Dean Baker gets this one right. Why Obama is playing obstructionist to Fed transparency is beyond me.
From Politico
The many large issues still up in the air on financial reform. Remarkably, the place where the Obama administration has chosen to devote its energy is protecting secrecy at the Federal Reserve Board.
Sen. Bernie Sanders has proposed an amendment on auditing the Fed, which would allow the Government Accountability Office (GAO) to audit its special lending facilities. This measure would allow GAO to find out who benefited from the more than $2 trillion lent out at the peak of the financial crisis and under what terms. The Sanders amendment is similar in its wording to the audit language that overwhelmingly passed the House.
Reduce...
For some reason this has put the Obama administration into hysterics. They are arguing that the independence of the Fed will be compromised if it has to tell GAO what it did with our money. This is a rather bizarre notion of independence. After all, most of this money was disbursed well over a year ago. The amendment is simply about requiring the Fed to be accountable after the fact. We would be outraged over the Department of Housing and Urban Development spending even $2 million with no accountability. We are supposed to be accept that the Fed can lend out 2 million times with no accountability to the public?
The one argument that the Fed advances to justify its secrecy is that disclosure would place a stigma on borrowing through these sorts of facilities in the future. It is hard to take this one seriously. After the Goldman Sachs crew has been exposed for designing complex instruments intended to sucker its customers into losing billions, are we supposed to believe that they would be concerned about the stigma associated with borrowing from the Fed?
Furthermore, so what if there is a stigma? Will Citigroup and Morgan Stanley's executives put their banks under rather than endure this stigma? What will they tell their shareholders?
Finally, the idea that we should trust the Fed is more than a bit hard to take. The fed blew it -- that is why we have 15 million people unemployed, millions of people losing their homes and tens of millions with life's savings eviscerated. This whole crisis was due to the incompetence of Greenspan and Bernanke. It's long past time that Congress demanded that this crew be held more accountable.
Correction Mr. President, I DID build this, and please give Lurker a hug, we wouldn't want to damage his self-esteem.
Wow, that last paragraph is so bad, it makes Rush look like Stephen Hawking.
Well, it’s the Super-Monroe Doctrine: “Get off our oil, people who dress funny!” - M. Bouffant
"You're a bad captain, Zarde. People like you only learn by being touched, and hard. And you will greatly disapprove of where these men put their hands." - M. Vanderbeam.
Greenspan wanted to keep the debate about the housing bubble quiet.
And @Partha... maybe you don't remember how Paulson went to the Fed over a weekend, asked for over a trillion dollars for TARP, claiming that if we didn't remove toxic assets from balance sheets, firms woud fail and the economy would explode. So he got some money, about $700 billion, and then decided he was wrong, and that the money would be better used by handing it over to the very firms that mismanged the business in the first place... and then he had the balls to claim that disclosing who got the money would hurt the banks.
Greenspan, Bernanke and Paulson (and to an extent, the governeing boards of Fannie and Freddie) took us down this road. And there's plenty of blame for Dems and Reps too, especially those on oversight and regulatory committees that saw this coming.
Correction Mr. President, I DID build this, and please give Lurker a hug, we wouldn't want to damage his self-esteem.
Greenspan, Bernanke and Paulson (and to an extent, the governeing boards of Fannie and Freddie) took us down this road. And there's plenty of blame for Dems and Reps too, especially those on oversight and regulatory committees that saw this coming.
Wrong.
The fault ALSO and MAINLY falls on those who took shaky mortgages and made them into an investment product and then proceeded to sell them while lying about the value of them to the buyers. Once the fall started, as shitty as it is, the ONLY thing the government could do was prop up the banks, since the alternative isn't worth discussing.
And why don't we talk about exactly which people continued to push for less regulation of these industries, shall we? What cottage industry shills about 'intrusive big government' every time they come up with a new way to screw people over, and who do they fund, and who do they pimp for?
But NOOOOOOOO.
Well, it’s the Super-Monroe Doctrine: “Get off our oil, people who dress funny!” - M. Bouffant
"You're a bad captain, Zarde. People like you only learn by being touched, and hard. And you will greatly disapprove of where these men put their hands." - M. Vanderbeam.
The alternative would have been to purchase the MBS directly fromt he banks, in an auction format, and let the banks decide how much of a bath they wanted to take on the securities loss. And your statement really doesn't make much sense, because many of the companies that received the bailout fundsd WERE the ones that were repcakaging the mortgages and selling them.
The proper use of the funds would have been to offer to purchase the MBS, on an auction basis, and let the banks decide how much they were worth. Instead, a few banks got a shit ton of money, and the Fed refuses to disclose how much went to which bank. Can't beleive you're defending that.
Correction Mr. President, I DID build this, and please give Lurker a hug, we wouldn't want to damage his self-esteem.
Barack Obama wrote:I have worked to rebuild trust in government by allowing every American to go online and see how their tax dollars are spent.
Barack Obama wrote:So I'm gratified that a majority of the U.S. Senate, both Democrats and Republicans, voted today to give me the authority to implement the rest of the financial rescue plan in a new and responsible way. I know this wasn't an easy vote because of the frustration so many of us share about how the first half of this plan was implemented. There was too little transparency and accountability,
Barack Obama wrote:Now my pledge is to change the way this plan is implemented and keep faith with the American tax payer by placing strict conditions on CEO pay and providing more loans to small businesses, more transparency so that taxpayers can see where their money is spent,
Torakus, did you purposefully mix statements about the recovery act into a topic about TARP or was it carelessness or ignorance? In any case, you can track the Recovery Act spending online, just as Obama promised. Your first two quotes are about the Recovery Act.
The last is about TARP. And while Obama did make TARP more transparent than it was under Bush I agree more could be done.
