Sanders Defends Amendment To Audit The Fed

Sen. Bernie Sanders (I-Vt.) insisted on Friday that his amendment within a Senate financial regulatory reform bill to audit the Federal Reserve (Fed) would not grant Congress the authority to set monetary policy.

“That was not my intent,” Sanders said to reporters.

Sanders’s effort received a huge boost last night when he was able to strike a deal on the amendment with Senate Banking Committee Chairman Chris Dodd (D-Conn.) Under the agreement, the Government Accountability Office (GAO) would be authorized to perform a full audit of the Fed, going back to December 1, 2007. If the bill is signed into law, the GAO would be required to publish its findings online no later than one year after the law is enacted.

Most analysts say the amendment is not too radical of an idea. Sanders, on Friday, said it’s really just a matter of bringing about common-sense transparency to the financial system.

“The American people have a right to know what [Fed Chairman] Ben Bernanke has refused to allow them to know,” said Sanders, who admitted that the Chairman “is not one of my best friends.”

Indeed, the powerful banking agency along with firms on Wall Street are aggressively pushing back on the provision. Earlier this week, Bernanke wrote a letter to Dodd urging him to strip the amendment from the bill. But with Dodd -- the bill’s author -- as well as conservative South Carolina Republican Jim DeMint both saying they support Sanders, the measure looks like a safe bet to end up in the final Senate bill. Now, the question becomes whether or not it will survive a potential conference committee.

“Some of [the House bill’s] language is stronger that what we have, some of our language is stronger than what they have,” said Sanders, adding that the only thing on his mind right now is getting the 60 votes necessary to move forward on the legislation.

More Regulation Necessary, Says Treasury Duo

By Benny Martinez
University of New Mexico/Talk Radio News Service

Treasury Secretary Timothy Geithner told the Federal Crisis Inquiry Commission Thursday that the financial crisis the United States is currently struggling to resolve was caused by high-risk practices in the finance market and the failure to regulate them.

“A principal cause of the crisis was the failure to provide legal authority to constrain risk in this parallel financial system,” Geithner said.

Contrary to the belief that the financial crisis resulted from a “shadow banking system” that included institutions like Bear Stearns and Lehman Brothers, Geithner said that “it was not hidden, [in fact], it was operating in broad daylight [and] unlike the moral hazard risk in banks, this market grew up without government insurance or any history of governmental support in a crisis.”

Former Treasury Secretary Henry Paulson joined Geithner and said that the current financial crisis cannot be attributed to only one failure in the system.

"Many mistakes were made by all market participants, including financial institutions, investors, regulators, and the rating agencies, as well as by policy makers," said Paulson.

Paulson said that regulators need to implement a stronger arsenal of tools in order to prevent another crisis. The former Treasury Secretary emphasized that lawmakers need to take precautionary measures in tight regulations.

According to Paulson, although regulation of the “shadow banking system” needs to improve, it remains a vital component in reviving America’s struggling economy.

Reid: Republicans Must Stop Making Love To Wall Street

By Antonia Aguilar - University of New Mexico / Talk Radio News Service

“The Republicans are having difficulty determining how they’re going to continue making love to Wall Street,” said Majority Leader Harry Reid (D-NV) at a press briefing Wednesday where he accused Republicans of delaying the progress of financial reform through the Senate.

“The Republicans have stopped us from doing anything on this bill. We are doing absolutely nothing on the floor and it's very, very troubling for all of us,” said Reid after lamenting on other key issues the Senate has yet to address because financial reform hasn’t been passed.

Reid stressed that two weeks after financial reform was proposed to the Senate, Wall Street is still operating under the same programs that they did when they started their “fly-by-night scams” that lead to the financial crisis.

“Programs are still in place,” Reid said. “We don’t have the rules to enforce anything, thats what this legislation is all about and its a shame that we haven't been able to move to it.”

The Majority Leader said he hopes to get enough support to pass legislation through the floor but remains skeptical of a quick turn out in light of recent disagreements with Ranking Member Richard Shelby (R-AL).

“It's obvious that [Republicans] do not want to put any decent restrictions on what Wall Street has done or are doing and that's pretty clear,” said Reid.

New GDP Numbers Show Slowed Rate Of Growth

According to statistics released Friday by the U.S. Department of Commerce, the nation’s Gross Domestic Product (GDP) grew at a rate of 3.2% during the first quarter of this year. Yet while some are celebrating the news, the figure represents a drop-off since the last quarter of 2009, when real GDP increased 5.6%. Still, President Barack Obama struck an upbeat tone when he addressed reporters in the White House Rose Garden this morning.

“What this number means is that our economy, as a whole, is in a much better place than it was one year ago...We’re heading in the right direction, we’re moving forward. Our economy is stronger, that economic heartbeat is stronger,” he said, flanked by a pair of CEO’s of clean energy companies who have been able to increase domestic payroll thanks to Recovery Act awards.

In reality, however, the statistics show the country’s economy remains in less-than great shape. During the early months of 2010 businesses built up inventories at a slower rate than the previous quarter, national exports decelerated and housing sales remained sluggish. In addition, prices of goods increased slightly while personal real income levels flat lined. Although consumer spending increased, some experts attribute this uptick to the fact that many Americans who filed taxes early capitalized on their returns.

Based on today’s numbers, the economic forecast for the future isn’t too bright, said Peter Morici, an economist and professor at the University of Maryland’s Robert Smith School of Business.

“Although the inventory rebuild has begun, the pace is slow reflecting tepid sustainable demand for U.S. goods and services...Looking ahead, data are not encouraging. After such a long and damaging recession, we should expect several quarters of 5 percent growth but poor and mistargeted economic policies will force Americans to settle for less.”

Sen. Sanders: Financial Reform Should Shine Light On The Fed, Financial Institutions

By Chingyu Wang-Talk Radio News Service

Sen. Bernie Sanders (I-Vt.) told reporters Thursday that Wall Street reform legislation should focus on increasing transparency in the Federal Reserve, the U.S.'s central bank.

"During the bailout, the Fed lent zero interest to almost zero interest loans, trillions of dollars, to lodge financial institutions. The American people don't know who received that money," Sanders explained.

This is not the first time Sanders has touched on the need to air out the inner-workings of the Federal Reserve. In 2009, the Vermont congressman introduced the Federal Reserve Transparency Act.

Sanders added that financial institutions should also be required to amp up transparency.

"People are attempting to hide the problems that they have until the last minutes when they announce they are about the collapse," said Sanders.

"It is illegal to hide the debt that you have," Sanders added.