I spoke recently with Barney Frank, Chairman of the House Financial Services Committee, and asked him about the Federal Reserve Transparency Act, which would give the GAO the authority to audit the Fed and report its findings to Congress.
I asked him if he supported the bill. "Not in every exact detail," he said, but he indicated that he was in favor of giving Congress more ability to oversee the Fed.
I also wanted to know if there would be committee hearings on the bill. He said that before the August recess "there will be a hearing on that particular bill and others," both in Mel Watt’s Subcommittee on Domestic Monetary Policy and Technology and Dennis Moore’s Subcommittee on Oversight and Investigations.
The President has said that he believes that the Fed should get more power, and that it is "accountable and clear when it comes to these large systemic firms that could potentially bring down the entire financial system."
But this puts him at odds with the 237 bipartisan cosponsors of H.R. 1207, well in excess of the 218 needed for a majority in the House.
The video above, which has now been seen over 830,000 times, shows Federal Reserve Inspector General Elizabeth Coleman being questioned recently by Rep. Alan Grayson. She could not say which banks had received trillion dollars in Fed lending, what losses the Fed had suffered on its $2 trillion portfolio, did not know that the Fed engages in trillions of dollars in off-balance-sheet commitments, and had no plans to investigate role of the Fed in allowing the collapse of Lehman Brothers.
This is the woman who is in charge of inspecting and reporting on the Fed. It’s no mystery why members of the House disagree with the President, and don’t believe that the Fed is sufficiently "accountable and clear."
5780 people have endorsed Grayson’s efforts to bring accountability to the Fed, including Dean Baker, Naomi Klein, Bill Greider, Tyler Durden, Bill Black and Jamie Galbraith.
Related posts:
- Fourteen More Cosponsors Join Alan Grayson, Sign On to Federal Reserve Transparency Act
- Under Pressure, The Federal Reserve Goes Populist
- Lieberman Whines About Photos, Barney Frank Wants Hearings
- The Federal Reserve was Asleep at the Wheel on Systematic Risk
- Bill Black is Right: Federal Reserve = Oversight FAIL
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Barney’s gonna hold hearings. We’ll know at the end of them just what we know now plus whatever the blogosphere picks up on its own cuz nobody in Congress wants to really find out what the Fed and its bankster cronies have been doing.
The banking lobby is currently most likely preparing questions for the committee to ask. Congress is awating its instructions.
OT – so I just tried to link to a firedoglake post on my Facebook profile and it won’t go. When I removed the link and just posted my comments it worked fine.
Anybody else having that problem?
Barney Frank is an incompetent imbecile. Why anybody gives that moron any credibility is beyond me. It was his great leadership (or lack of) and congress’ ineptness that let Fannie Mae and Freddie Mac go unchecked for many years and is the root cause of this economic downturn.
OT
We’ll see.
Can’t help ya. Haven’t tried that.
No doubt, as always, the disappeared money will be funding the next covert war.
No, the disappeared money has purchased vacation homes on the French Riviera, outrageous yachts and tons of diamonds and emeralds. Our govt borrows money to pay for its wars. Those loans are serviced by the American taxpayer, minus the tax exempt top 5%.
and wars, too.
It’s known that a portion of the Abramoff-embezzled funds have gone to fund illegal West Bank settlements, adding to the destabilization of the region. Dirty money is always easier to sink into covert activies.
oh goody .. jane on teevee .. u go jane !!
“accountable and clear when it comes to these large systemic firms that could potentially bring down the entire financial system.”
While I suppose that I support oversight of the Fed, I do so as the least-best solution to a problem that is exemplified by the remark above.
Why should any firm be allowed to threaten–and thereby control–the economy? Whatever happened to the antitrust laws?
I have a hard time understanding “systemic” as anything except “anti-competitive” and “monopolistic”. A firm that commands a large enough share of a market for its bankruptcy to threaten the stability of the market is a firm that has amassed far, far too much market share. A company that can’t fail is no longer subject to the most basic of competitive pressures. It is no longer operating in a free market and is thereby no longer entitled to any of the protections that we grant private enterprise.
So we need to do one of two things: either we break up firms that present these “systemic risks” or, if breakups prove impractical, we recognize the de facto end of free enterprise in the financial sector and nationalize the big firms.
The approach proffered by the President and Mr. Frank seems instead to institutionalize the untenable current situation. It would maintain the monopolies, guaranteeing profits to their proprietors while shifting all risks and losses onto the public. By anyone’s standards, this approach is worse than any of the alleged evils of socialism: it effectively allocates public monies for the use of a well-connected private few.
