Since when (well I actually know "when") do a bunch of private bankers have the damn right to control and manipulate our economy... free from oversight or intervention by our own government ?

What a crock of $hit. THE FED SHOULD BE ABOLISHED.

The Fed exists for one reason and one reason only... the enrichment of the multi-billionaires that own it... and the extraction of as much money from the economy for its own end as possible.

On top of that the Fed plays politics by manipulating the economy to the favor of one party/candidate over another... again free from any oversight.

Many of us here predicted this trainwreck... saw it coming down the track THREE OR FOUR YEARS AGO. There is NO WAY that Greenspan, unless he is a complete and total idiot, could NOT HAVE KNOWN what he was setting up the economy for. It is, and has been a house of cards built on artificially low interest rates... it always has been.

THE FED is to blame for the mess we're in... THEY CREATED IT... and yet, what are they doing, THEY ARE BAILING OUT FAILING BANKS (Bear Stearns, et al) ON THE TAXPAYERS BACK. Damn 'em all to Hell... (sorry... I'm angry)... THEY CREATED THE MESS, THEY PROFITED FROM IT... and THEY should be the ones PAYING FOR IT. NOT US.

It is WELL PAST TIME to ABOLISH THE FED.

I may have to agree with you, but not sure what will take its place as of yet. Also abolishing it now would create a whole set of problems. I am also unsure what the effects are and how catastrophic it would be.

At the very least...now, and in a transitionary process, the Fed should come under government control.

The government manages to control everything else.... yet allows the arguably most important element of economic growth and control to remain completely independent.

Somebody (actually several somebodies) was bought off.

Capitalism.... yeah right. How can you have true capitalism when the engine that drives capitilism is an independent, unregulated, privately-owned monopoly.

Why stop with abolishing the Federal Reserve system?

Let's ban the internal combustion engine, electric light bulbs, and microwave ovens too.

The Fed is basically an independent central bank, as central banks in many countries are. The Bank of England is independent, and I believe that the EU bank is. Directors are appointed by the government but they do not serve at the pleasure of those governments, they are autonomous.

I am not an expert here but I think that the Fed is different in its relatively decentralized structure, with its constituent banks. But the Fed board runs monetary policy. And it is not a private business, it is an autonomous public corporation. It does have private banks as "members" (specifically the are "members" of the twelve regional banks of the Fed, which do not control monetary policy), but they don't earn profits by being members, other than earning interest on the nontransferable "stock" that they purchase to become members.

For what they are worth here are two sites to look at:

http://en.wikipedia.org/wiki/Federal_Reserve_System

http://publiceye.org/conspire/flaherty/flaherty4.html

http://publiceye.org/conspire/flaherty/Federal_Reserve.html

I am not saying that the Fed has been necessarily doing everthing right, or that Greenspan was a God (in fact I think he made some huge mistakes) or that the idea of major reforms of the Fed is inherently nutty. But it seems to me that there are some misconceptions about the Fed out there.

We'll we don't need a Fed to print money (actually, to tell the government to print money).

We don't need a Fed to dictate monetary policy to us... when they are a failure at doing so.

Why should we have our a completely independent, for-profit, body of wealthy elitists dictate policy for their own enrichment ?

That may look good on paper... but that's not what underlies it from what I've read. A little snippet:


I don't profess to be an expert... but everything that I've heard or read implies or directly states that control of the Fed rests in private hands... appointments and such aside....

Untill after this election, the issue needs to be kept at an abstract and general level of analysis.
Democrats need to campaign on the need for major reform in the Regulatory part of the Federal
Government but stay from concrete proposals like doing away with the Federal Reserve which can
so easilly be distorted.

I don't have any reason to doubt any of this. Therefore, I think this is the kind of issue which needs to be handled carefully.

It is, only the government is under the control of the same who own the Fed.

Yes... omitted that little tidbit didn't I ?



And... Hillary is the "Biderberger Endorsed" candidate. Hmmmmmm....

We need the Fed, they serve a vital purpose. It's like saying we don't need the executive branch because the administration is screwing things up led by an idiot who thinks we need tax breaks to vinaigrette the employifying of small business.

I agree with Arne's comment that Alan Greenspan was by no means a God. However, he had a lot of years to develop an 'instinct' for finding logical (or at least well-founded hypothetical) solutions to economic crises.

Unfortunately, even with his extensive education and employment background, I think Federal Reserve Chairman Ben Bernanke has not yet developed this same instinct. At this point, his "fix" to everything seems to be to throw money at it.

