Liberal Firedoglake urging support for HR1207!

[Chieftain1776]

Thanks Jane Hamsher! (even though she wasn't a fan of the tea parties).
Alan Grayson Says “Audit the Fed” (http://firedoglake.com/2009/05/21/alan-grayson-says-audit-the-fed/)
By: Jane Hamsher Thursday May 21, 2009 7:01 am

Eighty thousand people have now seen the famous Youtube of Fed Vice Chair Donald Kohn refusing to answer Alan Grayson's questions about where all the money is going. By law he doesn't have to. Despite the fact that they have printed or guaranteed some $2 trillion dollars in the past year, the Fed answers to no one, and no government entity can audit them.

Last month Charles Grassley tried to push a bill through the Senate which called for the Fed to be audited, but Richard Shelby watered it down before it passed. Now there are 165 cosponsors of Ron Paul's Federal Reserve Transparency Act in the House, but 135 of them are Republicans. (Bernie Sanders stands alone sponsoring the bill in the Senate.)

Alan Grayson (note: he's a Peter Schiff client) is trying to bring Democrats on board:

The Federal Reserve has refused multiple inquiries from both the House and the Senate to disclose who is receiving trillions of dollars from the central banking system. The Federal Reserve has redacted the central terms of the no-bid contracts it has issued to Wall Street firms like Blackrock and PIMCO, without disclosure required of the Treasury, and is participating in new and exotic programs like the trillion-dollar TALF to leverage the Treasury’s balance sheet. With discussions of allocating even more power to the Federal Reserve as the ‘systemic risk regulator’ of the credit markets, more oversight over the central bank’s operations is clearly necessary.

Why is the administration fighting this? Well, it's no secret that Larry Summers would very much like to take over as Fed Chair when Ben Bernanke's term is up next year. Why would he want that kind of scrutiny? But what Larry Summers wants and what is good for the country may be two different things.

Please join me, Glenn Greenwald, Naomi Klein, James K. Galbraith, Dean Baker, Bill Black, Tyler Durden of Zero Hedge, Yves Smith of NakedCapitalism, US PIRG, Public Citizen, Mike Farrell, Digby, Rob Kuttner, Ian Welsh, Bill Greider, Stirling Newberry, ANWF, Les Leopold, Mike Lux and others in supporting Alan Grayson and asking Democratic members of Congress to cosponsor the Federal Reserve Transparency Act.

Where does your member of Congress stand? Find out here. And if they aren't one of the 135 136 Republicans or 30 29 Democrats cosponsoring this bill, why not?

Sign the statement here that will be circulated to members of Congress as Rep. Grayson tries to get the 53 more cosponsors needed to pass the bill. And be sure to check the box if you'd like to have your name publicly displayed on the page.

[bucfish]

nice

[MRoCkEd]

Rep. Raul Grijalva Joins Alan Grayson, Cosponsors Federal Reserve Transparency Act (http://firedoglake.com/2009/05/21/rep-raul-grijalva-joins-alan-grayson-cosponsors-federal-reserve-transparency-act/)

By: Jane Hamsher Thursday May 21, 2009 11:45 am

Rep. Rajul Grijalva (D-AZ) has signed on to cosponsor H.R. 1207, the Federal Reserve Transparency Act. Rep. Alan Grayson sent a letter to his Democratic colleagues this morning asking them to join him cosponsoring the bill which gives the GAO the authority to audit the Federal Reserve.

Bernie Sanders has a similar bill in the Senate, but has no cosponsors.

Rep. Grijalva brings the total of Democratic cosponsors to 30. There are 136 Republican House members already cosponsoring the bill, and 218 votes are needed in the House for passage.

You can endorse the bill and Rep. Grayson's letter to his colleagues here (http://action.firedoglake.com/page/s/Fed1207).

[Epic]

I'm confused. Liberals love the Fed, cause without it they couldn't have the welfare-warfare state. So why do they want it audited?

[MRoCkEd]

I'm confused. Liberals love the Fed, cause without it they couldn't have the welfare-warfare state. So why do they want it audited?
They want to know exactly what it's doing so they can give the bankers cookies for doing such a good job.

Nah - there are plenty of principled liberals who, although they disagree with us on economic policy, do support transparency and oppose corporate welfare.

[Mani]

They want to know exactly what it's doing so they can give the bankers cookies for doing such a good job.

Bush started the bailouts, so the first TARP is evil and they want that audited.