So we need much more than audits of a Federal Reserve that concentrates even more power in the financial secgtor. We need antitrust laws with teeth and the resolve to use them. Or we need the resolve to call the proverbial spade a spade, admit that private-sector finance can no longer exist, and complete the nationalization of the banks.
Every time the E. Coleman vid surfaces, and I try to watch it, the audio is inoperative, with a scratchy mechanical sound in place of the audio from the hearing. I have never had that problem using YouTube, so I don’t know that I will ever enjoy the humor of her lame performance.
Anyone know of a transcript?
Out of all the things wrong with our banking system, I would like to focus on just one.
WTF is “off balance sheet”?
Every time you get meltdown in the financial markets, peel back the onion and you’ll find “off balance sheet” right there grinning at you.
Enron, Worldcom etc. “off balance sheet” was right at the heart of everything bad.
Here’s an idea — let’s try “On the GD balance sheet”.
Let’s see how that works for a change.
Oh, and I forgot our most recent wars, until now they were “off balance sheet” as well.
I just tried and it worked for me. Where it says “What’s on your mind?” I clicked on Link and pasted the URL, then clicked Attach.
Off topic a bit, but the likely reason for the push back on barofsky (http://www.chicagotribune.com/news/nationworld/la-na-tarp-inspector19-2009jun19,0,3962261.story?obref=obinsite) in investigating the tarp program was that he was starting to look into the aig bonuses that caused a temporary … too temporary … public uproar. The likely reason that the investigation into the aig bonuses coincided with the treasury’s push back was that geithner claimed to not know anything about the aig bonuses until shortly before they were given out. Meanwhile, the ny fed had knowledge of those bonuses long before when they were originally structured WHILE geithner was head of the ny fed although he insisted that he personally knew nothing of them … which is very likely bullshit and hence the reason for their sensitivity into investigating this matter.
Z
Still are, no? Isn’t that what the latest supplemental did — fund more of the war off the books?
Thank you for writing about and supporting HR 1207.
But it continues to astound me that Paul is almost never mentioned in connection to his very own bill. Oh, yes, I understand the purpose of this post and whatever gets the message out and in support for HR 1207 I’m all for. Just pointing out an obvious omission.
Matt Taibbi has discovered, it was Goldman Sachs who destroyed the economy. Goldman Sachs chief thief Lloyd Blankfein is very proud of himself and Goldman. Taibbi promises more in the next issue of Rolling Stone.
Alan Grayson simply kicks ass. Has nobody figured out yet that when you appear before a committee or sub-committee that he’s seated on, that you are going to get a reaming that you’ll remember forever? Why not prepare?
I love him. If I never go to his district again (I hate Orlando, and it will only be at the point of a loaded gun), it’ll be a day too soon, but I’ve got to hand it to the citizens of central Florida that elected this man. I don’t know about his fashion sense, but then I myself have long been accused of having no fashion sense…
I say that we need a few more progressively-minded trial lawyers in the House. Think of all the Perry Mason moments…
R.Frank is a partner of Geithner and Bernanke,it’s a waste of time and a farce, it’s time to audit the Federal Reserve.
In my opinion, the root of the financial problem is the Federal Reserve, since Greenspan and now with Bernanke and Kohn, these neocons have only one goal : to keep America addicted to imported oil and gas and with the Middle East as reserve of last resource ( Saudi Arabia, Qatar, UAE, Kuwait ,etc. ) and with only one strategic partner in the region ( Israel ) : these countries get all our money,all our weapons and all our attention while they have never worked or pay taxes here in the USA , and these neocons now include Rattner, Emanuel, Axelrod, Summers, Geithner , Orszag, Bernstein ,Shapiro and Furman , among others , and who are the ones who just put a Director of ExxonMobil as chairman of G.M., mr.Whitacre, absurd !
ExxonMobil now uses Qatar for 35 to 70 % of its gas resources on any given day , so we are stuck !
and the Fed is the one backing the new regulations where privately traded derivatives still are un-regulated,so the ” shenanigans ” and FINANCIAL DIRTY TRICKS WILL GO ON ….will the President agree to that ?
That’s why America must demand that Congress passes the Bill H.R. 1207 and S. 604 , http://thomas.loc.gov/home/thomas.html , from Congressman Ron Paul , http://www.ronpaul.com/on-the-…..e-hr-1207/ , http://en.wikipedia.org/wiki/Ron_Paul , and that gives the Congress the Authority to audit the Federal Reserve , because if there is no fraud,abuse, theft and crimes, why not open the ” books ” of the last 30 years ?
