Obama administration supports revised Audit the Fed amendment

by: Chris Bowers

Thu May 06, 2010 at 18:22


This just came in over email:

Statement from the Deputy Secretary of the Treasury Neal Wolin:

We appreciate the work of Senator Sanders and Senator Dodd to work together on a strong amendment that ensures full and open transparency regarding emergency lending programs, without compromising the Federal Reserve's full independence with respect to the conduct of monetary policy.

Senator Sanders' revised amendment provides for a comprehensive GAO audit of the Federal Reserve Board's operations in response to the recent financial crisis, while preserving the existing protections of the Federal Reserve's independence with respect to monetary policy.

We are confident that the revised amendment proposed by Senator Sanders strikes the appropriate balance:  providing full transparency of lending programs while protecting the bedrock principle of central bank independence on monetary policy that has served our nation so well.

So, the Obama administration now supports the revised Audit the Fed amendment. Looks like they couldn't stop Sanders and worked with Dodd to make a deal with him.  Or, they were beaten when Dodd made a deal, and jumped on board to save face.

Whatever it is, the amendment will now pass.  Whether the changes to the amendment were substantive remains to be seen. At first glance they do not appear to be, making this a big win for the transpartisan coalition that supported this effort.

Chris Bowers :: Obama administration supports revised Audit the Fed amendment

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Obama administration supports revised Audit the Fed amendment | 19 comments
Strange one to figure out (4.00 / 1)
As per usual, my initial thoughts were two, completely opposite reactions:

1) This modification just makes the bill do what I thought the bill was supposed to do.  If the bill was accidentally too undefined and had potential issues if left unchanged, it seems reasonable to fix that.

2) Ignore the man behind the curtain!  Whenever anyone tells me to not look at something, it makes me want to look.  What exactly are they hiding?  I didn't really want to know the details of how they determined monetary policy before; now I do.

Me too (4.00 / 1)
Especially with the stories floating around about how Greenspan basically omitted any dissent on policies leading up to the housing bubble. He knew what he was doing, apparently, and was quoted as saying he wanted to make sure the public had no idea what was going on, lest they start taking an active interest in this issue... and start making demands for sound policies.

Perhaps this is simplistic, but it looks more and more like Financial Arson, straight from Greenspan's mouth. I'd like to know where in the Fed Charter it says Financial Arson is codified!

And to think this stuff makes my eyes hurt when I read it! Dude, where's my blinders?

"More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly." -Woody Allen, My Speech to the Graduates

[ Parent ]
Blinders have been pawned (0.00 / 0)
and the gravy train tracks scrapped for cash.


"It sounds wrong...
     ...but its right."
[ Parent ]
This looks fishy at the moment. (0.00 / 0)
Dodd  became a co-sponsor, which is enough to raise red flags on this puppy.

FDL has several posts, here's one:

http://firedoglake.com/2010/05...

And here's the text of the amendment itself:

http://static1.firedoglake.com...

Looks like the audit only goes back to 2007, after the most scandalous stuff happened. Exempts FOMC? If so, this is just a cover-up, dressed up as "reform."

Basically, if the FOMC meetings--which is where the decision was made to totally ignore the housing bubble-- are exempted, then this is basically a cover-up of potentially illegal activities. Some compromise. Bernie's not looking too good at the moment.

Hope I'm wrong about that, but if that's the case, this is a sham of an amendment. Some transparency they've got there, eh?

"More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly." -Woody Allen, My Speech to the Graduates

Okay, having read the thing... (0.00 / 0)
... it's good on the financial transactions, loans, collateral requirements, contracting, etc. It specifically seeks to disclose any conflicts of interests and such on these facilities and so on.

This is good. But it doesn't go back far enough and it doesn't cover FOMC at all.

So that will remain totally secret. So Greenspan and the board are off the hook, regarding the lead-up to the crash.

No wonder Dodd signed on.

"More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly." -Woody Allen, My Speech to the Graduates

[ Parent ]
Secrets are kept for a reason. (0.00 / 0)
It's a good amendment.  I want it to allow omnipotent transparency across the board, but there's one ramification for that.  It could deeply impact the markets.  Although that isn't guaranteed, it is a worry.
[ Parent ]
Please, enlighten us as to how secrecy is somehow good for markets. (0.00 / 0)
Indeed, please tell us how providing LESS information is better for markets than providing MORE information. Markets exist for the purpose of discovering prices. How the (bleep) can you do that when so much is done in secret?