[Imperial]

There are liberals who believe in a proactive populace to limit the excesses of government; welfare states come in varying degrees and perform different services.

[dr. hfn]

we are not partisan, we are American!

[Liberty Rebellion]

Wow, that's very encouraging!

[Knightskye]

Cool. Something to unite over. :)

[Jeremy]

we are not partisan, we are American!

I have a feeling they wouldn't be supporting it if Democrats like Grayson weren't.

[MRoCkEd]

Barbara Ehrenreich Endorses Alan Grayson Campign to Reform the Fed (http://firedoglake.com/2009/05/22/barbara-ehrenreich-endorses-alan-grayson-campign-to-reform-the-fed/)
By: Jane Hamsher Friday May 22, 2009 9:36 am

Barbara Ehrenreich, blogger and author of This Land is Their Land, has added her name to the list of 3,270 people endorsing Alan Grayson's campaign to audit the Federal Reserve.

Grayson seeks Democratic cosponsors to H.R. 1207. Yesterday Rep. Raul Grijalva of Arizona signed on to cosponsor the bill after Grayson sent a letter to his Democratic colleagues, asking for their support. There are now 166 cosponsors of the bill, 136 Republicans and 30 Democrats. A total of 218 votes are needed for passage in the House.

Also adding their names are:

* Michael Greenberger, Law School Professor and Director of the Center for Health and Homeland Security at the University of Maryland
* James I. Sturgeon, Professor & Department Chair of Economics. University of Missouri-Kansas City
* Michael Froomkin, blogger and Professor of Law, University of Miami School of Law
* John Amato, founder, Crooks & Liars
* Cenk Uygur, host of The Young Turks

They join Robert Borosage, Dean Baker, Bill Black, Glenn Greenwald, Naomi Klein, James K. Galbraith, Tyler Durden, US PIRG, Public Citizen, Mike Farrell, Thomas Ferguson, Digby, Rob Kuttner, Ian Welsh, Bill Greider, Stirling Newberry, ANWF, Les Leopold, Mike Lux, Yves Smith and others in endorsing the campaign.

Digby writes today about how William Grieder's book, Secrets of the Temple: How the Federal Reserve Runs the Country was written 20 years ago but is still relevant today. Coincidentally, we're going to be having Bill and Secrets of the Temple on next week for a "golden oldies" version of the FDL Book Salon. We'll keep you posted on scheduling.

You can endorse H.R. 1207 and Rep. Grayson's efforts here (http://action.firedoglake.com/page/s/Fed1207). Your name will be circulated to members of Congress as part of the campaign to attract cosponsors for the bill.

[Chieftain1776]

Nice. This really may work out as a genuine grassroots bipartisan success. I think Jane Hamsher and BreaktheMatrix has wanted to do something like this for a while. Good stuff...it's all about accountability.

[MRoCkEd]

Grayson's letter (http://action.firedoglake.com/page/content/graysonletter/):

Bring Some Accountability to the Federal Reserve

Letter endorsed by:

Dean Baker, Center for Economic Policy Research
James K. Galbraith, University of Texas and Senior Scholar of the Levy Economics Institute
Bob Borosage, co-director, Campaign for America's Future
Tyler Durden, Zero Hedge
Bill Black, Associate Professor of Economics and Law University of Missouri-Kansas City
Jane Hamsher, Firedoglake
Glenn Greenwald, Salon

US PIRG
Public Citizen
A New Way Forward
Consumer Action

Dear Colleague,

I write to ask you to co-sponsor HR 1207, the Federal Reserve Transparency Act, which would give the Government Accountability Office the authority to audit the Federal Reserve and its member components, and require a report to Congress by the end of 2010.

The Federal Reserve System operates as the central bank for the United States, managing the economy’s money supply and overseeing the banking system. Until recently, the Fed has not picked winners and losers when distributing money, nor has it brought credit risk onto its balance sheet. It has slowed or stimulated the economy by raising or lowering interest rates. Since March 2008, however, the Fed has resorted to using its emergency powers to pick winners and losers, and to take massive credit risk onto its books. Since last September, the Fed’s balance sheet has expanded from around $800 billion to over $2 trillion, not including off-balance sheet liabilities it has guaranteed for Citigroup, AIG, and Bank of America, among others. The bank is also ‘monetizing’ the debt of the United States Government by purchasing massive amounts of agency and Treasury bonds. An audit is the first step in bringing this unaccountable system under the control of the public, whose money it prints and disseminates at will.

