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Comment count is 12
SteamPoweredKleenex - 2009-07-19

There's are several great episodes of "This American Life" about the whole economic meltdown. And if you'll note, a lot of the backers of shooting this down have strong ties to Goldman Sachs, so it's not all "big bad gub'ment" at work here, but private banks using the levers of power to escape scrutiny and regulation.

Which is why I'd love it if these bills making the Fed more transparent required more transparency of private banks as well. If we're going to insure them with the FDIC, they should at least have, on public record, their debt to asset ratios and and the values of assets/liabilities they're tied to.

THA SUGAH RAIN - 2009-07-19

The federal reserve is a private system and the FDIC is paid for by private banks. Efforts to demand "greater transparency" are seen as threats to politicize the fed, which would bring in myopic political forces to a system that demands the longest term thinking. There is nothing wrong with federal reserve transparency by itself, but the specter of the federal government running our banks is so terrifying that even the slightest hint of further politicization is abhorred.

IrishWhiskey - 2009-07-19

"The federal reserve is a private system and the FDIC is paid for by private banks."

Wow. Just, wow.
Both these institutions were created and run by the Federal government (there's a clue in the names). Although there's private participation, the participation is mandated and run by federal law. Claiming they are private entities is like claiming the government has no role running the military.

THA SUGAH RAIN - 2009-07-19

The difference is that the fed is comprised entirely of private institutions and the military is comprised entirely of government employees and 100% government funded.
No government official has any say about what goes on at the fed.
The FDIC is paid for just like any other insurance program, the member banks pay an insurance premium.

ProfessorChaos - 2009-07-19

Or are supposed to, at least. For a great deal of time before this all happened, banks were not paying their premiums, resulting in FDIC being under-funded.
http://www.boston.com/business/articles/2009/03/11/now_needy_f dic_collected_little_in_premiums/

Not that that article really changes too much on the bank, but it is an interesting related factoid.

Cockmaster Flash - 2009-07-19

Jesus Christ, what an amazing amount of fail:

From the FDIC's web site:

"An independent agency of the federal government, the FDIC was created in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s. Since the start of FDIC insurance on January 1, 1934, no depositor has lost a single cent of insured funds as a result of a failure."

>>No government official has any say about what goes on at the fed.

Except the composition of the Board....


baleen - 2009-07-19

Hey Anonymous/cena_mark, did you know that the Fed has been audited MANY MANY times? It's audited every year, in fact,
both by government agencies and by private sector auditors?

It's like a small percentage of very dopey people think Ron Paul is the first person ever to come up with the idea. The reason why it didn't make it through the Senate is because IT DIDN'T NEED TO. Do you think Ron Paul is going to look at any of those previous audits? No, not likely, because Ron Paul is a populist demagogue and something of a lunatic. Sort of like many people in the House of Lords-- I mean, Congress.

"Are the Federal Reserve System and Reserve Banks ever audited?

The Board of Governors, the Federal Reserve Banks, and the Federal Reserve System as a whole are all subject to several levels of audit and review. Under the Federal Banking Agency Audit Act (enacted in 1978 as Public Law 95-320), which authorizes the Comptroller General of the United States to audit the Federal Reserve System, the Government Accountability Office (GAO) has conducted numerous reviews of Federal Reserve activities. In addition, the Board's Office of Inspector General (OIG) audits and investigates Board programs and operations as well as those Board functions delegated to the Reserve Banks. Completed and active GAO reviews and completed OIG audits, reviews, and assessments are listed in the Board’s Annual Report (before 2002, the reviews were listed in the Board's Annual Report: Budget Review).

The Board's financial statements, and its compliance with laws and regulations affecting those statements, are audited annually by an outside auditor retained by the OIG. The financial statements of the Reserve Banks are also audited annually by an independent outside auditor. In addition, the Reserve Banks are subject to annual examination by the Board. The Board's financial statements and the combined financial statements for the Reserve Banks are published in the Board's Annual Report."

THA SUGAH RAIN - 2009-07-19

Cockmaster, I never said the FDIC wasn't a government entity, I was pointing out who pays for it, re:SteamPowered's comment that 'since we pay for it we should be able to see it'. And to imply that the board is acting in coordination with the federal government beyond their appointment hearings is to know nothing about their historical interactions.
Baleen: The FAQ section of the Federal Reserve's webpage does not explain the limitations in place on the GAO audits that Paul and DeMint would like to remove. It also does not explain the important differences between the FOMC, the member banks, the FRS and the FRB which are treated differently in different pieces of legislation. The people crafting this legislation are not dopes, they have intimate knowledge of the finer points of the law and reality of the current situation.
As I've mentioned before, I work in finance, I'm not talking out of my ass, I'm explaining what is fact not opinion.

Sean Robinson - 2009-07-20

Jim DeMint is a right-wing lunatic and a demagogue. Other amendments he has offered this session include adding fetuses to classes protected by hate crime legislation, bar funds to any smoking cessation effort, bar any funds for Amtrak, allow immediate drilling anywhere offshore, bar all funding for the Census, bar funding for any stem cell research (including that allowed by George Bush), bar any federal funding for HIV/AIDS research, bar research grants for plug-in cars, delay a ban on lead contained in children toys and to force the Capitol Visitor Center to contain more references to the primacy of God in the US.

He is one of the worst members of the Senate and his cosponsor on this amendment is noted drunken lunatic Jim Bunning.

Goofy Gorilla - 2009-07-19

Yeah, I think some of you guys might be missing nuance here.

joelkazoo - 2009-07-27

I always love to point out the whole "We got 'In God We Trust' on our money" people who say that's proof against the separation of church and state out to people that said money is NOT government money, but a private interest! The "Federal Reserve" is run by the government the same way "American Motor Company" was run by the government. Answer: not at all.

Nominal - 2020-12-13

Sheesh. All the dummies here repeating "The Fed" conspiracy theories.

Imagine thinking that Jim DeMint, Jim Bunning, and Rand Paul were the smartest people in the room.

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