Secrecy means imbalances in markets. Perhaps you prefer that to a properly functioning market. Sheesh.

I don't think you understand markets at all.

"More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly." -Woody Allen, My Speech to the Graduates

[ Parent ]
Secret deals: A.K.A. Crony Capitalism (0.00 / 0)
You are basically reciting Dik Chainy's "rationale" for keeping us all in the dark.

Your argument that, "[i]t could deeply impact the markets" is specious, at best. They've kept these secrets for almost a decade - and the markets WERE deeply impacted in a way that was negative of almost everyone - EXCEPT those who were in on the secret deals, of course, they are doing quite well, are they not?


"It sounds wrong...
     ...but its right."

[ Parent ]
FDL's title bashing Sanders is quite ludicrous. (4.00 / 3)
Bernie Sanders has been the strongest fighter for financial reform and partly because of him, this bill is not going to be crap.  It's going to be a bill that regulates derivatives, increases transparency, and increases consumer protections.

He's on the left edge of the Senate with honorable people like Franken and Kaufman.  He doesn't deserve to be the target of FDL's yellow lettering purity campaign.

[ Parent ]
Sanders should know working with Obama means he's not a progressive (0.00 / 0)
Real progressives like Jane work with Grover Norquist and the teabaggers against Obama.  

Saxby Chambliss  
[ Parent ]
I'm pretty sure being progressive (4.00 / 1)
is about the causes you espouse, not who you will work with.  On the other hand, making politics solely about whether you support a particular president or not is partisanship, not progressivism.

That is not a defense of Jane - but it seems worth getting our terms right.

Politics is the art of the possible, but that means you have to think about changing what is possible, not that you have to accept it in perpetuity.

[ Parent ]
Sanders (0.00 / 0)
Has any other Senator been more effective this term? Has anyone else come close to accomplishing as much for progressives?

Pretty impressive.

[ Parent ]
And the amendment does a lot of good things. (0.00 / 0)
It is NOT a sham.  It's just not omnipotent.
[ Parent ]
I already said it does some good things. (0.00 / 0)
But it also helps maintain a level of secrecy that is not in the national interest.

"More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly." -Woody Allen, My Speech to the Graduates
[ Parent ]
By the way, don't label me a FDL-basher. (0.00 / 0)
I'm just tired of them creating a circular firing squad around the better senators we have.

[ Parent ]
Maybe if you stop your mindless bashing, you won't be called one, eh? (0.00 / 0)


"More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly." -Woody Allen, My Speech to the Graduates
[ Parent ]
We don't know what we don't know regarding the federal reserve (0.00 / 0)
While I would agree that there are possible scenarios that warrant confidentiality on the part of the Federal reserve I can't help but to smell a rat when a revision offers further protection for an entity with so much bad press.

"Protecting the bedrock principle of central bank independence on monetary policy that has served our nation so well". That's an assumption I would disagree with.

Peter Joseph has an interesting documentary entitled "Zeitgeist the addendum" That left me, for one, with many reservations regarding the federal reserve needing protection from any inquisition, quite the contrary.
Tattoo Off

Why is the vote taking so long? (0.00 / 0)


John McCain won't insure children
Two steps forward, one step back.... (4.00 / 3)
We're getting a little help from events, which is what I've always thought we needed. The Greek meltdown and possible collapse of the Euro, BP covering the Gulf with oil and apparently no clue how to stop it, yet another right winger caught with his pants down, the chronicles of Fabulous Fab, Iranian clients about to pry the reins of the Iraqi state out of our hands -- suddenly we're presented with an embarrassment of riches seemingly out of thin air. No doubt at least some of the usual suspects' heads will rest less easily on their pillows tonight than they did last night.

Rhapsodies aside, I agree that for once we have a compromise which looks like it might actually accomplish something. Will it take an impending asteroid collision to get the rest? Let's hope not.

Obama administration supports revised Audit the Fed amendment | 19 comments
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