Kucinich Asks 'Is the Fed Paying Banks NOT to Loan Money?' (New Probe of TARP)

[Hissyspit]

Source: Office of Rep. Dennis Kucinich

Kucinich Asks ‘Is the Fed Paying Banks NOT to Loan Money?’

Domestic Policy Subcommittee Chair Announces New Probe of TARP

Congressman Kucinich 111th
Washington, Jul 21 -

WASHINGTON (JULY 21, 2009) - - Representative Dennis Kucinich (D-OH), who has led the effort challenging the use of TARP funds through two administrations, today questioned whether or not “banks are parking a historic amount of taxpayers’ money in the Federal Reserve while the businesses and consumers across America are starved for credit” and whether the Federal Reserve is “paying banks not to make loans.”

Kucinich raised the question in a hearing this morning before the Government and Oversight Committee at which the Special Inspector General for TARP, Neil Barofsky, testified.

Kucinich cited today’s Fed news report on Bloomberg.com:

“Meanwhile, banks’ excess reserves at the Fed rose to a record $877.1 billion daily average in the two weeks ended May 20, from $2 billion a year earlier. Excess reserves -- money available for lending that banks choose to leave with the Fed instead -- averaged $743.9 billion in the first two weeks of this month.” - - Bloomberg.com

“If these reports are true, this raises significant questions about who the Fed is working for. There is record unemployment and businesses and consumers across American are starved for capital, if the Fed is paying higher interest rates on term deposits in order to induce banks to keep money at the Fed rather than lend, it would be an outrage,” Kucinich said.

Read more: http://kucinich.house.gov/News/DocumentSingle.aspx?DocumentID=138412

[Rhiannon12866]

1. K&R. Kudos to Dennis! Thanks for posting this...

DK has the courage to speak out on issues that many others avoid and never gives up... :patriot:

[ProudDad]

2. K&R

[Iowa]

3. We can always count on Dennis - one of the few good people remaining in politics. n/t

[Enthusiast]

4. Almost the last one. nt

[emilyg]

30. +1

[Greyhound]

5. K & R

He keeps asking the hard questions.

Go Dennis!

[awoke_in_2003]

25. yep...

and the speaker and the media keep ignoring him. That is annoying.

[democracy1st]

6. what a mess

[No Elephants]

7. "{T}his raises significant questions about who the Fed is working for."

As if there's any doubt. :rofl:

1/ We were told the bailout was necessary because, in a few days, lending was about to stop dead, killing businesses and therefore the global economy.

2/ Yet, the TARP has no requirement that the bailout money be used for loans. Odd.

3/ Although the money was supposed to enable banks to make loans, the TARP had no requirement that the bailout money be placed in separate "lending money" accounts.

4/ The Banks did not in fact use much of the bailout money for loans.

5/ We were told it was impossible to track what money is used for because the bailout money was co-mingled with the other funds of the banks. (Even without separate accounts, this is not entirely true. You may not be able to track a particular dollar bill, true, but that is not necessary.)

6/ Now we learn that the Fed is paying banks high interest, making it more lucrative for Banks NOT to lend than to lend.

:wtf: What the Fed?

[MGKrebs]

9. Is #6 true? I see that DK asked the question, but I can't find any info to confirm it.

The Fed paying higher interest than what?

The banks still do not seem to be lending money, the question is "why"?

[freebrew]

10. Exactly.

Is the Fed paying interest on the TARP monies promised to them if they aren't using it?
This really sounds like something Bush/Cheney would think up.
And as I seem to recall, it was the * administration that set this up???

If true, another reason for them all to be prosecuted.

[Demeter]

12. It's Higher Than What You Or I Could Get, For sure

[No Elephants]

27. You are correct. My language should have been less sweeping. (But, see Reply 26.)

However, IMO, ## 1 to 5 are bad enough, even if #6 turns out to be DK worrying too much.

Thanks for the refinement. My wording usually is more conservative (linguistically, not politically). If it were not too late to edit my post upthread, I would.

