FDL Action

Add your name: Call for a Real Audit of the Fed, Reject the Watt Amendment

In a last-minute power-play by the banks, Rep. Mel Watt wants to gut a proposal for a complete audit of the Federal Reserve.  A broad coalition of economists and labor leaders quickly stepped up to oppose the Watt Amendment, but we need you to add your voice, as a vote is imminent.

We need to support the Paul-Grayson amendment requiring a complete audit.

Please add your name to our letter, which you can read below.

November 18, 2009

House Financial Services Committee
2129 Rayburn House Office Building
Washington, D.C.  20515

Dear Chairman Frank, Ranking Member Bachus, and Members of the Committee,

During the past two years, the Federal Reserve dramatically changed its operating procedures.  Instead of simply setting interest rates to influence macroeconomic conditions, it rapidly acquired a wide variety of private assets and extended massive secret bailouts to major financial institutions.

There are still many questions about the Fed's behavior in these new activities, including potential cronyism and favoritism in its distribution of many trillions of dollars. As the Special Inspector General for the Troubled Assets Relief Program recently wrote about their bailout of AIG, the Fed's "strategy to pursue concessions from counterparties offered little opportunity for success, even in light of the willingness of one counterparty to agree to concessions."

The Federal Reserve balance sheet expanded to more than $2 trillion, along with implied and explicit backstops to Wall Street firms that could cost even more.  Who received the money? Against what collateral? On what terms  and conditions? The only way to find out is through a complete audit of the Federal Reserve.  That's why we support the Paul-Grayson  amendment requiring a complete audit.

The Watt amendment does not repeal the existing provisions that prohibit a GAO audit of the Federal Reserve. In fact, it adds entirely new additional categories of restrictions. Instead of opening up the Fed's secretive activities to public inspection, the Watt amendment cloaks it in further secrecy.

A vote for the Watt amendment is a vote for more secret bailouts.  We urge you to support Paul-Grayson instead.

Sincerely,

Dean Baker, Economist, Center for Economic Policy Research
William Black, Professor of Economics and Law
Tyler Durden, Blogger, Zero Hedge
Thomas Ferguson, Professor of Political Science, University of Massachusetts, Boston
James K. Galbraith, Economist, University of Texas
Leo Gerard, President, United Steelworkers Union
Jane Hamsher, Blogger, Firedoglake.com
Rob Johnson, Economist
Naomi Klein, Author, No Logo and The Shock Doctrine
Yves Smith, Blogger, Naked Capitalism
Andrew Stern, President, SEIU
Richard Trumka, President, AFL-CIO
L. Randall Wray, Professor of Economics, Center for Full Employment and Price Stability

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