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Alan Grayson On The Passage Of The Partial "Audit The Fed" Amendment

Tyler Durden's picture





 

The Senate just voted, 96-0, to audit the Federal Reserve. Soon, we will know what the Federal Reserve did with the trillions of dollars that it handed out during the financial crisis.

A few months ago, such a vote would have been unthinkable. One senior Treasury official claimed he would fight to stop an audit 'at all costs'. Senator Chris Dodd predicted that an audit would spell economic doom, while Senator Judd Gregg attacked accountability for the Fed as "pandering populism".

Today, both the Treasury Department and Senator Dodd support this amendment. As for Judd Gregg, he was just on the floor of the Senate discussing -- of all people -- 19th century populist Presidential candidate William Jennings Bryan.

What happened?

People Power is what happened. We built a coalition of people on the right and the left, ordinary citizens and economists, ex-regulators and politicians, all with one question for which we demanded an answer: "What happened to our money?"

No longer can Ben Bernanke get away with saying, "I don't know."

Now, we're going to know who got what, and why.

Releasing this information will show that the Federal Reserve's arguments for secrecy are -- and have always been-- a ruse, to cover up the handing out of hundreds of billions of dollars like party favors to the Wall Street favorites who brought the American economy to the brink of ruin.

But our work isn't quite done. The Senate audit provision isn't as strong as what we passed in the House. The Senate provision has only a one-time audit, whereas what we passed in the House would allow audits going forward. There will be a conference committee that will merge the provisions from the two bills.

The need for audits and oversight over Fed handouts going forward is great. The financial crisis isn't over, and neither are the Fed's secret bailouts. Earlier this week, the Federal Reserve announced it was going underwrite the Greek bailout by lending dollars to the central banks of Europe, England, and Japan. The loans may never be paid back, the Fed accepts the risk that the dollar will strengthen in the meantime, and the interest rate charged by the Fed is very likely at below-market rates. So such loans are in effect just a subsidy, to bail out foreigners.

The Fed has not been chastened. It is bolder and more of a rogue actor than ever. It's clear that without full audit authority going forward, the Fed will continue to give out "foreign aid" without Congressional or even Executive permission.

And it will do so in secret.

So we will be fighting on to get a full audit from the conference committee.

But let's not lose sight of what we have accomplished so far - real independent inquiry into the Fed, and its incestuous relationships with Wall Street banks. For the first time ever.

Our calls, emails, lobbying, blogging, and support really mattered. We made it happen.

Today, we beat the Fed.

Courage,

Alan Grayson

 


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Wed, 05/12/2010 - 04:41 | Link to Comment chindit13
chindit13's picture

Here is a not-so-bold prediction:

The Fed, or the Fifth Branch of Government (Dick Cheney being the 4th Branch) will pull every stop to delay this, even trying to take it to court.

One year from today, 12 May 2011, we will still be waiting for the first data.

Grayson may go all Tasmanian Devil about it, but in the end Wall Street and Bernanke will win. 

Laws and the Constitution mean nothing when big money is involved.  The US can be bought.  Actually, it's already been bought, from the Halls of Congress to Obama's (hopefully) temporary home.

Wed, 05/12/2010 - 04:53 | Link to Comment jeff montanye
jeff montanye's picture

how is dick cheney still a branch of government?  wouldn't obama's be a temporary home even in the unwelcome event of his reelection?  seems like i remember a constitutional amendment to that effect, or are you mooting the possibility of president for life under emergency powers giving the lie to him as bush lite and suggesting that bush will hence be known as an apprentice obama?

Wed, 05/12/2010 - 05:36 | Link to Comment i.knoknot
i.knoknot's picture

i love this place - not even the second comment and we're already off-topic.

maybe i can mention tea-baggers and get things really going...

heh

i'm with chindit. just like this bill, you'll see the pea under one of the three the walnut shells, then ...

as with the rest of this administration (and prolly most before it...) "watch the other hand"

Wed, 05/12/2010 - 05:53 | Link to Comment Crummy
Crummy's picture

Speaking of William Jennings Bryan, I wish I had a nice cross of gold about right now.

See what I did there? Not only Am I off the topic of your post, but I used the OP as a segue into a totally different subject altogether.

Wed, 05/12/2010 - 06:14 | Link to Comment i.knoknot
i.knoknot's picture

not even subtle, but it sorta worked!

nice

Wed, 05/12/2010 - 07:27 | Link to Comment SWRichmond
SWRichmond's picture

maybe i can mention tea-baggers and get things really going...

HEY!  I SAW THAT!

:)

Fri, 05/21/2010 - 06:18 | Link to Comment i.knoknot
i.knoknot's picture

more support is lurking than you know. be strong.

Wed, 05/12/2010 - 11:39 | Link to Comment Crab Cake
Crab Cake's picture

maybe i can mention tea-baggers and get things really going...

