The lead Washington Post editorial noted (and excused) the Fed’s complete failure to understand the dangers posed by the housing bubble (the economy is soooo complicated) and then somehow used this failure as an argument against its housing proposals. The Fed’s main housing proposals were that Fannie and Freddie should make it easier for underwater homeowners to refinance and also that they should look to convert some of their foreclosed properties to rental units.

If the money had been flowing in the other direction, we might be calling it a bribe or at least wondering about money laundering. Imagine if a businessman or banker knew that a government official had an opportunity to loan money out at 5% and made a no interest loan to said government official of $1 million, would we not be VERY SUSPICIOUS of that $50K profit made by the government official?

Remember that swipe fee measure that passed the Senate twice? It lowered the amount credit card companies can charge merchants to $.12 a transaction. It was a stunning victory that retailers (which admittedly includes WalMart but also includes your locally owned business struggling to stay in business) won that battle twice.

Well, lucky for the banksters, they had one more ace in their pocket: The Federal Reserve, which just cut the baby in half and set transaction fees at $.21 plus some anti-fraud amounts.

Imagine if five of the 12 voting members of the Federal Open Market Committee were selected exclusively by unemployed Americans, instead of the current system of having them chosen by rich bank executives.

This could be done.

Arguments supporting design of the Fed mirror arguments in favor of dictatorship.

Tomorrow, Federal Reserve Chairman Ben Bernanke will give an unprecedented press conference after the Federal Open Market Committee releases a statement from their April meeting. Whether Bernanke is trying this to increase transparency or reassure investors with his command of the issues or build public trust in the institution, or whether he’s just making a bad decision, this represents the never-before-seen opportunity for the media to actually question Bernanke about his views on the economy, monetary policy, inflation and jobs. This comes at a time when the Fed is failing to reach both inflation or employment targets for three years running, so Bernanke has a lot to answer for.

Andy Kroll and Nick Baumann have some ideas about what Bernanke should be asked, and I thought I’d comment as well.

Rahm Emanuel is working the phones for the Fed to flip enough votes to stop an audit. Now it’s up to us to work the phones just as hard to help pass the amendment to audit the Fed.

Call the Senate at (202) 224-3121, and then click here to report what happened when you called.

The Fed Chair, Ben Bernanke, intends to fight to preserve the bureaucratic power of the Fed. We know the Fed failed to exercise its responsibilities before the Great Crash, to the detriment of everyone in society, except the financial elites. He should count himself lucky to have a job.

The Fed is statutorily obligated to manage monetary policy for maximum employment consistent with stable prices. Bernanke has done nothing to meet the employment part of the Fed’s obligations. There are people who will.

Sen. Harry Reid made a Friday evening announcement that he would support Bernanke, hoping to head off further erosion in Bernanke’s support. But it may not be enough.