Sanders Concerned White House May Kill Fed Audit Amendment

If the Fed spends taxpayer money they should be audited.

If that's the criteria, then they shouldn't be audited. They don't spend taxpayer money. Not to be a jerk about it, but the fact that you put it in those terms suggests you aren't well informed enough about the Fed and how it works to be out here indignantly demanding changes to the system.

Perhaps more importantly, they are audited. But Congress specifically, purposefully exempted certain very limited activities from these audits, because publicizing them has the potential to cause market panics, particularly when the financial sector is already in crisis and the Fed is engaging in extraordinary lending. It would be a Very Bad Thing to remove those exemptions, and we would all get to see why the next time a financial crisis hit. As I've said before it's not a bad idea to open the books after the fact, once things are running smoothly again. But we need to be exceptionally careful about it.

Yes, while we're at it let's just dismantle the financial system. The rest of the economy has nothing to do with it, right? That'll teach those greedy bastards!

I prefer this list. Not only is it far more accurate (and not so fantasy-land...you thought single-payer was going to go someplace!?) but it's also far more comprehensive.

Oh, and your suggestion that there aren't any "meaningful provisions" in this bill is downright laughable. Derivatives clearing, consumer protection, capital requirements and the like all don't matter because Obama doesn't want to show the whole market the Fed's dicount window transactions? I'll bet you think HCR ended up being a worthless bill too. You people would bitch if they hanged you with new rope.

The arguments I have read here by hunter and others against the Sanders Amendment rest exclusively on fears that such transparency might have greater negative consequences than the current secrecy, in the form of 'stigmatization' or politicization.

Well, the "stigma" is only a smallish part of it. As I see it the far bigger issues are the reaction of the stock market and the reaction of depositors. If the public at large could see which banks were getting huge discount window loans, those banks' stocks would crash and depositors would run on them. It is very nearly impossible to overstate the disaster such a scenario would present.

In response to the valid rebuttal that the current bookkeeping is not, in fact, opaque but open to direct manipulation by the very players who benefit most from it by gaming their insider knowledge and influence for personal and corporate gain...

This is the first time I've heard this rebuttal, and I'm unclear as to whether the "players" you're talking about here are Fed officials or big bankers. If it's the latter, I'd like to see your evidence that they have access to records of the Fed's monetary policy actions. If that's really true, it's extremely dangerous. But it's not. If on the other hand you were referring to Fed officials, I'm not quite sure what specific things you're accusing them of, but I should note that it is highly illegal for them to enrich themselves with these activities.

...the fallback position seems to rest entirely on the proclaimed wisdom and expertise of those players that may not be shared by outsiders less intimately familiar with the complexity.

That's not really right. The real position is that someone has to manage the money supply, and the public can't see it happening or there will be panics. So yes, we understand that there is danger of corruption and abuse (which is precisely why there is an intricate system of checks and balances within the Fed itself) but the alternative is to not do monetary policy. Many countries have tried this (including our own for about 50 years starting with Andrew Jackson) and it has never worked worth a darn (we had 3 major panics in those 50 years). So we accept an imperfect system and the possibility of some measure of corruption because we aren't willing to throw the baby out with the bathwater.

It should be immediately clear why Sen. Sanders and I (and 67 other Senators) remain unpersuaded by all the fearmongering.

What it looks like from over here is that you drastically underestimate the fallout that would have occurred if the market had seen the Fed injecting liquidity during the crisis. I understand wanting to hold people accountable; that's why I keep suggesting either a one-time audit or a system of time-lagged audits for crises. But it really isn't that hard to see why it's a bad plan to just pull the exemptions that Congress put in for really good reasons.

Yes, Obama's reluctance to open up monetary policy to public scrutiny and the panics which will accompany it is obvious evidence for his sycophantic handmaidening to rich people. It couldn't possibly be because this issue isn't so simple as bankers=bad.