Tags: greider | muzzle | fed

Greider: Six Reasons to Muzzle the Fed

By    |   Monday, 20 Jul 2009 01:11 PM

Granting the Fed even more power is a really bad idea for six reasons, says political journalist William Greider.

First, doing so would reward failure, Greider writes in The Nation.

“Like the largest banks that have been bailed out, the Fed was a co-author of the destruction,” Greider says.

“During the past twenty-five years, it … allowed, even encouraged, the explosion of debt and inflation of financial assets that have now collapsed.”

Second, the Fed’s extreme policy swings wound up blinding it to reality by conforming it to the right-wing market doctrine of former chairman Alan Greenspan.

Third, the Fed cannot possibly examine "systemic risk" objectively because it helped to create the very structural flaws that led to breakdown.

Fourth, the central bank can't be trusted to defend the public in its private deal-making with bank executives.

“The numerous revelations of collusion have shocked the public, and more scandals are certain if Congress conducts a thorough investigation,” Greider says.

Fifth, the Fed will be bound to embrace the “too big to fail” doctrine as "systemic risk" regulator.

“A new super-class of forty or fifty financial giants will emerge … this time, it will be armed with a permanent line of credit from Washington,” Greider asserts.

Finally, the road the Fed is taking leads to the corporate state … “a privileged club that dominates everything else from the top down.”

Seventeen House lawmakers have sent a letter to President Obama demanding a full investigation of the Federal Reserve’s role in Bank of America’s acquisition of Merrill Lynch.

Such a review is necessary before Congress can approve expanding the central bank’s powers by overhauling financial market rules, the letter stated.

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Granting the Fed even more power is a really bad idea for six reasons, says political journalist William Greider.First, doing so would reward failure, Greider writes in The Nation. “Like the largest banks that have been bailed out, the Fed was a co-author of the...
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2009-11-20
Monday, 20 Jul 2009 01:11 PM
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