Jesus loves you.

Women should stay at home.

I wish we could get these socialists out of our government.

That should do it....

[sarcasm/]

Wed, 05/12/2010 - 06:13 | Link to Comment chindit13
chindit13's picture

It was a joke.  If you'll recall, Cheney declared himself somehow out of the Executive Branch.

Wed, 05/12/2010 - 07:42 | Link to Comment moneymutt
moneymutt's picture

When Cheney was in govt he claimed not to be, because, to be in govt, meant one could be subject to the oversight of the citizens, so in that way he is like the Fed...We are not govt, you can not check and balance us, we private and special, however, you must remember to give us all the power of the government, just none of the oversight.

Cheney is like stalker ex-boyfriend, we dumped him but he keeps lurking around, besides constantly weighing in on foreign affairs and national security policy, he recently met with Saudi king...can't he just retire to his mistress, the middle east, and leave us alone try to deal with our already-plently-messed-up domestic life. 

Wed, 05/12/2010 - 11:04 | Link to Comment doublethink
doublethink's picture

 

Gee Whiz

 

Throughout the financial reform debate, the finance industry has waged an unprecedented assault on the democratic process, spending an estimated $1.4 million per day to influence Congress and hiring 70 members of Congress and 940 former federal employees to lobby on their behalf.

 

http://www.ourfuture.org/bigbanktakeover

 

Wed, 05/12/2010 - 11:38 | Link to Comment Crook County
Crook County's picture

They will win if we let up.  Grayson is right, this is only the beginning of the fight to bring transparency to the Federal Reserve. 

Wed, 05/12/2010 - 05:54 | Link to Comment Popo
Popo's picture

Today we beat the Fed?

No. Today we DID NOTHING MORE THAN MAKE A PLAN which has a thin chance of succeeding.

Come on Mr. Grayson. Don't bask in the glory of lightweight political successes. We need actual change.

When Bernanke goes to trial on criminal charges and is convicted, I'll vote for you for president. Hell, I'll *campaign* for you for president. But lets take it one step at a time here...

Wed, 05/12/2010 - 06:09 | Link to Comment John McCloy
John McCloy's picture

This is why Sanders never should have caved because he foolishly allowed for politicians to pretend they voted for an audit of the Fed because there were two amendments. He really screwed us on that one and he was played like a fool. If there was only one amendment the political scum would have been forced to vote for the full audit.

Wed, 05/12/2010 - 07:59 | Link to Comment moneymutt
moneymutt's picture

agreed that Sanders amendment gave them opportunity to fake like we have some control over Fed and our own money...

and agreed on others pessimism, but not agreed on giving up...

I actually think they made a bit of mistake all voting for Sanders weak amendment, because this is actually getting a fair amount of press coverage, that Auditing Fed is good idea, unprecedented bi-partisanship blah blah...this means some sheeple learned today that the Fed was previously not responsible to be audited,and that everybody, including Fox news thinks its a good thing to check up on them...no muddled message trying to say its an Obama socialist plot to take over Feds money control, no muddled mess that only crazy racist Tea Partiers are for such a bad destabilizing thing because Dems voted for it too....so when Paul or Grayson says it was not enough, we need more....

.and in angry times, just a little info, can sometimes be the thread that unravels things, so there is likely a crumb or two of info we may get out of even Sanders amendment that will help...and anytime we force these folks to have to move the shells around to hide crap in new places, is a good. They may be powerful, but not unbeatable, and they make mistakes too...we should keep pounding at every wall never knowing when we will finally get to the structure...

Wed, 05/12/2010 - 14:31 | Link to Comment milbank
milbank's picture

Grayson must be up for re-election this fall or why else would he be trying to make chicken salad out of chicken shit.

Wed, 05/12/2010 - 05:59 | Link to Comment sweet ebony diamond
sweet ebony diamond's picture

bernanke is so wrong in what he has done.

the books of history must record that.

(and websites)

Wed, 05/12/2010 - 06:54 | Link to Comment primefool
primefool's picture

Bernanke is an over educated idiot who swalled whole all the drivel that passes for an economics education these days. he swallowed netter than many others so he was elevated to his current position. Thats what I sincerely believe.

Wed, 05/12/2010 - 06:04 | Link to Comment Tart
Tart's picture

This makes the Supreme Court fight over the fed a non issue now? One crack in the dam, one peak behind the curtain and then we'll get a full audit. Once they see the garbage being done from what we can look at now we'll get a full audit.

Wed, 05/12/2010 - 07:47 | Link to Comment zhandax
zhandax's picture

This makes the Supreme Court fight over the fed a non issue now? One crack in the dam, one peak behind the curtain and then we'll get a full audit. Once they see the garbage being done from what we can look at now we'll get a full audit.

