The Fed

Why, oh why did Eliot Spitzer have to go and get himself busted for whoring around? We need critical thinkers on the front lines, not disgraced out of public office.... *sigh*
He questions the power of the Fed and why they are asking for more and why Obama wants to give it to them in a new Slate article.

Some great questions he wishes would be asked (EA):
Where is the legal analysis showing the Fed had no power or insufficient power to intervene to save Lehman Bros.—widely viewed as the failure that precipitated the credit crisis—as it has claimed repeatedly, yet had sufficient power to orchestrate the gift of Bear Stearns assets to JPMorgan Chase? How did it differentiate between the two?

Did the Fed do any analysis of the risk that would result from AIG's potential default, and how did the Fed analyze the risk to each of AIG's counterparties?

When the Fed authorized the first $80 billion payment to AIG, almost all of which flowed directly through to counterparties, why did the Fed not arrange for taxpayers to get equity in the counterparties, rather than the essentially worthless AIG equity? What communications did the Fed have with the counterparties over this period?

What analysis had the Fed done of the general leverage ratios in the financial-services sector and the need for additional capitalization? Had it done any "stress tests" during this period, or did it believe that there would never be an economic downturn?

Since the N.Y. Fed is controlled by the very institutions that were at the heart of the meltdown, and these institutions used the Fed to give themselves hundreds of billions of taxpayer dollars to resuscitate their balance sheets without any public scrutiny, will the Fed release any conflict-of-interest rules it has in place to assure the public that board members do not act on policies that will affect their own corporate interests?

Six of the nine members of the N.Y. Fed board are supposed to be "public" representatives, yet these individuals have all too often been CEOs of major corporations or financial entities. How does the Fed define "public" board members, and what is the process by which those board members are selected?

The Fed itself states that "the safety, soundness and vitality of our economic system" is its responsibility. How exactly are these terms measured? By GDP growth? Bank profits? Job growth? Growth of median household income? Without knowing how it will measure success, how can we measure whether the Fed is succeeding or failing?

How does the Fed believe it can regulate "systemic risk" meaningfully if institutions remain "too big to fail," necessitating that the federal government be an insurer of their risk in any serious downturn?

Has any thought been given to refocusing on a financial services model that has more smaller institutions and fewer mega banks, thus diversifying risk?

Leaving the reins in the hands of those who fucked us in the first place...

THIS is whyipaytaxes.