Today a right-left coalition scored a victory for the American people when Senators voted 96-0 to audit the Federal Reserve.
The Center for Media and Democracy’s Wall Street Bailout Tally shows that since 2008, the U.S. government has flooded Wall Street banks and financial institutions with $4.7 trillion dollars in taxpayer money, mostly in the form of loans from the Federal Reserve. The Fed has never told us which firms got these loans and what type of collateral American taxpayers got in return. This will now be revealed. We will also get an accounting of the Fed’s “stealth” bailout of Fannie Mae and Freddie Mac.
It is important to note that in November 2008, Bloomberg News submitted a Freedom of Information Act request for the most basic of bailout information, but the Fed stalled forcing Bloomberg into court. Two sets of judges have ordered the Fed to turn over the information, but the Fed keeps stonewalling, appealing the case again last week. The Senate bill now forces the Fed to turn over this critical information. Independent Senator Bernie Sanders of Vermont pulled together a right-left coalition that got the job done.
Even though the Senators were not able to garner enough support to secure a regulator annual audit as they had hoped, their measure broke through the Fed’s stonewall and will reveal important “Secrets of the Temple.”
But More Needs to be Done! Defend Lincoln Language
Late in the game, Senator Blanche Lincoln (D-Arkansas), Chair of the Senate Agriculture Committee, demanded that provisions be put into the bill that would force the biggest banks to spin off their swaps (or derivatives) desks into a separate entity. That entity can remain part of the bank holding company, but it no longer has access to the Federal Reserve's flow of funds, FDIC insurance and the taxpayer guarantee.
In one fell swoop, her measure effectively forces banks to spin off their destructive gambling arms, protects the taxpayers and downsizes the behemoth banks. What's not to love? The howls from Wall Street could be heard in Wisconsin. Senator Judd Gregg is offering an amendment to strip this language from the bill, and Senator Chambliss will offer other weakening amendments. If you have a chance, tell your Senators to support Lincoln and defeat weakening amendments, the Senate switchboard is (202) 224-3121.
Support Merkley-Levin, a Ban on Conflict-of-Interest Trading
Also ask your Senators where they stand on the “Merkley-Levin Amendment,” cosponsored by Senators Jeff Merkley and Carl Levin. This amendment would stop banks from engaging in Goldman-Sachs-style bets against their own clients. Reining in this practice, called “proprietary trading,” would significantly strengthen the financial reform bill. Other great amendments are in the works if Senator Reid will leave enough time for meaningful debate, including Senator Dorgan's measure to ban "naked" credit default swaps, the worst "weapons of economic destruction." Tell the Senate to "Break Up the Banks" at BanksterUSA.org, if you have not yet had a chance to contact your Senator.