I don’t have time for a long post, and I keep delaying some posts that I mean to write so much that they don’t seem relevant by the time I get around to them… but, here’s a quickie.
Talking Points Memo details the sort of mess we can get into (and did) when we rely on an unaccountable agency to rescue the financial sector from itself:
To avoid booking a loss on the Fed’s balance sheet, because the Fed had some legal problems if either of these Maiden Lanes lost money, and because of a reporting requirement that Dodd had put into TARP which actually required the Fed to report to the Congress and the public about the cost to taxpayers from ML I, the Fed did some creative accounting.
As they say, read the whole thing. It’s bad enough when companies go bankrupt after their “creative accounting” comes to light, it seems particularly treacherous if the US Federal Reserve does the same. Which reminds of a point Robert Reich made a while back:
The Fed is not directly accountable to American voters, or even to Congress or the President.