Unlocking The Secrets

by digby

Many years ago I read a book called "Secrets of the Temple: How the Federal Reserve Runs the Country"by William Greider. And it blew my mind. At the time Paul Volcker was unioversally hailed as the man who wrung the "excess" out of the economy after the allegedly self-indulgent 70s. And the great Randian apostle Greenspan was just building his reputation as the oracle of economics. Until I read this book I had barely even heard of the Fed, much less understood that the American economy was essentially in the hands of some High Priests, unanswerable to anyone, least of all the great unwashed masses who allegedly aren't equipped to handle something so important as money.

That was over 20 years ago. And a fine mess we've found ourselves in today, all of which could have been predicted if one read the book and took Greider's thesis seriously. But we'd better take it seriously now, for reasons fundamental and political, because the fiscal scolds, the plutocrats and the aristocrats (all pretty much the same people) are about to launch a huge campaign to not only curtail any more domestic spending but cut deeply into "entitlements." And they will do this without ever even looking at the massive amount of money that's flowing out of the Fed right now, completely unaccountable to anyone. They will say that the little old ladies must eat cat food, but nobody can breach the temple of the Federal Reserve because it must remain independent (as if it is independent of the Big Money Boyz who actually run things."

Representative Alan Grayson is trying to change that:

The Federal Reserve has refused multiple inquiries from both the House and the Senate to disclose who is receiving trillions of dollars from the central banking system. The Federal Reserve has redacted the central terms of the no-bid contracts it has issued to Wall Street firms like Blackrock and PIMCO, without disclosure required of the Treasury, and is participating in new and exotic programs like the trillion-dollar TALF to leverage the Treasury’s balance sheet. With discussions of allocating even more power to the Federal Reserve as the ‘systemic risk regulator’ of the credit markets, more oversight over the central bank’s operations is clearly necessary.

This is all taxpayer money, of course. It really doesn't just grow on trees. It seems like a no-brainer to me to demand some kind of oversight for this massive, unprecedented transfer of wealth, for which we only have the Fed's word that any of it will ever be seen again.

Now, the politics of this are odd. Basket cases like Ron Paul and Michele Bachman are backing this for their own kooky conspiratorial reasons. But there is also a method to their madness -- they sense that there is a populist fever building out in the country and they want to own it. This would be a bad thing because these wingnuts are not only crazed demagogues, they have a nasty habit of combining their populism with know-nothingism, racism and xenophobia that's very dangerous. It's a potent cocktail of hate that will not be helpful to anyone.

Democrats will be very, very foolish if they leave this field to the Republicans. It should, by rights, belong to the party that actually gives a damn about the economic survival of average people instead of those who feel that average people should have the "freedom" to starve. But the way it's going, they will have this all to themselves.

Anyway, Grayson is trying to get some more Democratic sponsors for the bill. Jane Hamsher explains how you can help:

Please join me, Glenn Greenwald, Naomi Klein, James K. Galbraith, Dean Baker, Bill Black, Tyler Durden of Zero Hedge, Yves Smith of NakedCapitalism, US PIRG, Public Citizen, Mike Farrell, Digby, Rob Kuttner, Ian Welsh, Bill Greider, Stirling Newberry, ANWF, Les Leopold, Mike Lux and others in supporting Alan Grayson and asking Democratic members of Congress to cosponsor the Federal Reserve Transparency Act.

Where does your member of Congress stand? Find out here. And if they aren't one of the 135 136 Republicans or 30 29 Democrats cosponsoring this bill, why not?

Sign the statement here that will be circulated to members of Congress as Rep. Grayson tries to get the 53 more cosponsors needed to pass the bill. And be sure to check the box if you'd like to have your name publicly displayed on the page.

Keep in mind that when everyone starts moaning and groaning about how we can't afford health care and we have to cut back on education and other "entitlements," the federal reserve will still be writing blank checks to major players in the financial system and nobody knows where its going or why they're doing it. And they will get away with it unless somebody besides some right wing cranks demand it.