You know when socialist and libertarian politicians line up to battle a common enemy, something interesting is unfolding.
Joining Ron Paul in his 30-year running assault on the Federal Reserve is Senator Bernie Sanders of Vermont – the only senator who openly identifies as a socialist (hey, let’s give Bernie credit, at least he’s honest about it).
Sanders writes on his website that a recent audit of Fed transactions revealed that bailout beneficiaries extended beyond just the big banks, and included the likes of General Electric, McDonald’s, Caterpillar, Harley Davidson, Toyota, and Verizon – what the heck are THESE guys getting a bailout for?!
After years of stonewalling by the Fed, the American people are finally learning the incredible and jaw-dropping details of the Fed’s multi-trillion-dollar bailout of Wall Street and corporate America. As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions and how we can make our financial institutions more responsive to the needs of ordinary Americans and small businesses.
What have we learned so far from the disclosure of more than 21,000 transactions? We have learned that the $700 billion Wall Street bailout signed into law by President George W. Bush turned out to be pocket change compared to the trillions and trillions of dollars in near-zero interest loans and other financial arrangements the Federal Reserve doled out to every major financial institution in this country. Among those are Goldman Sachs, which received nearly $600 billion; Morgan Stanley, which received nearly $2 trillion; Citigroup, which received $1.8 trillion; Bear Stearns, which received nearly $1 trillion, and Merrill Lynch, which received some $1.5 trillion in short term loans from the Fed.
We also learned that the Fed’s multi-trillion bailout was not limited to Wall Street and big banks, but that some of the largest corporations in this country also received a very substantial bailout. Among those are General Electric, McDonald’s, Caterpillar, Harley Davidson, Toyota, and Verizon.
Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations including two European megabanks — Deutsche Bank and Credit Suisse – which were the largest beneficiaries of the Fed’s purchase of mortgage-backed securities.
You can read his full statement here.
So here we are, on QE2 and counting. Keynsian claims that the world was saved from financial apocalypse notwithstanding, we are still hooked firmly on the money printing drug, with a permanent detox unlikely to be around the corner.
Because, flat out, the Fed needs to buy Treasuries in order to keep interest rates low – at nominally higher rates, the cost to service the massive debt would end the game pretty quickly – it’s that simple. So, their only hope is to “QE” relatively quietly, without any “real” inflation in the Main Street economy. Sure, gold is at $1400, and oil is back above $90, but Bernanke & Co seem content to live with this slightly undesirable side effect.
So the question becomes – will the American populous likewise remain relatively content about the Fed’s actions?
Recommended further viewing: A hilarious cartoon spoof on QE2
Hat tip correspondent Dr. Evil for ongoing contributions to this story!