Tuesday, August 25, 2009

Ending the Fed: A Crack in the Ice

The Federal Reserve has been ordered by U.S. District Court Judge Loretta Preska to disclose information related to its "emergency lending" program.

If you'll recall, when the bank bailouts began happening, we were treated to some pretty juicy quotes when the bankers themselves were asked exactly how they were utilizing the funds they received:

"We're not providing dollar-in, dollar-out tracking."

-- SunTrust Banks spokesman Barry Koling on the receipt of $3.5 billion

"We manage our capital in its aggregate."

-- Regions Financial spokesman Tim Deighton on the receipt of $3.5 billion

"We've lent some of it. We've not lent some of it. We've not given any accounting of, 'Here's how we're doing it.'"

-- JPMorgan Chase spokesman Thomas Kelly on the receipt of $25 billion

Almost unimaginably, Bloomberg was unsatisfied with these types of responses, and filed a Freedom of Information Act request aimed at the Fed, which has since become a lawsuit.

The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under 11 programs, most put in place during the deepest financial crisis since the Great Depression, saying that doing so might set off a run by depositors and unsettle shareholders. Bloomberg LP, the New York-based company majority-owned by Mayor Michael Bloomberg, sued on Nov. 7 on behalf of its Bloomberg News unit.

“The Federal Reserve has to be accountable for the decisions that it makes,” said Representative Alan Grayson, a Florida Democrat on the House Financial Services Committee, after Preska’s ruling. “It’s one thing to say that the Federal Reserve is an independent institution. It’s another thing to say that it can keep us all in the dark.”

The judge said the central bank “improperly withheld agency records” by “conducting an inadequate search” after Bloomberg News reporters filed a request under the information act. She gave the Fed five days to turn over documents it told the reporters it located, including 231 pages of reports, and said it must look for more at the Federal Reserve Bank of New York, which runs most of the loan programs.

While I will imagine that the Fed is going to appeal this as far as it possibly can in order to stall the process, if not turn it back, this is a fantastic blow to the shadowy organization. The Bloomberg article calls it what it is: a wake-up call to the American people.
“The public deserves to know what’s being done with the money,” said Lucy Dalglish, executive director of the Arlington, Virginia-based Reporters Committee for Freedom of the Press. “This ought to be a wake-up call for the public that they need to be far more educated about this.”
I've been educating myself about the Federal Reserve more and more since I began writing this blog back in January, following primarily the effort to begin the process by Auditing the Federal Reserve via HR 1207. Will you educate yourselves?

Here are some of my posts about the Fed to get you started:

America: Freedom to Fascism
Change We Can Believe In
Truth on Taxation
Federal Reserve: WTF?
History in the Making: HR 1207
Our Monetary Policy is Eroding Our Freedom

Start Googling. The history of the Federal Reserve is fascinating enough in and of itself to keep you interested. And if you have even the tiniest stream of desire for a true republic, for actual liberty, you will begin to devour information about this organization and our monetary system voraciously. Who knows, you may even look into the book many are saying will be one of the most important of our time.

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