It’s our money, but the government thinks it’s theirs:
The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.
Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn’t require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.
Good night! We nearly couldn’t set up an automatic bill pay at our bank today because we’ve just moved and my driver’s license doesn’t have our new address. And that driver’s license required an authentic, stamped copy of my birth certificate. Yet the Fed can dole out $2 trillion of our money in exchange for who knows what kind of collateral without disclosure or oversight!
Hey, maybe the Republicans are trying to do the economy on their way out of Washington what the Clinton staff did to the White House when their time was up.
Yeah, that might explain it… except that the Democrats are complicit.
In an interview Nov. 6, House Financial Services Committee Chairman Barney Frank said the Fed’s disclosure is sufficient and that the risk the central bank is taking on is appropriate in the current economic climate. Frank said he has discussed the program with Timothy F. Geithner, president and chief executive officer of the Federal Reserve Bank of New York and a possible candidate to succeed Paulson as Treasury secretary.
“I talk to Geithner and he was pretty sure that they’re OK,” said Frank, a Massachusetts Democrat. “If the risk is that the Fed takes a little bit of a haircut, well that’s regrettable.” Such losses would be acceptable, he said, if the program helps revive the economy.
Frank said the Fed shouldn’t reveal the assets it holds or how it values them because of “delicacy with respect to pricing.” He said such disclosure would “give people clues to what your pricing is and what they might be able to sell us and what your estimates are.” He wouldn’t say why he thought that information would be problematic.
Complicit and incompetent. Some clues to pricing from the Fed would help establish some stability and unclog the credit markets.
God help us, they intend to bleed us dry.