President Obama Is wrong, really wrong, about the Federal Reserve.
A remarkable left-right congressional coalition – which includes everyone from true-blue progressives like Florida Congressman Alan Grayson to bleed-red conservatives like Texas Congressman Ron Paul — has formed to demand an end to Fed secrecy.
In particular, members of the coalition want to force the Fed to identify banks that took trillions of dollars in secret subsidies.
Unfortunately, the Obama administration has taken the side of elite and irresponsible Wall Street interests, as well as Fed insiders, to oppose open discussion of what is being done behind closed doors and without congressional consent with taxpayer funds.
"When it comes to openness vs. secrecy, Wall Street vs. Main Street, taxpayers vs. the big bankers, I am sorry to say that the White House has come down on the wrong side," says Vermont Senator Bernie Sanders, an independent who has long been critical of the Fed and of the bailout of big banks with tax dollars. "With growing support for this amendment from both the left and right, I hope that the administration reconsiders."
No one who knows Washington is holding their breath for Obama or Fed-friendly Secretary of the Treasury Tim Geithner to do the right thing.
The Fed will only be held to account if Congress acts.
For that reason, Sanders is offering an amendment to the weak financial services reform legislation that’s been proposed by Senate Banking Committee chair Chris Dodd, D-Connecticut, and is backed by the White House.
The Sanders amendment would require the Fed to name big banks that pocketed the trillions of dollars in secret subsidies – even as, in many cases, it now appears that those banks were claiming to have repaid acknowledged bailouts.
Sanders is working in conjunction with Paul, who has succeeded in winning broad support in the House for Fed accountability. Sanders’ office notes the "unlikely pairing" of a socialist from Vermont and a libertarian from Texas, arguing that: "Their legislation to audit the Fed is supported by a historically rare convergence of advocates and academics from the left, the right and the mainstream of American government and politics."
But the coalition is not so unlikely as rigid pundits might imagine.
There have always been forces on the left and right that have recognized a shared need for openness and accountability – especially when it comes to maintaining openness with regard to the financial system and the extent to which taxpayer dollars are being used to prop it up. Wisconsin saw it in the 1920s and 1930s, when rural Republicans joined with Milwaukee Socialists to battle the big banks that both groups thought were too controlling of the economy.