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Business As Unusual for The Federal Reserve Even After Audit

Senator Bernie Sanders said that the Fed’s bailout programs are “socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.” (This is what makes this such a great recession for those rich ol’ boys with government-issue golden parachutes.) It’s been half a year since the audit that Sanders and Ron Paul pushed for revealed that the U.S. Federal Reserve had  given out over 16 TRILLION dollars in secret loans at zero-percent interest, yet nothing much has changed.

Audit reveals the Federal Reserve not so reserved about cronyism

“No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president,” Sanders said. Yet, half a year later, the Fed continues to run as usual without oversight by the government whose money it puts on the line with giveaway loans for which only the richest can qualify. Of course, the standards for qualification are almost unattainable: you have to have proven you are capable of causing one of the world’s largest banks to fail. Never before have those who clearly cannot manage their own money been given interest-free business loans of everyone else’s money.

Key findings of the audit, according to Sanders, were trillions of dollars loaned and reloaned to foreign banks and corporations all over the world. In that process, the Fed not only has no system for eliminating conflicts of interest, it actually encourages conflicts of interest with a system of “waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.” Federal Reserve Chairman Ben Hankypanky hands these waivers out like indulgences from the pope.

Slick! Directors on Federal Reserve boards are actually appointed as administrators to give out government loans to save their own investments and are given a waiver just to make sure they know it is O.K. What a neat deal! Wish I could have that kind of government hedge fund for my investments. It is like these Federal Reserve guys grew up together in a playpen with its own martini bar. Just think of how many OTHER rich people want to be your friend and play with you when you have trillions of dollars to dole from your fingertips. This is, indeed, the greatest recession on earth. Everyone wants a piece of it.

Is it any wonder that Ben Burnthebanky, ardently petitioned congress not to break up the fun by requiring full disclosure of Fed operations? He knows those cheap tax payers would be spoilsports. And no wonder Newt Gingrich’s campaign is financed by Las Vegas. Washington is the biggest casino on earth, but you have to have enough money to ante up.

An example Sanders gives on his website of conflict-of-interest situations was that the CEO of J.P. Morgan Chase was a director on the board of the New York Federal Reserve at the time when J.P. Morgan Chase was given a $390 billion bailout from the Fed. Likewise, his site reports, “William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds.”

I want a board position on the Federal Reserve so bad, I’m salivating green ink; but I cannot get it because I’ve never helped crash a bank.

Does anyone have reservations about the Federal Reserve?

It gets even better: “The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo.  The same firms also received trillions of dollars in Fed loans at near-zero where to buy zolpidem in the uk interest rates.” And two-thirds of those lending-management contracts were no-bid contracts!

Hey, that’s the same style of crisis resolution that George Bush championed in Iraq. Citizens barely complained then; why should they now? Haliburton got every single oil and reconstruction contract in Iraq while its former CEO was vice president of the United State, and they didn’t have to bid competitively against anyone! Everyone just accepted that they were the best for the job and that they should get ALL the jobs.

The Federal Reserve, in other words, has had sole unsupervised discretionary power to put all U.S. citizens online for more than the entire accumulated national debt from the last 200 years. This has been fine with congress, though, and apparently still is because it continues. The congressional view is that we trust these wealthy titans of banking and finance to act in everyone’s best interest and not their own while managing more money than the world has ever seen in a single pile. The nice thing about being uber-riche is that you don’t even have to play with your own money.

Never in the history of mankind have so few people been given so much money to manage with less oversight than beauty parlor’s petty-cash account. Accounting for the biggest pieces of the 16 trillion dollars, 2.5 trillion went to Citicorp, 2.04 trillion to Morgan Stanley, 1.9 to Merril Lynch, 1.3 to Bank of America, and another trillion was split between the Royal Bank of Scotland and Deutsche Bank. (See report.)

Who will bring righteousness to the Federal Reserve?

Ben Bernanke is the marshall of Dillon, South Carolina where he grew up. Who will bring justice to town when the marshall himself should be questioned? Remember it was Bernanke who coined the term the “Great Moderation” when he postulated in the Bernanke Doctrine, which said we are in a new era, where economic policy has decreased the volatility of the business cycle. You may have noticed the economy has been a lot less volatile since the Marshall of Dillon made that proclamation a couple of years before the Great Recession hit. Who better, then, to trust in managing this crisis than the man who saw that economic volatility was now a thing of the past?

President Obama promised he would dole out change, and he’s doled out a lot of it with the help of his appointees like Ben Bernanke and Timothy Geithner. Broke Obama followed the policies of Bushwack George and put the astute Bernanke in charge for a second term. I always like to know that the guy in charge of the solution is the one who never saw the problem coming.

As for presidential alternatives, Newt Gingrinch sounds more concerned about making sure welfare children clean school toilets than he is about cleaning up the Federal Reserve system, about which he’s said nothing. His largest campaign financier owns and operates a Vegas casino. No one does cronyism better than the mafia. Mutt Romney says he’s best qualified to be president because he’s used government bailouts to make money. Who better to run the government than someone who’s used it? (I’m sure Romney finds Bain Capital an aptly named corporation at this point in his career!) Rick Perry is only smart enough to be Bush’s understudy. So, we can only hope Sarah Palin steps back in the race because she can see the economy from her house.

When I peruse the alternatives for leadership, it’s not hard to forecast that the Great Recession will be great for the rich for a good time to come.

 

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