Before You Appoint Ben, Audit Ben
December 2, 2009 - 1:37pm ET
In the above video, Robert Borosage lists the questions senators must get answers from Ben Bernanke if he is to earn re-appointment to chair the Federal Reserve. Below is a related action campaign emailed to Campaign for America's Future supporters earlier today.
Tomorrow, the Federal Reserve Chair Ben Bernanke appears before the Senate Banking Committee which must vote on his nomination for a second four-year term.
Yet, Bernanke wants the Senate to rehire him as the taxpayers' banker without allowing the public to see what he's done with our money. That makes no sense.
As head of the Federal Reserve, Bernanke was blind to the dangers of the $8 trillion dollar housing bubble that led to the crash. The Senate Committee must probe why he made that mistake, and what he has learned from it.
But once the crisis hit, Bernanke took unprecedented actions. The Federal Reserve took on over $1 trillion in toxic bonds and other assets from banks. Trillions more were committed in guarantees and swaps to prop up failing Wall Street banks.
But with trillions committed to private companies, neither the public nor the Senate has any idea where the money went, what the terms were, who got what and why.
Clearly before Bernanke's nomination can be considered, the Senate should know what he did with the dough.
Letting Wall Street run wild is what allowed Main Street to get trampled. If we ever are to end the bubble economy, we must first end the secrecy.
The Senate must not approve Bernanke's re-appointment to the Fed without also approving transparency for the Fed.
Bernanke argues that auditing the Federal Reserve will constitute a "takeover of monetary policy" and undermine the strength of the dollar. But auditing does not strip the Fed of its monetary policy authority - nor is there any demand the Federal Reserve accelerate its release of its deliberations.
Deciding to raise interest rates, however, is a lot different than deciding to commit trillions to prop up private banks - without a vote of Congress and without accountability.
In a democracy, that simply can't remain secret. Bernanke acted in a dire emergency. Perhaps everything he did was necessary. But heroic or not, these actions cannot remain secret. They must be reviewed - and should be before the Senate even considers the Bernanke nomination.
Reckless behavior by Wall Street banks, aided and abetted by the Federal Reserve and the regulators who were asleep on the job, nearly pushed the global economy into the abyss. Then trillions were committed to private banks and insurance companies by the Federal Reserve to stave off the collapse.
Secrecy did not protect us from the crisis; secrecy will not prevent it from happening again. It is time to open the books.
Help us spread the word about these important stories...
Email to a friend
Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future