Sunday, December 5, 2010
For those who think Congress has any real power over the Federal Reserve...
Related article:
Fed report lifts lid on Great Bank Heist of 2008-2009
The US Federal Reserve Board on Wednesday released documents on emergency measures it took between 2007 and 2010, using taxpayer funds, to bail out major financial firms in the US and around the world. The sums involved are staggering.
Fed bailout loans outstanding reached a high of $3.3 trillion, but the cumulative amount of cash funneled by the US central bank to banks, hedge funds and major industrial corporations reached the tens of trillions of dollars.
Every major Wall Street bank was on the Fed dole, as were giant companies including General Electric and Verizon Communications. The Fed ran nearly a dozen separate bailout programs which together eclipsed by far the Treasury Department's $700 billion Troubled Asset Relief Program―the program that handed over billions in public funds to the banks in 2008 and 2009. In comparison to the amounts funneled by the Fed to US financial institutions, the Obama administration's $787 billion stimulus package was a drop in the bucket.
These vast sums were loaned out at rock-bottom interest without any strings attached. The banks and corporations that benefited were not even obliged to provide an account of what they did with the money. The entire purpose of the operation was to use public funds to cover the gambling losses of the American financial aristocracy, and create the conditions for the financiers and speculators to make even more money.
All of the 21,000 transactions cited in the Fed documents―released under a provision included, over the Fed's objections, in this year's financial regulatory overhaul bill―were carried out in secret. The unelected central bank operated without any congressional mandate or oversight.
The documents shed light on the greatest plundering of social resources in history. It was carried out under both the Republican Bush and Democratic Obama administrations. Those who organized the looting of the public treasury were long-time Wall Street insiders: men like Bush's treasury secretary and former Goldman Sachs CEO Henry Paulson and the then-president of the New York Federal Reserve, Timothy Geithner.
Obama signaled the continuation of the policy of social plunder by appointing Geithner as his treasury secretary. On the industrial front, he selected investment banker Steven Rattner―now under indictment for corrupt dealings with the New York State pension fund―to head his Auto Task Force and impose mass layoffs, 50 percent wage cuts on new-hires, and reductions in health care and other benefits on workers at General Motors and Chrysler.
The release of the Fed report, coming in the midst of preparations to extend the Bush-era tax cuts for the rich and impose savage austerity measures on the working class, demonstrates in the clearest possible manner the class interests defended by the government and both political parties.
It exposes the fraud of Obama's endless paeans to the “free market” and “private enterprise” as the “engines” of economic growth. In contemporary America, profits are private, corporate losses are socialized. And those who must pay the bill are the working class.
The Fed documents show that the US central bank enabled banks and corporations to offload their bad debts onto the Fed's balance sheet. Now, in order to prevent a collapse of the dollar and a default by the US government, the American people are being told they must sacrifice to reduce the national debt and budget deficit.
But as the vast sums make clear, the “sacrifice” being demanded of working people means their impoverishment―wage-cutting, mass unemployment, cuts in health care, Social Security, Medicare, Medicaid, etc.
The very scale of the Fed bailout points to the scale of the financial crash and the criminality that fostered it. Every major financial institution piled up huge profits by speculating wildly with borrowed money. The big banks stoked a housing market bubble based on predatory sub-prime mortgages sold to low-income workers, knowing that the loans were likely to default.
The entire US capitalist economy rested on a huge Ponzi scheme that was bound to collapse. Bernard Madoff, arrested in December 2008 and jailed for life for his $20 billion scam, was a piker compared to the CEOs at Goldman Sachs, JPMorgan Chase, Citibank, Bank of America and Morgan Stanley.
Link:
http://www.globalresearch.ca/index.php?context=va&aid=22272
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