It’s kind of weird to see Bloomberg News savaging the big banks like this, but we have to give them credit for reporting the facts. I just read the article and my first impression is that there is less news here than meets the eye. Yes, we now have details about how much money the Fed lent to banks and when they did it. And, yes, the information exposes the CEO’s of CitiGroup, Bank of America, and JP Morgan as enormous liars. But I also see a lot of lawmakers trying to run for cover by claiming ignorance. We all knew that the Fed had lent many trillions of dollars to the banks. Lawmakers knew it, too. The lack of transparency didn’t fool anyone, it just allowed them to do the banks’ bidding without consequences to themselves. It’s not right to say that more information would have changed a bunch of lawmakers’ minds and led to stronger reform and a breakup of the banks. More information would have scared lawmakers into voting for stronger reform.
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BooMan
Martin Longman a contributing editor at the Washington Monthly. He is also the founder of Booman Tribune and Progress Pond. He has a degree in philosophy from Western Michigan University.
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First the Koch Bros expose and now this. It may be an investigative recap of what most of us already understood but if the Bloomberg stamp can get some of it to creep into the Fox viewer consiousness then WSJ will have to opinionize it.
I see rumors are circulating that Barney Frank won’t be running next round.
Confirmed. Story’s on cnn.com’s Political Ticker now.
No, I don’t think most people do. We’ve all heard news reports citing the $700 billion bailout of the banks, typically followed these days by the comment that it has been ‘repaid in full’.
But $7.7 trillion in low interest loans to the wealthiest people in the world? We could have refinanced every underwater mortgage in the country for that price at rates that people could actually afford to pay, staved off the worst of the financial crisis and gotten the economy turned around.
But that would have been socialism.
OT, but is this real? Barney Frank not seeking re-election?
http://content.usatoday.com/communities/ondeadline/post/2011/11/report-ep-barney-frank-will-not-seek
-re-election/1?loc=interstitialskip
person in 100 even knows there is a discount window for commercial banks, and far fewer actually understand it.
The discount window is one of a group of tools designed to precent banks runs. The loans HAVE to be secret, because the whole point if to prevent runs on banks.
The real story here is almost certainly going to get lost: we are slowly learning the economy was in far worse share in late ’08 than even the most pessimstic writes thought. We know, for example, that GDP fell much further than originally thought.
It’s probably supposed to seem weird to us. This wouldn’t have anything to do with burnishing Mike Bloomberg’s ‘Man Of The People’ image, would it?
Maybe Mr. B. is playing J. Edgar to the powerful by saying that they have no secrets from him, and he’ll gladly use them in his quest for power.
Like I said below…
The permaGov hustle is on!!!
AG
Bloomberg.
Is he prepping public opinion so that he can run as an independent party candidate?
This is the only explanation that I can see for the appearance of this kind of article on Bloomberg News. The only others are that Mike Bloomberg either:
1-No longer works for…or actively opposes the current form of…the financial sector of this permaGov-ruled country.
or
2-He no longer controls Bloomberg LP.
Obsessive, micromanaging little control freak that he is, I cannot imagine that #2 is correct, and #1 goes against the evidence of his whole career.
Hmmmmm…
It has long occurred to me that as a kind of vaccine against the looming possibility of a Ron Paul third party run the permaGov might float a fourth party that would preemptively cop some of his potential voter base.
Hmmmmm…
Split and thus minimize the impact of the dissident vote…the vote that is not happy with either party…and once again you get a win/win situation for the permaGov. Good cop Obama and bad cop Romney, both working for the man, of course. Or alternatively, WWF-style…Obama takes on the bad cop role and Romney is run as the good cop. The possibilities are endless. Vince McMahon style politics. Nice.
May you be born(e) into interesting times indeed.
AG
I think it has to do with a split among the 1% ers – some, like the Koch bros, don’t mind destroying the usa economy and turning us into Mexico, they’ll still do fine; others, the Bloomberg crowd, will have their livestyles and livlihoods impaired by a collapse
There’s no new news here, other than what fladem pointed out. And I agree, it has to be this way; why are people railing against the Fed for doing its job of acting as lender of last resort? The only thing learned is that things were worse than initially thought.
I just don’t understand what’s supposed to be done with the “audit” information. I’m in favor of sunlight…when it causes us to do something to change course. I want the torture photos revealed; I want to know if the government is torturing people; I want to know campaign finance information. But the reason I want this information isn’t simply “to know,” it’s to do something about it. Do they plan on limiting the discount window? Lobbying the Fed not to offer it to certain people? Politicize it? Lobby for control of monetary policy? End the institution completely (horrible idea)?
The entire reason it was created was for this very reason…and we don’t have a large, single, private bank like J.P. Morgan of the 1907 Panic to step in to do the very same thing that the Fed already does.
What about the argument that this information would have lent momentum to a stronger reform bill?
Stronger how? In what way? A lot of people who the left rallied around like Jeff Merkley (who I personally think is a good ally in general) proposed the vision for the Volcker Rule that eventually was passed. It wasn’t what they wanted, per se, but what we got is based around their proposal. Yet despite this rallying for Merkley-Levin, their version of the rule was exposed from the get-go as something any bankster lawyer could easily navigate.
Although it is a shame my favorite Congressman is retiring…he knows banking policy better than anyone. So in that sense, this is the best we’ll get for a while.
Well, the article suggests that detailed knowledge might have changed things for the better.
And then there’s Dean Baker, certainly no friend of the Fed as is, who embraced the audit, saying it should start bailing in Europe:
Time for the Fed to take over in Europe
One more final link (sorry):
Don’t Politicize the Fed
That one comes from AmericaBLOG’s resident Cornell Economist.
I cannot get behind the left on this one. It’s nonsense to think pols should be involved in this process. It always leads to runaway inflation.
I doubt that Congress would have gone for stronger regulations of the banks. They know where they get their money and they have their own sense of strange loyalty to the banks.