Dream on ya little tart...I recall maybe six months ago someone rebutted a claim that GS owned the US guv with the assertion that they only own two of the three branches of government; there was not one GS hook into the SCOTUS.  Well that's about to change.  Audit that.

Wed, 05/12/2010 - 06:14 | Link to Comment Crummy
Crummy's picture

While I understand his eagerness to claim victory on this and give people a bit of a morale boost and toot his horn, I think it fails to underscore just how much weaker this bill is than the one passed in the House and just how much more those who have been fighting for this, and have joined that fight, are going to have to dig in to make any real changes happen. I think that if the FED and its lobby had given in and let the bill stand they would have an easier time in the long run consolidating power.

The way in which this bill was fought by its opposition has opened a lot of eyes and to claim any level of victory at this point is to close those eyes and send them back to bed. If we play this right, the next big push could be, not for some further audit, but to topple the FED altogether with the full force of a public eager to be intellectually engaged in the more complex machinations that drive this economy instead of leaving it in the hands of a few connected individuals in private for lack of interest.

Wed, 05/12/2010 - 07:54 | Link to Comment weinerdog43
weinerdog43's picture

But don't forget how far we've come so far either.  6 months ago, did you think we would actually have even 1 audit?  This could be the crack in the dike.  (No, not Kagan.)  Once the funny business is exposed, there will be further calls for additional audits.  The pressure on Congress is increasing, not decreasing. 

Wed, 05/12/2010 - 08:31 | Link to Comment Cursive
Cursive's picture

People power, bitches.  We won this battle in the larger war.  It would be naive to think that the most powerful people in the world would roll over without a fight.

Wed, 05/12/2010 - 06:42 | Link to Comment primefool
primefool's picture

It is truly astonishing to me that in a so called democracy - it is so difficult for the Government ( the representative of the People) , suspecting that the central bank is up to all kinds of shenanigans - handing out cash like candy to foreigners and friends - to simply examine the books of the freaking enttity under suspicion. Just stunning. Note - we are not debating whether to get rid of the Fed / get rid of Bennie Mae etc. Simply to check out what is going on. My mind is blown. The Government Of These United States does not have the right to EXAMINE the activities of a quasi-private entity that is supected of TREASONOUS transactions ( handing Trillions out to foreigners without congressional approval - is there a more technically correct word this?).

I mean - its just stunning. In no other country is this tolerated.

Wed, 05/12/2010 - 07:39 | Link to Comment Kina
Kina's picture

I think Senators are two a penny now days. They don't even require the thirty pieces of silver to sell themselves and the country.

 

The other amazing thing about the US is that if somebody/thing big is likely to have committed a crime there has to be decision to investigate or not. In another country the police/regulators would be in immediately to see what was going on.

 

How long have various markets been manipulated?

 

When regulators are hired for their porn and masturbation abilities you know the system is utterly broken.

Wed, 05/12/2010 - 14:36 | Link to Comment milbank
milbank's picture

When regulators are hired for their porn and masturbation abilities you know the system is utterly broken.

Is there like, uh, a civil service test you have to take where these abilities are tested?

Wed, 05/12/2010 - 08:11 | Link to Comment moneymutt
moneymutt's picture

good point, it is stunningly undemocratic and dictatorial/oligarchical...but not new...we have let this go on for nearly a century...with only minor intervention...in the 1970s there was a little heat, we actually get some of the Feds profit from creating our money because of that political agitation...that's it, over a whole century. The constitution is clear, money is to be in our democratic control, for better or worse, we the people are to be the judges of what to do with our currency, it is clearly not to be run secretly by a cartel of private bankers with no oversight whatsoever.

If you listen to Sanders, you can see why he caved, he really, sincerely thinks its important the Fed be independent from Congress, like they are a some fourth branch of govt that was written in the Constitution...

Wed, 05/12/2010 - 07:02 | Link to Comment Miyagi_san
Miyagi_san's picture

It will be a onetime stress test...washed and ironed for your protection

Wed, 05/12/2010 - 11:41 | Link to Comment Crab Cake
Crab Cake's picture

+100

I wonder how/if this will play into the Fox/Bloomie FOIA cases?  We'll see.

Wed, 05/12/2010 - 07:36 | Link to Comment goldfreak
goldfreak's picture

This is a letter I got from Grayson last night, he's declaring victory even though the Vitter amendment was defeated

 

 

Dear XXXXX,

Tuesday, May 11, 2010 10:22 PM

The Senate just voted, 96-0, to audit the Federal Reserve. Soon, we will know what the Federal Reserve did with the trillions of dollars that it handed out during the financial crisis.