The Federal Reserve is an odd entity, a public-private chimera that controls the US monetary system and supervises the banking system. The system is governed by a Board of Governors, with twelve regional reserve banks that serve a supporting role. While the Governors are appointed by the President with confirmation by the Senate, the regional Reserve Banks have boards of directors chosen primarily by private banking institutions. Right now, for instance, the CEO of JP Morgan, Jamie Dimon, serves on the Board of Directors of the New York Federal Reserve Bank, as did Goldman Sachs Director Stephen Friedman.

This creates striking conflicts of interest and unseemly appearances in the management of what is ultimately the public’s money. Consider:

* JP Morgan’s CEO was a board member of the New York Fed even as he negotiated on behalf of JP Morgan with the New York Fed for a $29 billion bridge loan to allow his company to take over Bear Stearns.
* New York Fed and Goldman Sachs board member Stephen Friedman purchased 37,300 shares of Goldman Sachs stock in December at the same time as Goldman received permission to convert to a bank holding company regulated by the Federal Reserve. Friedman at the time was also overseeing the selection of a New York Federal Reserve President to replace Tim Geithner, and the New York Fed ended up hiring another alumni from Goldman Sachs.
* According to the bank’s website, the two “class B” directorships of the New York Fed that are supposed to represent the public are vacant.
* Enron’s Jeff Skilling was on the board of the Dallas Federal Reserve Bank.

Criticism of banker influence and control of our monetary system is not new. However, the urgency of the financial crisis and the actions of the Fed picking investment bank winners and losers have changed the nature of the criticism. The Senate just passed a non-binding resolution requiring more transparency at the Federal Reserve in its Budget Resolution.

Still, neither the GAO nor the Federal Reserve Inspector General has audited the books of the Federal Reserve or its regional banks. The Financial Services Subcommittee on Oversight and Investigations held a recent hearing with Federal Reserve Inspector General Elizabeth Coleman. In that hearing, Coleman could not tell me who had received over a trillion dollars in Fed lending, what kind of losses the bank had suffered on its $2 trillion portfolio, appeared unaware that the Fed engages in trillions of dollars in off-balance-sheet commitments, and was not investigating the role of the Fed in allowing the collapse of Lehman Brothers. Coleman’s responses were so remarkable that when the video of this exchange was put on Youtube, it was watched more than 350,000 times.

Furthermore, the Federal Reserve has refused multiple inquiries from both the House and the Senate to disclose who is receiving trillions of dollars from the central banking system. The Federal Reserve has redacted the central terms of the no-bid contracts it has issued to Wall Street firms like Blackrock and PIMCO, without disclosure required of the Treasury, and is participating in new and exotic programs like the trillion-dollar TALF to leverage the Treasury’s balance sheet. With discussions of allocating even more power to the Federal Reserve as the ‘systemic risk regulator’ of the credit markets, more oversight over the central bank’s operations is clearly necessary.

The net effect of recent actions has been to isolate financial policy-making entirely from democratic input, and allow the Treasury Department to leverage the Federal Reserve’s balance sheet to spend money it cannot get appropriated from Congress. The public does not know where trillions of its dollars are going, and so has no meaningful control over the currency or this unappropriated “budget”. The extraordinary size of these lending facilities combined, the extreme secrecy, and the private influence is a dangerous seizure of Congress’s constitutional prerogative to appropriate public monies and control the currency.

An audit of the Federal Reserve may not be sufficient to control this sprawling system or bring it back into balance, but it is a start. The public has a right to know to whom the US government is lending trillions of dollars. Dancing around this issue with technocratic terms like ‘increasing liquidity’ is preventing a full and long overdue public debate on the role of the Federal Reserve and the influence of private banking interests in the governing of our economy.
I encourage my colleagues to support H.R. 1207, so that we can bring some transparency to our banking system and allow the public to have a real debate over the fundamental direction of our nation’s political economy.

[steph3n]

This is a great development, a democrat willing to stick their hand out and write a letter to their friendly critters in the same party.

[itshappening]

I think the liberals are embarassed that the democrats have dragged their heels on this, i wonder why we have so few democrats... I kind of think because they have power maybe"they" have got to them? The Republicans know they dont have power so are happy to sign up but the dems are under orders? I dont know how else to explain this... maybe they see Ron Paul and a number of Republicans and think hmm

[Carole]

Excellent! It is gratifying to see Alan Grayson asking hard questions--really late, but at least he is pointing out the arrogance, secretiveness, and idiocy of the FED.

His letter should help grow support for the audit bill.