Thursday, December 3, 2009

Bernie Sanders Blocks Bernanke Confirmation... With Bi-Partisan Support. The First Step in Ending the Monetary System?

Press Release: WASHINGTON, December 2 – Sen. Bernie Sanders (I-Vt.) today placed a hold on the nomination of Ben Bernanke for a second term as chairman of the Federal Reserve. 

“The American people overwhelmingly voted last year for a change in our national priorities to put the interests of ordinary people ahead of the greed of Wall Street and the wealthy few,” Sanders said. “What the American people did not bargain for was another four years for one of the key architects of the Bush economy.” 
As head of the central bank since 2006, Bernanke could have demanded that Wall Street provide adequate credit to small and medium-sized businesses to create decent-paying jobs in a productive economy, but he did not. 

He could have insisted that large bailed-out banks end the usurious practice of charging interest rates of 30 percent or more on credit cards, but he did not.

He could have broken up too-big-to-fail financial institutions that took Federal Reserve assistance, but he did not. 

He could have revealed which banks took more than $2 trillion in taxpayer-backed secret loans, but he did not.

“The American people want a new direction on Wall Street and at the Fed. They do not want as chairman someone who has been part of the problem and who has been responsible for many of the enormous difficulties that we are now experiencing,” Sanders said. “It's time for a change at the Fed.” 

The Federal Reserve has four main responsibilities: to conduct monetary policy in a way that leads to maximum employment and stable prices; to maintain the safety and soundness of financial institutions; to contain systemic risk in financial markets; and to protect consumers against deceptive and unfair financial products. 

Since Bernanke took over as Fed chairman in 2006, unemployment has more than doubled and, today, 17.5 percent of the American workforce is either unemployed or underemployed. 

Not since the Great Depression has the financial system been as unsafe, unsound, and unstable as it has been during Mr. Bernanke's tenure. More than 120 banks have failed since he became chairman.

Under Bernanke's watch, the value of risky derivatives held at our nation's top commercial banks grew from $110 trillion to more than $290 trillion, 95 percent of which are concentrated in just five financial institutions. 

Bernanke failed to prevent banks from issuing deceptive and unfair financial products to consumers. Under his leadership, mortgage lenders were allowed to issue predatory loans they knew consumers could not afford to repay. This risky practice was allowed to continue long after the FBI warned in 2004 of an "epidemic" in mortgage fraud. 

After the financial crisis hit, Bernanke's response was to provide trillions of dollars in virtually zero-interest loans and other taxpayer assistance to some of the largest financial institutions in the world. Adding insult to injury, Bernanke refused to tell the American people the names of the institutions that received this handout or the terms involved.
“Mr. Bernanke has failed at all four core responsibilities of the Federal Reserve,” Sanders concluded. “It's time for him to go."

YAY! I don't know if this hold will have much effect in the long run. But it is good to see a progressive who does SOMETHING besides sigh and roll over when the government gives the moneyed elites yet another gift. It is also encouraging to see that he has bi-partisan support and is not just a voice crying in the wilderness. 

The Fed is too secretive an institution and needs to be audited, especially since it has so much of our tax money. We the People have the right to know what it is doing. Bernanke is right that this audit move is the first step in a campaign to destroy the Fed, but this is a good thing. As long as we are going to have a monetary system--remember that I am for abolishing money altogether--we should return to the constitutional system of government-issued money. Right now our money is issued by the Fed--look at a dollar; it says Federal Reserve Note--and lent to the government at interest. The Fed is a private institution owned by its member banks that are also private institutions. Thus, even if the government were not engaged in deficit spending, it would still be paying interest on the money it uses, because it is borrowed from a private entity--The Fed.

It is vital for Americans to understand the private nature of the Fed and its unconstitutional role in our economic system. Because if the Fed ever goes bankrupt, it will be a private institution that has gone bankrupt, not the government.

Bernanke should not be reappointed. By wanting to reappoint him, as by escalating the war in Afghanistan, President Obama has shown himself to be the black (and more articulate) George W. Bush, a servant of the moneyed elite, not the people who elected him because they wanted change. 

Once a thorough audit has revealed how the Fed has lined the pockets of its member banks and their friends with our money, it should be dismantled. The monetary policy of the nation should not be in the hands of a bunch of unaccountable privateers. The US Treasury should make our money and distribute it to public and private entities interest-free. States should set up banks, like North Dakota has done, to take care of the business needs of the people of their state. (North Dakota is doing well despite the Depression; let's call a spade a spade here that is what it is). 

Money was invented as a convenient medium of exchange. It became a measure of value and a store of wealth. That is what is taught about money in the schools. But as we know, price is a poor measure of value and inflation makes money a poor store of wealth.  And what is not taught is money's role a gatekeeper and social control mechanism.

The need for it often forces us to work at unpalatable jobs and is a significant cause of divorce and domestic violence. The need and greed for money is at the root of most criminal behavior. The lack of it often prevents people from doing the work they wish to do because they lack the means of getting costly education/training and "tools of the trade." Lack of money is also an impediment to good nutrition and health care access. When you really think about it, rather than thinking just about how to get more of it, or what you would do with more of it or worrying about how you can make do without it...if you really think about it, money has become more trouble than it is worth and it is high-time we got rid of it. 

Of course, that won't be done overnight. But Sen. Sanders and Reps. Ron Paul and Alan Grayson have shown us the starting point. Get rid of Bernanke.  Audit and then get rid of the Fed. 

Then get rid of interest. Use money as a medium of exchange, like grocery store coupons that have no cash value, while examining ways in which people historically created goods and services for themselves and their communities without creating debt. Examine theories of the gift economy, the open source movement, relocalization and the Do It Yourself movement for contemporary alternatives to the current monetary system that is impoverishing the many to benefit the few worldwide. 

Contact your Senators and tell them to support Sanders.Then ask yourself: Why should we pay to live on the planet we were born on?