Editorial: Federal Reserve Out of Control – Rejects Another Public Review

The more the Federal Reserve digs in and resists or rejects all attempts at reviews, the more damning the idea becomes that they have something to hide. This time they rejected a request from Treasury Secretary Timothy Geithner for a public review of the structure and governance of the institution.

When you consider the sole argument against all of this is the “independence” of the central bank, you realize it’s operating above and beyond what even the government of America is, as the three branches of the government were set up for the very purpose of checks and balances so no one of them could do what it is the Federal Reserve is attempting to do: whatever they feel like doing.

It’s dangerous for any person or organization to be vested with too much power and autonomy, yet the Federal Reserve, its board, and current chairman Ben Bernanke, continue to battle against their power being weakened and divested in any way, as well as anyone being allowed to look at its inner workings through government audits; getting a look at what is involved in making their decisions, among many other unknown and secretive things going on in the organization.

Much of the impetus behind this initiative from the Treasury Department came from concerns over Ben Bernanke going far beyond his delegated authority, to bail out businesses like those in the auto industry, along with AIG and Bear Stearns, which aren’t part of its mandate. Of course bailing out the financial industry isn’t part of its mandate either, but these other industries are easier to identify as obvious to not being related to the Federal Reserve and its stated purpose.

As far as relating to governance and structure of the Federal Reserve, that’s referring to the role local banks are playing in selecting presidents at the reserve banks. There are conflicts of interest because nominees for those positions have in a number of cases supervised those at these institutions where people on committees voting for them – know them.

Originally the review was agreed to by a number of central bank officials, but after the ongoing bogus allusion to the independence of the Federal Reserve being threatened, they dropped their support and are now fighting it again. Again, there is no way the Federal Reserve should be allowed to be independent; it’s power is too great as it is, and they need to be completely reined in until it is ultimately dismantled and ended. This is another look at why this must happen and why.

Oddly enough, this review was partly initiated from the proposal by the Obama administration to further the role of the Federal Reserve in tracking risks in the banking and financial system; specifically among the larger corporations.

A growing number of lawmakers are becoming not only uncomfortable with the secretive Fed, but are strongly resisting increasing its powers after the outrageous decision by Bernanke to basically bailout whoever he decides to, even though he doesn’t have the authority to. That’s power out of control, and it needs to be addressed as soon as possible.

Leaders in Congress have propose an alternative to all this, by suggesting a council or regulators be created which would have authority over financial practices of the huge banks.

Either way, the more the government attempts to interfere in the markets, the more problems they create. But as for the Federal Reserve, it’s close to going renegade, and the idea that no one in the government is allowed to know what it’s doing has nothing to do with independence, but power that’s gone out of control.