At noon today the New York Federal Reserve Bank will release its bail out data. It is good to know that Fed Watchdog Matt Stoller is on the job. He has this quality piece today on Naked Capitalism and will be examining the report and bringing us analysis. Here is a teaser:
This is a tremendous step forward. Of the many castle walls the Fed used to keep the rabble out, secrecy and complexity were critical. The Fed couldn’t keep its dealings secret, and financial bloggers are constantly explaining, explaining, and explaining. Those walls have fallen. A lack of public debate was another. That too has fallen. A monopoly of public information dissemination, via personal contacts between bankers and outlets like the Washington Post (whose owner in the 1930s was Hoover’s Federal Reserve Chairman), has broken down as well through internet communities.
Gradually, a new generation of politicians is gaining the confidence that the people themselves through their elected representatives should be making critical decisions about economic efficiency and banking. The Fed is adapting to these changes, building up its communication staff and doing town hall style meetings. Bernanke is on TV all the time, a far cry from the days when the Federal Reserve head simply refused to even brief Congress. In some ways, the hardest part of the fight is generating public debate, but that has been accomplished. The structure of our monetary system is now up for grabs.
As we move forward in this debate, it is important to understand that Sarah Palin is coming from a genuinely rooted tradition in American economic debates, from the era of the late 19th century, when Wall Street came together to finance railroad mega-corporations. Her argument is one against the mutability of money; she rejects the idea that money is a political object, because that implies that it is collective decision-making that determines property values and ultimately the social hierarchy. She believes in a natural and fixed social hierarchy, which is a very conservative idea deeply held by the business class.
Palin is using the lack of legitimacy of the modern Fed, the failed technocratic screw-ups and the elitist tendencies, to push for the equivalent of societal debtor’s prison. She is speaking for creditors, and many of the conservative forces within the Federal Reserve agree with her. It is important to understand that reflexively defending the Federal Reserve, which is what the Democratic establishment is doing, is a foolish and anti-populist attempt to pretend that the Fed is a legitimate decision-making body. It isn’t. It is powerful, but not legitimate.
Stoller is on the right track here. The issue is power and its incestuous nature. Perhaps this information will begin to separate the populists from the populists. There is a brand on populism in ascendency that is naive. It believes that the notion of small, efficient, and non-intrusive government is necessarily democratic, and Constitutional. It can be, if it fulfills its functions relating to freedom, equality, and justice. This is where the Sarah Palin Tea Party will be tested. For if it simply suggests that government disengage and allow the economic masters free rein in a rigged marketplace, then it is not really populist at all. It will really stand for economic “exceptionalism” within our population, where some that rise to the top get to stay there by any means including by the use of some exempt and secretive arms of government.
On the other hand, as Stoller points out, there is the Ron Paul wing of the Tea Party, which does stand for equal economic opportunity.
The Fed is actually one point of contention between the right-wing billionaire Koch family and the Ron Paul libertarians; the Koch’s are supportive of Federal Reserve-tied scholars, and Paul’s people are not (the Palin tea party had no involvement in the Audit the Fed fight, the Ron Paul tea party was the driving force on the right for that legislation).
So perhaps between this release on the upcoming Wikileaks release on a major bank, if it happens, more light will be shed on the sharing of power and money by the economic elites, who prefer to bail out the richest 10% at the expense of the other 90%. See Ireland for details.