Begich Sides With Senate Republicans
Mark Begich has become the first Democrat to side with Republicans on a big bill coming up in the Senate. This bill is sponsored by Rand Paul (R-KY), and has listed among its co-sponsors Republicans David Vitter, James Inhofe, and Jim DeMint. And I’m tickled pink.
See, you thought I was going to be all mad, and say that I had a bone to pick with the Senator. Gotcha!
U.S. Senator Mark Begich has added his voice to those calling for an additional audit of the Federal Reserve by the General Accounting Office (GAO). He signed on to the bill this past Tuesday and is the first Democrat to join 31 Republicans in co-sponsoring the Federal Reserve Transparency Act of 2011 (S.202).
See for yourself the list of co-sponsors ——–> CLICK
There’s all manner of Republicans who have co-sponsored this bill, including Lisa Murkowski, so yes, she did good too. But Senator Begich deserves and extra kudo for actually (GASP) being the first of his kind to step over that bright line and agree with someone on the other side when they were right. And it appears as though the Senator who signed on to the bill Tuesday, has actually lived to tell the tale.
Senator Bernie Sanders (I-VT) reported last year, on his website, after the first audit was completed:
The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. “As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world,” said Sanders. “This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.”
It was also found that the Fed basically ignores conflicts of interest. Go figure. They even gave employees and private contractors “conflict of interest waivers” (I’m not kidding) so they could keep their investments in the same corporations and institutions who were receiving emergency loans.
For example, the CEO of JP Morgan Chase served on the New York Fed’s board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed’s emergency lending programs.
In another disturbing finding, the GAO said that on Sept. 19, 2008, William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds. One reason the Fed did not make Dudley sell his holdings, according to the audit, was that it might have created the appearance of a conflict of interest.
Yes, nothing says “conflict of interest” more than, well… conflict of interest.
The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo. The same firms also received trillions of dollars in Fed loans at near-zero interest rates. Altogether some two-thirds of the contracts that the Fed awarded to manage its emergency lending programs were no-bid contracts. Morgan Stanley was given the largest no-bid contract worth $108.4 million to help manage the Fed bailout of AIG.
The secrecy, lack of transparency, and corruption in the Federal Reserve has put it in the dog house with Occupy Wall Street, the Tea Party, Conservatives, Progressives, Bernie Sanders, Ron Paul, and many others from one end of the political map to the other. In these troubled times of divisive politics, when nobody can seem to agree on anything, that’s pretty impressive to say the least.
“I have long been an advocate for transparency in government in general and the Federal Reserve in particular,” Senator Begich said. “I believe in the independence and dual mandate of the Federal Reserve to control inflation and lower unemployment, but its actions should not be shrouded in mystery. The American people have a right to understand the inner workings of their central bank.”
To his additional credit, Begich previously supported a bipartisan amendment to the Wall Street Reform and Consumer Protection Act which required an audit of emergency credit programs and potential conflicts of interest at the Federal Reserve. He also joined other Senators in demanding the Fed release the identities of banks and other financial institutions that took out loans during the financial crisis under the Troubled Asset Relief Program (TARP).
Begich is also an original cosponsor of the Federal Reserve Independence Act (S.3219), which would prohibit CEOs of big banks from serving as directors of Federal Reserve banks, and vice versa. As it stands, eighteen former and current members of the boards of directors of the Federal Reserve banks were affiliated with banks that received emergency loans from the Federal Reserve System during the financial crisis.
If your Senator has not signed on as a co-sponsor of S202, right now is the time to get on the horn, or write an email, or otherwise let them know you are watching, and you want accountability. This is the best opportunity we’ll have in the foreseeable future to continue this broad-spectrum push for accountability.
S202 is also something that will let you sing Kumbaya with all the coworkers and relatives with whom you normally have nothing politically in common. So, Monday when you go to work, you can have a grand old time going up to that Ron Paul guy at the water cooler and saying something like, “So, how awesome is it that Begich is co-aponsoring that Audit the Fed bill? Those bastards.” Then you can have a good chuckle and break donut with the opposition.
You guys make it seem like its some partisan bill. Its not a bill that the republican cacaus all screamed for. Ron Paulw as the one psuhing for it for years their sorta bandwagon hoppers.
Think of this…100 Dems voted for the House version of the bill. Harry Reid himself has repeatedly called for an audit for years and years..well until now. Sorta like how he was against raising debt ceilings..until now amongst other position changing votes.
Ahh well thats politricks for ya.
The Alaska delegation is going to need energy votes next session.
Since I’m being critical of Sen. Begich for signing on to a stupid Republican bill, I should say something nice: the Federal Reserve Independence Act, which you mention in this post, is great, and he deserves credit for taking the lead as an original co-sponsor. This is federal legislation as it should be: specific, clear, and above all meliorist: it remedies a major flaw in the existing system without tearing down the walls of the temple (which is what the audit-which-is-not-actually-an-audit in the Paul bill would do). Note that *this* is the reform-the-Fed bill that Sen. Sanders is sponsoring this year, and as you can imagine is 100x better than something written by Ron Paul and his idiot son.
http://www.nytimes.com/2012/09/17/opinion/krugman-hating-on-ben-bernanke.html?partner=rssnyt&emc=rss&_moc.semityn.www
The Fed has the power to mitigate and even end the depression we’re in. The GOP is frantic that Bernanke will actually do something to improve the economy in an election year.
