Chizzang wrote:JoltinJoe wrote:
1.Conducting the nation's monetary policy by influencing monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates.
2.Supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system, and protect the credit rights of consumers.
3.Maintaining stability of the financial system and containing systemic risk that may arise in financial markets.
4.Providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system.[/color]
Chizzang's conspiracy theories aside, it's not much of stretch to see the failures of the Fed in performing it's duties and as you point out, the success of Wall Street and consolidation of banking power during this recession.
You can lump Bernie Sanders and Dennis Kucinich right in there with Ron Paul concerning the Fed. A democratic socialist, a liberal democrat, and a libertarian social conservative. Strange bedfellows.
1/2 the truth Joe is worse than an outright lie..!!!
Flaherty presents 1/2 the story as he is directed to do
Flaherty:
Hypothesis: Each of the 12 Federal Reserve banks is a privately owned corporation. Like any firm, their main objective is to maximize profits. They do so by lending the government money and charging interest. They manipulate monetary policy for their own gain, not for the public good. Facts: Yes, the Federal Reserve banks are privately owned, but they are controlled by the publicly-appointed Board of Governors. The Federal Reserve banks merely execute the monetary policy choices made by the Board.
Griffin: Basically, Flaherty is correct as far as he goes. But, he stops short of the entire truth. A half-truth is just as much of a deception as an outright lie.
Flaherty says that the Board of Governors is politically appointed. This is true and it is supposed to make us feel safe in the thought that the President responds to the will of the people and that he selects only those who have the public interest at heart. The part of the story omitted by Flaherty is that the President does not select these people from his own personal address book, nor does he ask the public to submit nominations. With few exceptions, he makes appointments from lists given to him by the staffs of banking committees of Congress and from private sources that have been influential in his election campaign. The most powerful of all these groups are the financial institutions (including prominent members of the Fed itself) and the media corporations over which they have effective control. One does not have to be a so-called conspiracy theorist to recognize the tremendous influence that these institutions have over the outcome of presidential campaigns, and anyone with knowledge of how our current political system works will understand why the President makes exactly the appointments that the banks want him to make. All one has to do to see the accuracy of this appraisal is to examine the backgrounds and attitudes of the men who receive the appointments. While there is an occasional token individual who appears to come from the consumer sector of society, the majority are bankers deeply committed to the perpetuation of the system that sustains them. Anyone who would seriously challenge the power of the banking cartel would never be appointed. So, while Flaherty is correct in what he says, the implication of what he says (that the Fed is subject to control of the people through the political process) is entirely false.
Flaherty is not fond of "the whole story"
there's an entire book of debate between Griffen and Flaherty - about 500 pages
Flaherty is a mouth piece[/quote]
Don't know why the quote thing isn't working, so I'll put my response in bold.
I agree with you completely that, practically speaking, the Federal Reserve is controlled by bankers and view the world from that perspective. And there is no greater example of that its embrace of derivatives trading, and its insistence that this did not need to be regulated. It is accepted as Gospel truth among the Masters of the Universe that the packaging of debt portfolios into securities-like products which could be bought and sold was the best thing since Cocoa Puffs -- because the risk of lending had now been shifted from being borne by the banks onto the financial system as a whole, thereby mitigating risk for all. Well, we see this is now that this is not the case at all; that all this did was encourage enormous risk-taking on the theory that the risk could be mitigated by packaging and selling it like securties. And none of this was regulated. (On the lighter side, it is now somewhat amusing that loans have been sold and packaged so many times, that when a borrower defaults, sometimes the servicer who sues to foreclose cannot find the original paper, often bring the foreclosure case to a standstill. 
).
Take a look at this article from Business Week from some years back. My brother is quoted in this story questioning whether there is sloppy underwriting being encouraged by this system. He is immediately scoffed at by another. The last line of this article really hits home post-breakdown.
http://www.businessweek.com/magazine/co ... 805098.htm
it's an interesting circle jerk
