How the Federal Reserve Is Destroying Your Economic Future

[TexasTowelie]

New research shows exactly how Fed policies exacerbate inequality.
By Lynn Stuart Parramore / AlterNet

When it comes to what goes on in the marble corridors of the Federal Reserve, Americans tend to be suspicious. For different reasons, both the right and the left have challenged Fed policies aimed at bolstering the economy in the wake of the Great Recession. In two papers for the Institute of New Economic Thinking's Working Group on the Political Economy of Distribution, "Have Large Scale Asset Purchases Increased Bank Profits?" and the forthcoming "The Impact of 'Quantitative Easing' on Expected Profits: Explaining the Rise and Fall of the Fed's QE Policy," economist Gerald Epstein and his colleague Juan Antonio Montecino sought to find out who in the economy tends to benefit from the Fed's actions. They conclude that Wall Street and wealthy Americans are the big winners from policies like quantitative easing, while the rest see little improvement in their economic lives. End result? Inequality is getting worse.

Lynn Parramore: Complaining about the Fed is something of a national pastime. What is it about this institution that attracts so much criticism?

Gerald Epstein: People in America get really angry at the Federal Reserve and at the "money system" in general during economic crises. The Fed draws hostility because of its power, its insulation from democratic accountability, its lack of transparency, and because of its historical and structural connections to finance. It has a lot of power in the economy because it has a big impact on the supply and cost of credit, that is, interest rates. It also plays a key role in supervising banks and historically has seemed to take it easy on the banks when it shouldn't have, such as in the lead up to the financial crisis. Bankers themselves govern the Fed to some extent, and then there's the classic revolving door where Fed officials come from and then go back to the financial sector. Fed officials tend to believe that the institution should have a large measure of independence from democratic control, even though in law it is under the ostensible control of Congress.

So critics, often for good reason, are concerned that the Fed is wielding its vast powers in the interests of the banks and not in the interests of the people. After the financial crisis, Americans have perceived that the banks have been bailed out, but a significant proportion of the population is still in serious economic trouble.

LP: Many libertarians want to audit the Fed or just plain end it, while conservatives like Rick Perry label the Fed's actions treasonous. On the other side of the political spectrum, members of the Occupy Movement and progressives like Bernie Sanders and Elizabeth Warren challenge the Fed's ties to Wall Street. How do people with such vastly different ideologies end up distrusting the Fed?

Read more: http://www.alternet.org/economy/how-federal-reserve-destroying-your-economic-future

[Cayenne]

1. Distrust? How did the Fed get our trust from the start?

[sabbat hunter]

2. the fed reserve

played a big role in the past in getting us out of recessions, stabilizing our money, lessening bank panics (especially after the great depression). It serves a key role in our government and economy. If we were to eliminate the federal reserve, we would still need to replace it with a similar organization (like the first and second bank of the US, Bank of England, Scotland, Canada, etc)

[blkmusclmachine]

3. ,

,

[Mr_Jefferson_24]

4. Accountable to no one...

...refusing reasonable requests by Congress to submit to audit, refusing to say specifically where all the money from the 2008 "Bailout" scam went--the privately held bankster owned and operated Fed has ABSOLUTELY NO LEGITIMACY whatsoever.

Listen to this incredibly arrogant response Greenspan gave to Jim Lehrer back in 2007:

The video description:

The deceptively-named "Federal Reserve" is really a private, foreign-owned, profit-making bank which has complete control over our money supply and credit. It is not a government entity nor is it accountable to anyone in government. In this clip, we hear Greenspan confirm that the Federal Reserve is above the law and accountable to nobody in government.