Broad Oak: your emotional support animal

Thursday, March 26, 2009

The Federal Reserve is out of control

Here is a very worrisome point:

None other than disgraced senator Ted Stevens was the poor sap who made the unpleasant discovery that if Congress didn't like the Fed handing trillions of dollars to banks without any oversight, Congress could apparently go f*ck itself — or so said the law. When Stevens asked the GAO about what authority Congress has to monitor the Fed, he got back a letter citing an obscure statute that nobody had ever heard of before: the Accounting and Auditing Act of 1950. The relevant section, 31 USC 714(b), dictated that congressional audits of the Federal Reserve may not include "deliberations, decisions and actions on monetary policy matters." The exemption, as Foss notes, "basically includes everything." According to the law, in other words, the Fed simply cannot be audited by Congress. Or by anyone else, for that matter.

For the full horror of the runaway financial train, see the Rolling Stone article here.

8 comments:

Gary said...

Congress is a joke.

Wolfie said...

I was going to post this article with a short commentary but others, and now you have beaten me to it.

I think the key feature in this article is the revolving-door between Goldmans and the Fed (plus other players) coupled with their undue influence on the government through what is simply bribery.

Essentially the USA has become an Oligarchy and the Fed/Goldmans/Morgan chimera is playing the role of the KGB in a Soviet-like collapse scenario. They get to decide who gets to live and who gets to die.

This is principally why there will be no "recovery", this is it, game over.

Sackerson said...

Unusually dark tones, for you, Wolfie.

Gary: time for a new lot, then. The people will speak.

Paddington said...

Wolfie - don't forget that the KGB had the guns. A lot of the oligarchs are now dead or in prison under Putin - they got a little too greedy.

Wolfie said...

Paddington, The eventual arrival of a "strong man" to put things back in the box is inevitable but there may be a long wait with much suffering along the way. However, Russia has been on the ascendance once again mostly because it has substantial oil reserves. The American/Eurosphere revival may be somewhat harder.

Paddington said...

Wolfie - my point is that the industrialists don't have the military in their pocket yet, Blackwater notwithstanding.

Paddington said...

I just watched an interview with Ben Bernanke. He may be a true believer (TM), but I think that he is sincere. I hope that his ideas work.

Paddington said...

I just watched an interview with Ben Bernanke. He may be a true believer (TM), but I think that he is sincere. I hope that his ideas work.