The Trouble With the Fed Is That Too Many Bankers Run It … Not!
By Staff News & Analysis - October 28, 2011

Bernie Sanders: The big banks rule the Fed, here's how to fix it … The independent senator from Vermont is taking aim at the make-up of the Federal Reserve's board of directors, arguing it has too many bankers. At a time when the rally against Wall Street and corporate greed gains momentum, a U.S. government report released last week raises a question few protesters probably think about: Are too many members of the U.S. Federal Reserve board of directors from the banking sector? After all, the Fed regulates many of the very same companies that its members run, and so this potentially poses a conflict of interest, according to the Government Accountability Office. While the report didn't find that these firms directly benefited from the Fed, it confirmed worries that several financial firms and corporations could have gained from their executives' close ties to the Fed. – Fortune

Dominant Social Theme: Here's a simple and profound insight: The problem with the Federal Reserve is its conflicts of interest! If I, Bernie Sanders, independent socialist Senator from Vermont, ran the Fed, things would be much better.

Free-Market Analysis: The duck-and-weave crowd is in full-cry in Washington DC led by the personable Senator from Vermont, "Bernie" Sanders. He's got a plan to fix the Federal Reserve that includes removing "conflict of interest" from its board.

Now he's giving interviews to Fortune magazine (see excerpt above) to burnish his credentials as a radical "Mr. Fixit." He's discovered the Federal Reserve is not what it appears to be (after how many years in Congress?) and is taking steps to deal with the problem. How glad we are! All Americans, no doubt, should be glad as well. There are "issues" with the Fed and Sanders is on the case …

In fact, the problem with central banks is that they print money-from-nothing, increasingly in incomprehensible amounts, and the Fed is the biggest money-from-nothing-printing bank of all. Such tremendous flows of paper money inevitably distort economies, ruin businesses and centralize wealth and power among the elites that run the banks.

Bernie Sanders's remedy for this is to metaphorically throw a paper towel on top of a nuclear core in the throes of a full-fledged meltdown. All over the world, central banking is imploding. The modern fiat-money system is likely finished (as it is currently constructed), though the mainstream media and those in business and power who have the most to gain from the current system refuse to recognize this reality.

Instead, the idea is to promote sub-dominant social (power elite) themes that move the discussion away from the failure of the current monetary system to ways it can be "fixed." This is akin to the "transparency" meme we have discussed of late.

The idea is that government can be a workable force for good if sunshine is allowed to pour over it. As government is force, pure and simple, it is difficult to see how revealing government suasions will do anything to address underlying problems. What shall be discovered will likely increase fear rather than reformation.

In Sanders's case, he has the idea that too many industry bankers – especially from Wall Street – sit on Federal Reserve boards, including the powerful Federal Reserve Bank of New York. We note this is in line with what the Occupy Wall Street crowd has been protesting – the power of the "banksters."

Apparently, it is hip to discover the perfidious nature of private banking power. But one gets the feeling that if an inebriated Occupy Wall Street protestor made a fuss regarding the dangerous influence of the Walt Disney Company, Bernie Sanders would be right in the middle of it, proposing that Donald Duck be banned from the halls of financial power. In Congress, timing is all.

Yes, indeed … Sanders apparently has just NOW discovered that Wall Street has considerable influence over the Fed. He's convening a team of "top" economists to draft legislation for purposes of reforming the Fed. Here's some more from the article excerpted above:

JP Morgan Chase could have benefited from its chief executive Jamie Dimon's position on the board of the Federal Reserve Bank of New York. According to the GAO, the bank received bailout loans from the Fed while it served as one of the clearing banks that facilitate payments for the Fed's emergency lending program.

Now self-described Democratic socialist Sen. Bernard Sanders of Vermont, who spearheaded the report, has gathered a team of top economists to draft legislation to reform the Fed. Sanders (or "Bernie" as most call him) joins Massachusetts Congressman Barney Frank and others in their call to restructure the Fed as the agency comes under increased scrutiny in recent years.

Sanders is one of only two independents in the U.S. Senate. The 70-year-old politico has long slammed the excesses of Wall Street and U.S. businesses. Only recently, as The Guardian points out, has he become less of a political outsider. Fortune caught up with the senator this week over telephone from his home state of Vermont. He talks about the inequitable influences of Wall Street and how to give the rest of America more say over policies to restart the U.S. economy.

As we pointed out recently in "Limited Hangout at the Fed vs. the Internet Reformation," there is a good deal of activity in Congress to "reform" the Fed. Congressman Ron Paul is conducting an audit. Rep. Dennis Kucinich (D-Ohio) has introduced a bill to make the Fed an entirely public entity. Sanders is convening a committee of "experts."

God help the long-suffering American public if Sanders and others are successful at "restructuring" the Fed to remove "conflicts of interest." What this apparently means is that people like Sanders will have more power over money printing than Wall Street types.

After Thoughts

This, then, is reform. Bernie Sanders and his ilk will assume the reins of the Fed, pushing out financial types. The system will grind on until there is virtually nothing left of the country Sanders purports to love but is simply sabotaging with his phony legislation and disingenuous reform. End the Fed.

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