During each political kabuki there usually comes a time - at least one - when working from the shadows backstage just doesn't cut it any more and you need to risk coming out into the open. In the financial "reform" kabuki, that moment came when Bernie Sanders entered an amendment to the Dodd bill that would require the Fed to be audited. All of a sudden the back room playas were all out front in a full-court press.
The White House, Federal Reserve and Wall Street lobbyists are kicking up their opposition to an amendment to audit the Fed as a Senate vote approaches, Sen. Bernie Sanders (I-Vt.), the lead sponsor of the measure, said on Monday.
Banking Committee Chairman Chris Dodd (D-Conn.), who is shepherding the bill through the Senate, told Sanders Monday afternoon that "there's a shot we'll be up tomorrow," Sanders told HuffPost.
In the spring of 2009, Sanders brought a similar amendment to the Senate floor and won 59 votes. Eight senators who voted against it then are now cosponsors of his current measure.
"I think momentum is with us. But I've gotta tell you, that on this amendment, you're taking on all of Wall Street, you're taking on the Fed, obviously, and unfortunately you seem to be taking on the White House, as well. And that's a tough group to beat," said Sanders.
He's been trading calls, he said, with Rahm Emanuel, the White House chief of staff.
So the Obama WH, in the person of its leader's COS, is now openly joining Wall Street, the banksters (and their brigade of lobbyists), and right-wing talk radio in the attempt to protect the Fed from accountability or even a weak sort of transparency. naked capitalism's Yves Smith says there's no excuse for not auditing the Fed.
[C]ontrary to the Fed's claims of independence, it has been operating as an extra-legal off balance sheet entity of the Treasury, circumventing normal Constitutionally-stipulated budget processes. And rather than make adjustments in its practices to reflect its enlarged and now overtly political role, the Fed has instead been engaging in cynical, blatant misrepresentation, giving lip service to the idea of greater transparency in pubic, while fighting disclosure tooth and nail.
Since the Fed has entered into an openly political stance (and this dates back to Greenspan) and cannot be relied upon to make truthful and complete disclosures, the only recourse is to put it on a much shorter leash, which includes greater scrutiny, including third party validation. The Fed has brought on the audit demands via the unabashed and repeated abuse of its privileged role.
The Fed was no more immune to the Buddyism, cronyism, and greed that ran through Wall Street beginning with Reagan's win in '80 than the traders at Goldman's or the raters at Moody's. Everybody was in on it and everybody was going hell-bent for leather after as big a slice of the pie as they could get their grubby little mitts on, determined to keep the rest of us from finding out what they were doing. After all, as Greenspan said in a meeting in '08, the transcript only recently released, what did we know? The M's of the U were the only ones who really understood.
As top Federal Reserve officials debated whether there was a housing bubble and what to do about it, then-Chairman Alan Greenspan argued that dissent should be kept secret so that the Fed wouldn't lose control of the debate to people less well-informed than themselves.
"We run the risk, by laying out the pros and cons of a particular argument, of inducing people to join in on the debate, and in this regard it is possible to lose control of a process that only we fully understand," Greenspan said, according to the transcripts of a March 2004 meeting.
At the same meeting, a Federal Reserve bank president from Atlanta, Jack Guynn, warned that "a number of folks are expressing growing concern about potential overbuilding and worrisome speculation in the real estate markets, especially in Florida. Entire condo projects and upscale residential lots are being pre-sold before any construction, with buyers freely admitting that they have no intention of occupying the units or building on the land but rather are counting on 'flipping' the properties--selling them quickly at higher prices."
Had Guynn's warning been heeded and the housing market cooled, the financial collapse of 2008 could have been avoided.
But it wasn't heeded - or reported - and we know what the result was: the M's of the U almost brought the global economy to its knees and may yet succeed in doing just that. It's no wonder they want to do it in secret. Fred Hiatt's right-wing WaPo, in what appears to be an attempt to gin up some fear of the awful repercussions which might result if "populists" instead of the Street's M's of the U get hold of the "reform" movement and threaten actual, you know, reform, notes that the banksters' lobbyists are openly demanding a return to back-room deals. The WaPo thinks that would be a Good Thing.
