Looting the System

Bernie Sanders is not someone I quote very much.  Actually I don’t remember ever quoting anyone currently in the United States Senate. That the first one would be the only avowed Socialist, and that I would be in complete agreement with him, is a head-spinning moment.

But his summary of the recent GAO audit of the Fed (pdf) is very much to the point.

The Fed Audit

Bernie Sanders, U.S. Senator for Vermont, 21 July 2011 (Hat Tip: NC)

The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

Among the investigation's key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. "No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president," Sanders said.

The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans...

The investigation also revealed that the Fed outsourced most of its emergency lending programs to private contractors [like JP Morgan Chase, Morgan Stanley, and Wells Fargo], many of which also were recipients of extremely low-interest and then-secret loans....

The looting of the system is absolutely amazing.