Openness and Transparency

Obama *says* he wants openness and transparency. Glenn Greenwald has a great post showing that his actions don't follow his words: http://www.salon.com/opinion/greenwald/2009/06/... .

It is just like his stance on excutive power.

Excutive power is awful until you are the excutive.

Upholding the status quo is his version of openness and transparency.

Reminds me of that old joke:

"How do you know when a politician is lying?"

"Their lips are moving."

At this point I only see a couple of possible options for Obama:

1. Either he really believes what he's says and what he does correlate and support one another, in which case he's a complete idiot.

Or

2. He doesn't really believe that what he's says and what he does correlate and support one another and he's simply saying what he thinks people want or need to hear and whatever actions he takes, he takes, in which case he thinks the people are complete idiots. And...he's an evil liar.

Sorry, in a rather blunt mood today.

I beg to differ. The Fed is privately owned (and that's probably the only correct thing the Birchers say about it).

I'll grant you that the Fed's not perfect, and I would like to see it have to publish audited annual reports as companies listed on the stock exchanges do. But let's be wary of changes that would amount to nationalization.

"And so it's puzzling to me sometimes to hear the standard conservative critique of what we're doing, when essentially every step we're taking involves cleaning up the mess that we found when we arrived here at 1600 Pennsylvania Avenue."

And, it is so puzzling to me to continue to see the standard socialist denial or acknowledgement that the mess found at q600 Pennsylvania Avenue, was a mess of their making.

Openness and transparency my butt.

Like John Galt said above, the Fed is indeed privately owned. However, I have no idea what the Birchers are saying about it; but, I wouldn't dismiss the obvious.

A privately owned business we should be reminded has one basic purpose and that is to make a profit for its owners and/or shareholders. If that owner and/or shareholder is not "we the people" of the USA, then who is it and who is the Fed to profit?

Conclusion, the Fed is not working for the benefit of the American people.

Those open and transparent people in D.C. know that full well.

Because talk of openness and transparency is a lie?

From the faq of the FED webpage:

Who owns the Federal Reserve?

The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.


As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. Therefore, the Federal Reserve can be more accurately described as "independent within the government."


The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.


Return to questions

Russ, you're right about the Fed's lack of openness and transparency. Actually, it's worse because there is no accountability, to the point that apparently Bernanke has denied Congress any relevant information that could justify his actions in the past two years. If anyone has some of this information I'd appreciate it greatly to know how to get a copy.

Some economists have praised Bernanke for his actions but all the comments I've read do not have any evidence supporting their position.

Russ,

As noted above, the Fed is not technically a government agency. I agree that the fed is the least transparant entity around. What do you think about Ron Paul's bill to audit the fed? Do you support it? will it do any good if it passes?

The Fed is a communist central planning agency. It's that simple.

In Geithner's babel did he mention anything about Fannie or Freddie? Nope, he just kicked the can down the road. What about the rating agencies?

E. Barandiaran,

Uh-huh, and when the USA pays interest (profit) on the loans that the FED creates out of thin air, where does this non-profit put the profit?

Russ,

Great, simple post. Questioning the Fed is the most important issue of our day, and the least addressed by the media, politicians, or the citizenry.


Chuck is correct. The FED is a central planning entity. But commentor John Galt is correct, our next incarnation may be even worse. Given Obama's record, we don't want him overhauling the system, despite the current flawed status.

I vote NSA as top.

The Federal Reserve is no more a government agency than Federal Express.

I think the reason why they wanted to move the regulatory authority into the Fed was that they perceived the Fed to be far more responsive than any agency in the executive, not to hide anything.

That having been said, I agree completely - and even if they didn't intend to hide things we have to understand that that will be the ultimate effect. Or, if it's not the ultimate effect and the Fed does become more open to the democratic process, that could be very bad as well. Central bank independence is paramount for ensuring responsible management of monetary policy - and as soon as industry lobbyists start coming in to try to shape tomorrow's regulatory structure (which they inevitably will), not only is there the usual risk of regulatory capture - there's also a risk of a monetary policy lobbying effort which will invite Congressional scrutiny and destroy any prospect for a de-politicized monetary authority. I'm personally not worried about the prospect of inflating away the debt right now... but if we open up the Fed to lobbyists and they're followed by Congress and the administration, that could become a very real risk.

The great thing about being a politician in today's day and age, with the cult of personality and loyal followers, is that you don't actually have to be open and transparent. You just have to make speeches claiming that's what you want!