I know we've had some readers who really, really hate the Federal Reserve. From the Guardian, they should enjoy this Dean Baker op-ed, as should anyone else wondering what exactly is happening to the trillions being thrown at banks:
To my knowledge, no one has proposed waterboarding the US Federal Reserve. But the hostile reaction of much of the country's political leadership to suggestions that the Government Accountability Office (GAO) audit the Federal Reserve Board might lead people to think that waterboarding was being called for.
The basic story is straightforward. The US Congress has lent more than $700bn, via the Treasury, to bankers at below market interest rates through the troubled assets relief programme, or Tarp. This was to keep the banks from going belly up. At the same time, the Fed has lent more than $2 trillion to banks and non-financial institutions to maintain liquidity in the financial system.
The congressional oversight panel, led by Elizabeth Warren, has frequently complained that the Treasury has not always been altogether forthcoming in providing information about its lending practices under the Tarp. However, there is at least a public paper trail. We can find out how much money each bank received and under what terms.
By contrast, there is no public paper trail for the Fed's loans, even though it has more than three times as much money outstanding as does the Treasury through the Tarp. The Fed has only provided aggregate information on the amount of loans in each of its various lending programs, and general information on the terms of the loans and the types of collateral received.
Scary stuff.
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