[Welcome William Greider, and Host, Nomi Prins - bev] wiliam-greider-secrets-of-the-temple.thumbnail.jpg

Secrets of the Temple: How the Federal Reserve Runs the Country

William Greider (who really needs no introduction) is the national affairs correspondent for The Nation.  During his 40-year career, he has written for many publications, including the Washington Post, where he was a correspondent for 12-years and eventually assistant managing editor of national coverage, and Rolling Stone, where he wrote a column for 17-years. He also served as an on-air correspondent for six PBS Frontline documentary films, including the 1985 Emmy winner ‘Retreat from Beirut."

His bestselling books include: Secrets of the Temple: How the Federal Reserve Runs the Country (Simon and Schuster 1987), Who Will Tell the People: The Betrayal of American Democracy (1992) and reissued in 2006 (Touchstone paperback) with a new forward, One World, Ready or Not: The Manic Logic of Global Capitalism (1997), Fortress America: The American Military and the Consequences of Peace (Public Affairs 1998), and The Soul of Capitalism: Opening Paths to a Moral Economy (Simon and Schuster 2003.) His latest book is Come Home, America: The Rise and Fall (and Redeeming Promise) of Our Country (Rodale 2009.)

It is my honor and my pleasure to host this salon for William Greider. When I first read Secrets of the Temple, I was working for Bear Stearns in London. It was just after the Asian Currency crisis. And it was before the Fed became a key orchestrator of the Long Term Capital Management bailout, which at $3.6 billion and without a cent of public money is nothing, compared to today’s $7.6 trillion Fed-lead bank bailout through a variety of facilities and other subsidies.  I took the book off the shelf of a friend of mine to borrow.  He went on to become a derivatives trader at none other than, AIG.

I never returned it. I did not know then, exactly how the packaged securities we were creating would take down the general economy, where the banking industry would go, and to what extent the Fed would be its co-conspirator. Nor did I know that through my many moves, I would still have the book, as well as the privilege of meeting the great Mr. Greider.  In addition to his being an incredibly brilliant man, he is also an exceptionally humble and helpful human being – a rare combination. Over the past few years, I have had the fortune of having him blurb my first book, sharing a panel with him, and today, hosting this salon for him.

Secrets of the Temple is THE definitive book about the Federal Reserve. In writing it, Greider not only amassed the most probing body of research about this massively secretive body, he made a significant contribution to society. It is so full of prophetic insights and solid investigative journalism, that to extract any portion of it, for highlighting would be to not do the full opus justice. You must buy and read a copy yourself, if you have not already done so. It is that important.

Greider of course, remains one of the most authoritative and vocal writers about the Federal Reserve. Since Secrets the Temple was written, the Fed’s philosophy hasn’t changed, but the scope for which it uses it powers, has become historically expansive and dangerous.

Indeed, in his most recent piece in The Nation, Dismantling the Temple, Greider wrote: “The Fed is at the zenith of its influence, using its extraordinary powers to rescue the economy. Yet the extreme irregularity of its behavior is producing a legitimacy crisis for the central bank. The remote technocrats at the Fed who decide money and credit policy for the nation are deliberately opaque and little understood by most Americans. For the first time in generations, they are now threatened with popular rebellion.”

And, “The Federal Reserve is the black hole of our democracy–the crucial contradiction that keeps the people and their representatives from having any voice in these most important public policies.

He outlines six reasons why giving the Fed more power, as the recent Obama proposal suggests is such a bad idea, building on the arguments of his prior piece, Obama’s False Reform, where Greider stated, “Congress should step up its investigations of the roots of the financial crisis and slow down the rush to weak solutions–especially the empowerment of the Federal Reserve.

Fortunately, as Greider mentions in Dismantling The Temple, there is a growing body of congress people on both sides of the aisle pushing for new legislation that shine a light on the Fed’s current actions. The proposed bill, H.R. 1207, would give the GAO power to audit the portion of the Fed’s books related to this bailout. It would be a great start, not just to understanding what junky assets the Fed received in return for the money it printed out of thin air, but in constraining this powerful body through shining light on its actions.

Despite the necessity for this transparency and accountability, the Fed, not surprisingly is pushing back. As Greider writes, “Fed chair Ben Bernanke responded with the usual aloofness. An audit, he insisted, would amount to "a takeover of monetary policy by the Congress."”

That kind of insanity, and status-quo protectionism is what Greider, and the rest of us are dealing with. But, at no time has it been more crucial to open the Temple, than today. At no time has the Fed’s power gone so unchecked, or its actions been so expensive and damaging to our collective future.

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