For instance, it made absolutely no sense to me to lower the prime rate in an attempt to solve the mortgage crisis. I do not think Greenspan would have handled it this way. Already over-extended homeowners who bought more than they could afford in the first place -- well -- sometimes it has to hurt for awhile to make things right. Yup -- I do indeed believe there are a lot of predatory lenders who should be held responsible, but homeowners who over-extended themselves should bear some of the brunt of their poor judgment. Bailing them out is not a cure -- it is enabling them.

This is simply the opinion of another suffering consumer -- just as we all are.

Well just how would you employify small business?

What we need across the board in this country are returns to the regulations to protect the citizens from the corporate elitists and the idiots who pander to them.


Love your new words, Tom. Isn't there a website with contests for such?

I don't think we should just bale out everyone who is threatened with foreclosure. My neighbors were foreclosed on, probably because they simply could not afford their mortgage, and weren't all that prudent besides (my wife remarked on the nice pickup truck they bought). But when you have this many threatened then I think you need aid a good many, if not all of them. The idea of using the FHA to aid banks who will write down the mortgage seems like a good one to me. Taxpayer's funds are not directly involved, although there is some risk, and a lot of people will probably save their homes, if not everyone. The banks will lose money, but probably not as much if they foreclosed on all of those people. Foreclosure involves big costs to banks too.

It's a complex problem for which both government and the Fed combined have only a minor (as opposed to controlling) role. Parts of it would be tax breaks for R&D, infrastucture expansion and rebuilding, disincentives for offshoring, small tax incentives for job creation (not subsidizing, just a minor help with the cost), easing the tax rates back up (as opposed to either letting them sunset or making them permanent), ending most of the contractor work for military and intelligence (more cost effective to do it in house, reduces deficit) and NO MORE RATE CUTS, stable then as soon as possible start raising them to around 6% to provide a stable long term business environment.

Thanks! Yes, it's called WhiteHouse.gov, just go to speech transcripts.

Much of the mess we're now facing was created by none other than Alan Greenspan.

So... was it ignorance... or with foresight and the hope that he'd be long gone before the $hit hit the fan...



They don't call him Helicopter for nothing.



So why should taxpayers be expected to bail out the banks... and yet do nothing for the homeowners who are losing their homes because of this mess ?

Banks and the overall monetary system needs management... but management that is not basically free of intervention, not subject to any repercussiong for their total screwups, not autonomous, that is subject to an overall economic control that dictates to the Fed what it can and can't do. Yes Congress has some oversight... but that is basically like the blind leading the blind. Finally, elimination of all outside intersts by divestiture from ANY ownership or control from outside parties.

There's a very good reason no central bank in the world is set up the way you advocate, it couldn't possibly work because it would have to become its own self serving bureaucracy.

It already is...

My argument is that, at the very least, there should be more oversight and less autonomy.

Who are they trying to kid... they take the M3 off the record and pump money into the economy faster than it can be printed, and then act like they don't have a clue when the fecal matter finally hits the fan.

Either somebody is lying... or nobody is looking. Or both.

I do not by any means believe that banks should be bailed out -- not at all, believe me! I also think the Bear Stearns bail out stinks!

However, I do think homeowners who knowingly over-extended themselves by knowingly mortgaging themselves to the hilt for a home they knowingly cannot afford -- yup -- they should bear responsibility. Every action has a consequence. There's always been a general rule that to determine how much house you can afford, the sales price should be roughly 2 1/2 times your total household income. I've read many stories of homes being foreclosed on that, for example, have owners making a total of $50,000 a years --- but their home was mortgaged with a sales price of $350,000? Do the math! There are 2 culprits here -- the lender who offered the loan -- and the buyer who was foolish enough to accept it.

Sorry if this sounds cynical, but IMHO, I, as a responsible taxpayer, do not believe it is my responsibility or anyone else's to bail out businesses or banks who are simply greedy or irresponsible homeowners who simply want to "keep up with the Jones'".

RP would agree with you.

Don't get me wrong... I have little sympathy for those who went in over their heads and now find themselves between a rock and a hard place.

But, they are only half the equation. Unless they fraudulently completer their loan application, the banks were the ones in the position to have known better than to make the loan in the first place.

But... my main issue is, why should banks get preferential treatment over ordinary citizens.

Respectfully, you're talking there of lunatic buyers and estate agents on crack.
They don't represent even a one digit figure of the market.

As to the limit of over-extension, how do you determine it ? How should people know about it ? Debt exists until it is written off, there is no physics involved, if we except some asteroid colliding with earth. Writing off is NOT the responsibility of those who are given credit. It's a decision and thus the responsibility of those who own the debt. Nobody can be held responsible for needing anything.

For the homebuyer, it's a "coke or crack" situation, you buy what the market offers at whatever price you can afford.

Yes and Home Buyers vary tremendously in Awareness, one component of which is Making Explicit
What Is. The Government needs to link financial guarantees of Home Loans to effective and efficient Consumer Education.