[DeadEyeDyck]

8. Atta-boy, Dennis

Always watching out for us

[Dinger]

11. Yes He Is

He should be in President Obama's cabinet too.

[valerief]

22. No! We need more people in Congress like Kucinich. Who would raise this, if not for him? nt

[suzie]

36. Yeah, we need to have less people who care about legislating

and more whose sole purpose is to talk.

[Kermitt Gribble]

43. Who in congress

cares about legislating - other than to benefit the corporations? A very small minority - which includes DK. You think his sole purpose is to talk? He is constantly shouted down by the money party (the vast majority of our congresspersons) whose agenda is 180 degrees from Dennis's. Unfortunately, you and many others buy in to their propaganda.

[suzie]

51. Kucinich's agenda is to sound good for his adoring group of Kucinichians.

Unfortunately, you and many others buy into that.

[Kermitt Gribble]

52. Sorry you live in bizarro world.

Kucinich is a voice for the people. There are very few in congress who actually speak for us.

[varelse]

13. "this raises significant questions about who the Fed is working for"

This raises significant questions about who our elected "representatives" are working for.

Thanks to Kucinich for being one of the few who still works for the people.

[WinkyDink]

31. Isn't the Federal Reserve private?

[Hippo_Tron]

40. No, the board of governors is appointed by the President and confirmed by the Senate

[No Elephants]

47. "Isn't the Federal Reserve Private?" No, it only acts as though it is.

[raystorm7]

14. Short answer... YES!...

I've recently had direct experience with this situation as I was in the process of closing on a house. Greedy bastards!

[4dsc]

15. Banks are working AGAINST US!!

Looks like the banks are not wanting to help the US during its time of need.

[WinkyDink]

32. It was always thus, no?

[Timefortruth]

16. My FICO is 804,

spouse's is 795. We have steady income, no debt, and money in the bank.

We went to buy a car yesterday, we decided to buy American.

Our down-payment amounted to half the cost of the vehicle, and decided to finance the rest. The best rate offered at 60 months was 5.9% through BOA (don't believe the ads) but we would have been required to sign away our right to sue if we had a dispute with the bank to get that price. Since we plan to pay it off long before the five years is up, we decided to take the rebate and not lower financing.

We went with 6.25% from a local lender whose contract looked honest, but it took half the day. We have a CD with that bank which earns .725%.

[RedCloud]

28. Exactly why I use a credit union. My rate is 4%.

I bought a nearly new car and the credit union came through again not only beating the no hassle dealer's interest rate 5,5 % but also giving an additional $1,200 savings off the dealer's care package for more extended warranty and their best level of protection.

Also the principal goes down faster with the credit union.

[lark]

39. Credit Unions are so much better

I quit using banks 20 years ago and am so much better off because of the change. I have not seen where one credit union took TARP money, they weren't involved in the weird financing, and don't charge the exorbitant fees bank do. I don't know why anyone would ever use a bank these days. Banks are scum.

[Rosa Luxemburg]

17. I'm glad that we have a watch dog (does the rest of Congress know?)

[Speciesamused]

18. Kucinich was my pick for President.

I adore his little self. We need to repeal the FED of 1913.
It's no longer a government of the people, by the people, and for the people, but a government of Wall Street and the FED.
Our laws are the output of a system which clothes rascals in robes and honesty in rags.
The people are at bay, let the bloodhounds of money who have dogged us beware.

[truedelphi]

24. I know. I know. WIthout an honest person occupying that slot, we

Are simply pawns in the game between the campaign donors and the WH occupant. As far as I can tell, Barack Obama apparently cares more about money than the American people. Even when the issues are such substantive things as economic matters and also health.

[suzie]

37. Which is why most of us didn't want Kucinich, who is supremely dishonest.

[truedelphi]

53. Oh, you are a Florida Democrat. And probably to the right of the DLC.

I bet Andy Stephenson met someone like you, back when he was getting the stolen votes out of the garbage cans at the polling places where corrupt Florida Democrats could have prevented such behavior - as it was their turf too!

