You can't make this stuff up:
“It is not obvious at all why that is a Treasury responsibility or even appropriate why the Treasury would undertake that kind of study,” said Robert Eisenbeis, chief monetary economist at Cumberland Advisors Inc. in Vineland, New Jersey, and a former Atlanta Fed research director. “The Fed was created by Congress and it is not part of the executive branch.”It's not often you find a statement that is so technically correct yet thoroughly fatuous and divorced from reality. The first sentence need not even be objected to, save the obvious point that the treasury, in theory at least, represents the public and the fed represents...
Yes, the Fed was jammed through Congress and created as an "independent" system. Of course the word independent is in quotes because it's nonsense and very misleading. The Board of the Fed - seven members nominated by the executive and rubber stamped by the Senate - has never been independent. This is all prattle to keep the flock docile, misinformed, and confused; in one breath the fed is "independent" to provide cover for the central state's desire for war, welfare, and votes while convincing the world that they should have confidence in U.S. monetary policy and accept the western financial Imperium of "managed" globalization, current account surpluses, and inveigled capital inflows to the U.S. But in another breath the fed hides behind its status as government regulator and central bank to disguise the fact that it's also a cartel keeping a private fractional-reserve, credit system alive. It has almost always been a banker's bank; a re-reflater; a lender of ... resort. Why did Lehman/Bear fail while AIG (a black hole of derivatives) was infused with public funds? Could it have been for whom they(AIG) wrote CDS? Why did they setup program-after-program, alongside direct bailouts, to aid Primary Dealers and non-U.S. and/or non-commercial banks? TARP, TAF, TALF etc. etc. Monetizing the mortgage market? All for the public good!
The Fed has always had - and still does - two masters: 1) the executive branch and 2) the financial establishment. The only time congress gets involved is during their perfunctory, embarrassing monetary policy hearings or when a maverick has the guts or naivete to attack the institution through legislation or public relations. But even then, it's usually from a populist/socialist perspective in which the fed eventually becomes slightly more of a central planner than a cartel. Actually, the history and structure of the institution can best be examined as something of a balancing act between cartel and central planner. A government-run, private syndicate - Contradiction? Not really.
“The institution is trying to keep a low profile,” said Vincent Reinhart, a resident scholar at the American Enterprise Institute in Washington and the former director of Division of Monetary Affairs at the Fed Board. “To publish a report now invites comment on that report.”
No! Really? Now, what type of person/institution wants to keep a low profile and avoid outside commentary? One operating for the collective good of course.
Shocking!..“Allowing local bankers to play a leading role in selecting reserve bank presidents is the most worrying aspect of the current system,” Lou Crandall, chief economist at Wrightson ICAP LLC, wrote to clients in July.
District bank presidents are nominated by committees made up of people whose institutions the nominees may have supervised.
“The conflicts of interest inherent in the current system are glaring,” Crandall said.
