{"id":2799,"date":"2011-12-01T11:55:23","date_gmt":"2011-12-01T16:55:23","guid":{"rendered":"http:\/\/www.multiplier-effect.org\/?p=2799"},"modified":"2011-12-01T11:55:23","modified_gmt":"2011-12-01T16:55:23","slug":"time-to-demand-transparency-and-accountability-at-the-fed","status":"publish","type":"post","link":"https:\/\/blogs.bard.edu\/multiplier-effect\/time-to-demand-transparency-and-accountability-at-the-fed\/","title":{"rendered":"Time to Demand Transparency and Accountability at the Fed"},"content":{"rendered":"

In its continuing series on the Fed\u2019s bail-out of Wall Street, Bloomberg estimates<\/a> that the banks got a $13 billion hand-out from the Fed\u2019s easy lending terms.<\/p>\n

Using the excuse of the crisis, the Fed lent funds at near-zero interest to the banks. This was supposed to encourage them to begin lending to firms and households, to spark economic growth and recovery. Of course, the problem with that scheme is that households were already underwater with debt (hence, the recession), firms had no sales hence no reason to borrow to increase production, and banks were loathe to lend to households and firms that face a bleak future on account of Wall Street\u2019s crashing of the economy. So instead, banks mostly bought Treasuries and played the yield curve\u2014earning more on Treasuries than they had to pay the Fed. The $13 billion subsidy directly created by the ZIRP (Fed\u2019s zero interest rate policy) directly created $13 billion of extra profits that Wall Street could then use to reward the same genius CEOs that created the crisis. Nice synergy.<\/p>\n

The same Bloomberg article reports that the bail-out itself cost $7.77 trillion\u2014a lucky string of sevens if you happen to be in the top 1% and work on Wall Street. This is based on the secret Fed documents that Senator Sanders managed to force Bernanke to release\u201425,000 pages worth. I do not know how Bloomberg came up with that number. The true number is almost four times bigger\u2013$29 trillion based on careful analysis done at UMKC. In any event, 7 trillion is a big enough number to raise eyebrows. It is more than 10 times the Treasury department\u2019s $700 billion TARP program that Paulson managed to get out of Congress (after holding a loaded gun to his head and threatening to blow his brains out if Congress didn\u2019t give him the money with no strings attached; Congress wouldn\u2019t blink so he had to come back on hands and knees). But it is not just the size that is shocking\u2014it is that the measly little $700 billion was subject to Congressional approval and oversight, while the Fed\u2019s bail-out (whether $7.77 trillion or the more likely figure of $29 trillion) not only was never approved, nor overseen by Congress, but it actually took an act of Congress to get the Fed to fess up to its largess.<\/p>\n

(Read the rest here<\/a>)<\/p>\n","protected":false},"excerpt":{"rendered":"

In its continuing series on the Fed\u2019s bail-out of Wall Street, Bloomberg estimates that the banks got a $13 billion hand-out from the Fed\u2019s easy lending terms. Using the excuse of the crisis, the Fed lent funds at near-zero interest to the banks. This was supposed to encourage them to begin lending to firms and […]<\/p>\n","protected":false},"author":208,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,40],"tags":[7,1129],"class_list":["post-2799","post","type-post","status-publish","format-standard","hentry","category-financial-crisis","category-monetary-policy","tag-federal-reserve","tag-financial-crisis"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/2799","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/users\/208"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/comments?post=2799"}],"version-history":[{"count":6,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/2799\/revisions"}],"predecessor-version":[{"id":2805,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/2799\/revisions\/2805"}],"wp:attachment":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/media?parent=2799"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/categories?post=2799"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/tags?post=2799"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}