[earcandle]

19. so now that we know, what is there to do about it?

Nationalize banks, offer 14% interest n savings, 5% interest
on loans.  Generate the capital ourselves, with our tax
dollars,
and abandon these corporate asshats?  No, Americans are into
spectator sports and have no balls. no character and no
energy. 
If I wanted to NOT be an American, what would I want to be? 
French?  Hmm...  they have balls, character, and actually act
on their passions about what they will put up with.  We pat
Dennis on the head.  Don't you all get sick of it ever? 

[Vidar]

20. Bravo Dennis. K&R.

[valerief]

21. Kucinich is one of the handful in Congress who really care about American workers. nt

[pleah]

23. K&R

[Hippo_Tron]

26. This isn't exactly a secret, Bernanke told Congress this was a potential option to prevent inflation

http://www.reuters.com/article/ousiv/idUKTRE56K3OH20090721?pageNumber=1&virtualBrandChannel=11595

[harun]

33. You think they are doing this so they can keep inflation under control

without having to raise interest rates?

[Hippo_Tron]

34. From a monetary standpoint it is logical

We give the federal reserve control over monetary policy because ultimately a stable monetary policy and a stable currency are in our own interests. However, not every policy option that the fed can use to regulate monetary policy is necessarily in the public interest. Perhaps this is a tool that we might want to take away from the fed or at least subject to further regulation.

[MGKrebs]

50. I think Paul Krugman has been saying that.

That inflation is not inevitable because we are not really printing a bunch of new money (as some would have us think), we're just promising to make money available as needed.

Or something like that.

[RufusTFirefly]

29. Sorry, Dennis! Your ideas aren't marketable

Americans don't want actual leaders like you. They want slogan-slinging celebrity figureheads.

[DebbieCDC]

35. Way to go Dennis

:patriot:

[KG]

38. Thank Gawd It Passed!!!

:eyes: :eyes: :eyes: :eyes: :eyes: :eyes: :eyes: :eyes: :eyes: :eyes: :eyes: :eyes: :eyes: :eyes: :eyes: :eyes: :eyes: :eyes: :eyes:
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[Zhade]

45. Ah, you remember that shortsighted glee from one DU's most ignorant posters too?

NT!

[bobalew]

41. Check out this link: It's toted as a Mthod to hedge inflation

It looks like they are doing this already..
http://marketplace.publicradio.org/display/web/2009/07/21/pm_fed/

[bluesmail]

42. I'm late to the party, here's my contribution for what it's worth

The Fed was created in 1913 in secret to protect the interests of banks. Bankers. It was created on Jekyll Island. It is a Bank Cartel. Could care less about taxpayers.

[Grinchie]

44. Dennis is forgetting that most Americans have taken note of the Fraud

Dennis is forgetting that most Americans have taken note of the Fraud, and are not as willing to buy into the Debt Slavery scheme until some sort of regulatory mechanism and accountability is enacted or enforced.

After all, what better way to destroy the Corporation then by starving them of what they need to operate and exist, which is a gullible, cooperative public that is half-asleep, overworked, overmedicated, overwhelmed with debt, and socially repressed?

I don't think that the Government has done much to restore confidence. If fact, it has done much to make me withdraw even more tightly from the fraud economy, and I think others are now learning to do the same via Job Loss, Foreclosure, and insolvency.

The mechanisms in place, such as Credit Reporting Agencies are nothing more than repositories of "Untouchables" that the lenders can use at their discretion to avoid lending. It's a myth that good credit scores yield good credit these days.

[Joszef Pelikan]

46. I heard a story about this on NPR...

But lemme see if I got it right. We are paying the banks so that we can hold the money that we lent to them. Is that about right?

[No Elephants]

48. Do you mean "We are paying the banks so that THEY can hold the money we lent to them?"

[earcandle]

49. now how stupid is that? GET NOODLEBRAINED ASAP or take our money back into national banks where we

can use it for our own purposes, and the rich can play with derivatives, etc...