out of business (which is where they should have been in the first place).
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