We can wait until Obama is re-elected before investigating the banksters who have infiltrated the Fed. Oh. You think the GOP will suddenly lose interest, then?
One should be careful with this one. The right wing of the GOP has always wanted to do in the Federal Reserve Bank, which is something that we, as a nation, must have. If I were Senator Begich I’d smell a rat and be very cautious about siding with the GOP on this or any other issue.
Posted this on yr Facebook wall, Jeanne, but I think it bears repeating here:
Not to sound like a blindly partisan hack, but if the entire House GOP delegation supports a bill–as in, Michele Bachmann, Ron Paul, Louis Gohmert, and Steve King all think it’s a great idea–it’s probably stupid. So too with this one.
Why? Well, the Fed is already “audited,” both by an independent auditing firm annually–which then publishes its results as a matter of public record; and by the GAO, who has access to all of the transactions the Fed makes/has made. What GAO does *not* have acccess to is the internal decision-making process which lead the decision-makers at the Fed to make these transactions (which, again, are already a matter of public record). Ron Paul’s bill would change this, allowing GAO folks to sit in on internal Fed meetings and report back on it to Congress, in turn empowering Congress to influence monetary policy to a much greater degree than they do now.
But why is this bad? Greater control of our monetary system by elected representatives of we the people–what’s not to like? What’s not to like is that monetary policy–perhaps moereso than a lot of other policy stuff–is easy prey to demogaguery and wingery masquerading as earnest down-with-the-bankers populism. This is because “inflation” is a scary word that politicians without any sort of background in macroeconomics, or understanding of monetary policy, can throw around and win votes with because it reminds people of the 70s (or if they’re histrionically/historically inclined, the Weimar Republic). The pathetic Rick Perry, for example, got some mileage out of this this spring with his stupid talk of “giving Ben Bernanke a rough time in Texas” if he did more quantitative easing (QE), because printing more money is “almost treasonous” because inflation is bad and scary because mumble mumble Carter years. In fact, QE is probably just what we need right now (short version: modest rises in inflation reduce the marginal propensity to save vis a vis the marginal propensity to consume, because it makes it less likely that putting your money in an investment vehicle will beat inflation–so why not spend the money now? This puts more money circulating through the transactional economy–people buying and selling goods and services. As an added bonus, by devaluing the dollar vs. a vs. the yuan, it also lessens our debt to China). But, if you told most people, “Hey, the Fed is going to deliberately provoke inflation,” most people would be like “Oh no that’s terrible they can’t do that.” And if Congress had to vote on it, QE3–the measures that Bernanke just implemented, much to his credit and the inchoate wails of Republicans, who are claiming the timing is politically motivated–probably wouldn’t have happened, and that would be bad.
Basically, the independence of central banks is an important feature for modern economies; when politicians start taking control of it, bad things happen. We have empirical evidence for this: one of the things that the international development community did in post-colonial Africa was to help set up independent central banks. In recent years, a bunch of African governments have started to exert increased control over, or even just get rid of, their central banks,and it hasn’t worked well.
Yet, this is clearly the desired endgame of Ron Paul–his entire useless Congressional career has been built around, among other silly things, complete hostility to the concept of central banking; he’s written a book called “End the Fed.”
So this bill might sound appealing to progressives, perhaps because it sounds like it’s going after wealthy banking elites who have lots of power. More transparency for the big banks–who can be against that? But it’s basically the financial equivalent of allowing politicians with no background in public health to wander the halls of the Centers for Disease Control and tell epidemiologists how to manage public health crises (or, if Ron Paul gets his way. eliminating the CDC entirely because we shouldn’t have technocratic elites making important decisions about disease control in secret).
Here’s an article about it from a guy who knows way more about it than me: http://jared.realizingresonance.com/2012/08/13/federal-reserve-independence-and-the-transparency-trojan-horse
By way of conclusion, note that Sen. Sanders himself has not co-sponsored this particular version of the bill; I suspect there are reasons for that.
It will be interesting to see how Repubs will handle this audit. They don’t like Bernake, but it sounds like he used money to bail out their big money buddies. Gee, which way will they go on this one? Or will it quietly fade away….
Oh c’mon. If anything hinky is uncovered, do you really think the banksters asses will be in the sling with prosecutions imminent – or is this simply an attack on Ben Bernanke and the Federal Reserve’s power to actually end our financial depression?
Consider the sources, and the answer is evident.
Way to go, Sen. Begich!
Speaking of how money is handled by the big-wigs in this country, and the call -finally!– to ensure the Fed is totally and completely on the up-and-up, I seem to remember our instructor extraordinaire, AKM, also mentioning something about money laundering,,,
Well, lo and behold; guess what? Seems as if some of the big-wigs who’re currently (or were, formerly) sitting on the Board of Governors for the Fed and/or are in some way intimately involved with said regulatory board, have been running banks that are… well… um… err… uh… possibly *quite* complicit in that laundering!Who’d a-thunk. beth.
Here: JPMorgan, Bank Of America Probed Over Money-Laundering Allegations: New York Times — (from HuffPo) http://tinyurl.com/8zndl6x b.