The Fed Accountability Fight Is Not Over

Isaiah J. Poole

Though progressives have not succeeded in blocking Ben Bernanke’s renomination as chairman of the Federal Reserve—which was always a long-shot proposition—we now have on the historical record a detailed critique of his record during the financial crisis that we might not have had if a few key senators—starting with independent Vermont Sen. Bernie Sanders—had not raised a roadblock to the renomination rush.

Still, a detailed critique on the Senate floor is not an audit of the Federal Reserve. We still do not have answers to key questions about the commitments made with taxpayer dollars to prop up Wall Street. Taxpayers deserve those answers, and that is why the fight must continue to have the Senate adopt the provision in the already-passed House financial reform bill that would allow for an audit that answers those questions.

“It is incomprehensible to me that the chairman of the Fed could lend out trillions of dollars” to Wall street financial institutions “and when I asked [Bernanke] who got the money, he said, ‘Sorry, the American people don’t have the right to know that,’ in so many words. ‘I’m not telling you.’ How can you have confidence in the leadership of the Fed when there is no transparency?”

Bernanke has offered some superficial nods toward transparency, but even those are less than meets the eye. In the wake of the controversy over orders from the New York Fed that AIG not disclose payments of federal dollars to banks to cover their losses on deals they had with AIG, Bernanke agreed to allow a Government Accountability Office audit of the AIG bailout. The truth is, as the Wall Street Journal pointed out, all Bernanke was really doing was inviting the GAO to do something that it already had the right to do.

What neither the GAO nor anyone else has the authority to do today is to open the Fed’s books and get an unfettered view of where our money has gone and why.

A major obstacle to allowing that to happen is Sen. Christopher Dodd, D-Conn., the chairman of the Senate Banking Committee and a big booster of Bernanke during the confirmation process. In addition to heaping praise on Bernanke on the Senate floor today, Dodd, according to a report in The Huffington Post, was actively working to keep the House-passed audit language from appearing in the Senate’s financial reform bill.

So we will have to keep the issue alive, calling members of the Senate and letting them know that now that you have agreed to renominate Ben, it is time to audit Ben.

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