"I think some of this stuff is going to get totally irrational," said one of many lobbyists who spoke on the condition of anonymity to discuss the situation more freely. "Every amendment you hear about is emotionally driven. . . . The Senate has turned from a deliberative body into an emotional reactor."
Lawmakers from both parties have been eager to excoriate Wall Street. But industry lobbyists warn that populist proposals to shrink, break up or otherwise shackle some of the giants of the financial world could do more harm than good to the economy. These advocates say that stiff regulation could stifle the flow of credit, undermine American competitiveness in global markets and cost jobs.
Among the terms that lobbyists used to describe elements of the legislation: "Draconian." "Crazy." "Insanely unproductive."
Many lobbyists say they are counting on Senate Majority Leader Harry M. Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) to block what the industry considers extreme or extraneous amendments.
Looking past the Senate debate, industry lobbyists say they hope Frank and the Obama administration can help remove some of the most objectionable provisions that survive the Senate.
"They've got to get this thing off the [Senate] floor and into a reasonable, behind the scenes" discussion, said one lobbyist. "Let's have a few wise fathers sit around the table in some quiet room" and work out the details.
"Wise fathers"?? Coming from the same hopeless gambling addicts who damn near destroyed us, that's a hoot. The Greeks, who had words for everything, used to call this hubris, meaning an arrogance so overweening that it would risk the planet on a fall of the dice. If a letter making the rounds and printed by London's Financial Times is any indication, hubris is something the Street has plenty of. (Via Avedon)
"We are Wall Street. It's our job to make money. Whether it's a commodity, stock, bond, or some hypothetical piece of fake paper, it doesn't matter. We would trade baseball cards if it were profitable. I didn't hear America complaining when the market was roaring to 14,000 and everyone's 401k doubled every 3 years. Just like gambling, its not a problem until you lose. I've never heard of anyone going to Gamblers Anonymous because they won too much in Vegas.
Well now the market crapped out, & even though it has come back somewhat, the government and the average Joes are still looking for a scapegoat. God knows there has to be one for everything. Well, here we are.
Go ahead and continue to take us down, but you're only going to hurt yourselves. What's going to happen when we can't find jobs on the Street anymore? Guess what: We're going to take yours. We get up at 5am & work till 10pm or later. We're used to not getting up to pee when we have a position. We don't take an hour or more for a lunch break. We don't demand a union. We don't retire at 50 with a pension. We eat what we kill, and when the only thing left to eat is on your dinner plates, we'll eat that.
For years teachers and other unionized labor have had us fooled. We were too busy working to notice. Do you really think that we are incapable of teaching 3rd graders and doing landscaping? We're going to take your cushy jobs with tenure and 4 months off a year and whine just like you that we are so-o-o-o underpaid for building the youth of America. Say goodbye to your overtime and double time and a half. I'll be hitting grounders to the high school baseball team for $5k extra a summer, thank you very much.
So now that we're going to be making $85k a year without upside, Joe Mainstreet is going to have his revenge, right? Wrong! Guess what: we're going to stop buying the new 80k car, we aren't going to leave the 35 percent tip at our business dinners anymore. No more free rides on our backs. We're going to landscape our own back yards, wash our cars with a garden hose in our driveways. Our money was your money. You spent it. When our money dries up, so does yours.
The difference is, you lived off of it, we rejoiced in it. The Obama administration and the Democratic National Committee might get their way and knock us off the top of the pyramid, but it's really going to hurt like hell for them when our fat a**es land directly on the middle class of America and knock them to the bottom.
We aren't dinosaurs. We are smarter and more vicious than that, and we are going to survive. The question is, now that Obama & his administration are making Joe Mainstreet our food supply…will he? and will they?"
So if you don't let them steal your money directly, they'll take your job away and assume ownership of your entire paycheck.
Sure. That's possible. Just like it's possible that they would wash their own cars and mow their own lawns, and it's possible that My Mother the Car will replace Lost as the Next Big Thing on TV.
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