A few months ago, such a vote would have been unthinkable. One senior Treasury official claimed he would fight to stop an audit 'at all costs'. Senator Chris Dodd predicted that an audit would spell economic doom, while Senator Judd Gregg attacked accountability for the Fed as "pandering populism".

Today, both the Treasury Department and Senator Dodd support this amendment. As for Judd Gregg, he was just on the floor of the Senate discussing -- of all people -- 19th century populist Presidential candidate William Jennings Bryan.

What happened?

People Power is what happened. We built a coalition of people on the right and the left, ordinary citizens and economists, ex-regulators and politicians, all with one question for which we demanded an answer: "What happened to our money?"

No longer can Ben Bernanke get away with saying, "I don't know."

Now, we're going to know who got what, and why.

Releasing this information will show that the Federal Reserve's arguments for secrecy are -- and have always been -- a ruse, to cover up the handing out of hundreds of billions of dollars like party favors to the Wall Street favorites who brought the American economy to the brink of ruin.

But our work isn't quite done. The Senate audit provision isn't as strong as what we passed in the House. The Senate provision has only a one-time audit, whereas what we passed in the House would allow audits going forward. There will be a conference committee that will merge the provisions from the two bills.

The need for audits and oversight over Fed handouts going forward is great. The financial crisis isn't over, and neither are the Fed's secret bailouts. Earlier this week, the Federal Reserve announced it was going underwrite the Greek bailout by lending dollars to the central banks of Europe, England, and Japan. The loans may never be paid back, the Fed accepts the risk that the dollar will strengthen in the meantime, and the interest rate charged by the Fed is very likely at below-market rates. So such loans are in effect just a subsidy, to bail out foreigners.

The Fed has not been chastened. It is bolder and more of a rogue actor than ever. It's clear that without full audit authority going forward, the Fed will continue to give out "foreign aid" without Congressional or even Executive permission.

And it will do so in secret.

So we will be fighting on to get a full audit from the conference committee.

But let's not lose sight of what we have accomplished so far - real independent inquiry into the Fed, and its incestuous relationships with Wall Street banks. For the first time ever.

Our calls, emails, lobbying, blogging, and support really mattered. We made it happen.

Today, we beat the Fed.

Courage,

Alan Grayson

Wed, 05/12/2010 - 07:55 | Link to Comment weinerdog43
weinerdog43's picture

Hello?  Did you even read the post?

Wed, 05/12/2010 - 09:01 | Link to Comment WaterWings
WaterWings's picture

LOL

Too bad there will never be meaningful, positive change before total collapse. It's our only hope really. Total collapse. The alternatives are far more creepy.

Wed, 05/12/2010 - 11:47 | Link to Comment SRV - ES339
SRV - ES339's picture

Well, it is Gold "freak"... must be some "good stuff"... lol!

Wed, 05/12/2010 - 07:41 | Link to Comment Kina
Kina's picture

Didn't they kill the market then bring it back to life Jesus like, just to show their infinite power? I think when he said they were doing god's work he was telling us he IS god.

Wed, 05/12/2010 - 08:21 | Link to Comment I am a Man I am...
I am a Man I am Forty's picture

One time audit?!  Gimme a fucking break.  What a giant, hunk of shit, fascist oligarchy we live in.

Wed, 05/12/2010 - 08:29 | Link to Comment guidoamm
guidoamm's picture

The United States are on a Fiat Monetary System. If you understand the implications of this fact, then you must perforce admit that government has a vested interest in becoming the largest actor in the economy. That being the case, the Fed cannot and will not be audited. The Fed is the engine that keeps Fiat Money alive hence it keeps the state alive.

If anyone ever allows the Fed to be audited, that would signal the end of the monetary system ergo the end of government.

Nobody in power has any interest is allowing the foundation of our imposed monetary system to be eroded.

Wed, 05/12/2010 - 10:01 | Link to Comment earnyermoney
earnyermoney's picture

S. 3760 picked up 5 votes from the original 32 cosponsors of S. 604. Only need 14 more votes to establish the House version of the bill. I'd like to see ORhamaRod veto his "financial reform" bill because of this provision.

 

Call your Senators to oppose Solicitor General Kagan for the Supreme Court on the grounds she's a Goldman Sach's shill and a champion of the Feds secrecy in the Bloomberg FOIA case.

Wed, 05/12/2010 - 11:34 | Link to Comment living on the edge
living on the edge's picture

This proves a recent article in ZH holds the answer to the financial crisis. The article I mentioned went on to describe how Navy Seal integrity, ingenuity, and logic could solve the Financial Crisis. Allowing the Seals to run the Central Banks would steer us out of this turmoil and not repeat the same mistakes over and over again. 

I agree the Navy Seals are the answer. However the way the article should have read was our gutless president sends in the Navy Seals around the world to simultaneously dismantle all central banks and allow governments to institute sound monetary policies and disciplines.

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