President Obama and Vice-President Biden must remember that if they don’t also demand this full Federal Reserve Audit , they will get the blame later for the neocons crimes…..as usual because these neocon’s friends control the Media in the USA, so they choose the scandals and the news, and with Leibowitz ( confirmed) in charge of the FTC, they will control even blog content, and with the http://www.bbg.gov/ run by ( appointee? ) Isaacson, who at Time magazine pushed non stop for the Iraq War, imagine the warmongering message from America to the World, what a nightmare ! the worst neocon warmongering pack controlling our Free Speech !
And as long as these political-military neocons also control the ” Federal Money Machine ” , we will not get new battery technology, or electric-hybrid E-85 plug-ins, or fuel-cells, or advanced solar, or wind and wave, or geothermal energy , or the vital smart grids, or much less rural broadband, we will only get more monopoly and more abuse.
and also because : a) Genachowski, the next FCC chairman is a member of the Barry Diller-Rupert Murdoch-Sam Zell-Slim Helu-Haim Saban neocon media group and key financial backers of Netanyahu , who was in D.C. this week to secure his agenda and to link in person to the neocon network in D.C…….so there will be less Free Speech, less Net Neutrality, less choices in wireless, less rural broadband, less wireless open markets applications and less U.S. Constitution and lots more lobby’s and exclusive deals , and that’s why the D.C. Establishment is so excited about it : they are planning a new captive “Christian Palestine” right here in the USA , what a pack of incompetent traitors !
b) the FCC must review choices for mobile phone payments, and with Genachowski and McDowell , another darling at the FCC that already sided with some cable monopolistic views , they will give away the “fabricated monopoly” of mobile payments to their friends in the Hedge-Fund world close to the above investors network, isn’t wonderful ?
c) the mobile phone payment system will become a virtual bank, broker, middle man and adviser with huge power over selection of goods and services , and here Genechowski and the new FCC leadership ( ??!!! ) will deliver the goods to friends and partners …..the only thing we know for sure now is that all of them will be very rich after they leave the FCC, that we know !
d) and they will say that the new Consumer Financial Protection Agency has no say in all this, this is all between Genachowski, Geithner,Bernanke and the Diller-Murdoch-Zell-Helu-Saban group, what a wonderful exclusive deal !
Already we see how little work the Congress wants to do about the “Stupid TV” Networks, which is brainwashing the kids in America and using the “free-of -charge-to-the networks” taxpayers owned spectrum airwaves to do it , already we see how menthol-tobacco is out of the FDA regulation even when is the emphysema-cancer first source , how little they really do against junk foods in and out of schools, just look at the ding-a-ling trucks loaded with junk foods waiting outside schools to take away every dollar from the kids in exchange for sugary and junk loaded foods, and no one is doing anything ! we see the pattern, we see the lobby’s waiting for the staff of the elected officials, we see how even the key staff in some “Leaders” offices are neocons of the AIPAC lobby and controlling the access ,messages and the news that reach these politicians, we see the corruption and the manipulations !
To America’s Youth : Kids, run for office !!!! run in local elections, in Town, County and State elections, run !!!! because if we don’t get a new spirit in D.C., we will lose this great country.
I would like to ask again P.Obama and VP.Biden when are they going to get all these neocons out of their Administration and the White House, when ? …..because again, they will blame P.Obama and VP.Biden for this mess and others in the spring of 2010, like G.M. not having the Volt ready ( it will never happen , it’s all a lie ) , like still not having young crews manufacturing and learning to install solar , wind and geothermal systems, nothing !!! …As many are saying, even the Pentagon can’t even get synthetic fuels going for their own military fleets !
and all this will make them, P.Obama and VP.Biden , look like losers for the elections, so when are they going to see the backstabbing ahead ? when ? the first step is to audit the Federal Reserve.
When the Republicans were in charge of Congress THEY chose not to do anything about Fannie & Freddie. Blame them if you must.
If you combined ‘off-balance-sheet’ with ’shadow banking system’ and ‘naked Credit Default Swaps’ you’d probably discover the main thing for these businesses is getting around law/regulations, so they can hide losses, leverage up more, risk more and make bigger profits.
Aside from the domino effect of ‘too big to fail’ firms, this lack of government regulation of ALL financial firm activities is most important.
The off-shore and tax-haven stuff is another animal, but also needs to be looked at eventually.
Looking first at what is broken and prevents our current system from working is important. That’s the triage principle. Once the patient is stabilized you begin to look at important basic functions to see if they’re seriously impaired. I’m not entirely certain Geithner’s latest proposal even addresses all of the first step.
Let’s see what Dodd & Frank have to say about the issue.