[Kosh]

So if not Congress, then who?

Good question. Here's the problem, the fed's stockholders are the private banks, many of these same banks also have hundreds of lobbyists in congress to push their agenda, often successfully. See the folly of having the federal reserve act as a regulator for the banks?

So they're overworked? That's the reason? Somehow I don't think that's it.

Which I'm pretty sure that somehow is not what I said. The problem is when you cut back the number of people and have the remaining ones do more, stuff slips through the cracks easier.

You think these banking institutions should be left on their own?

They practically are.

[Blue Lion]

Good question. Here's the problem, the fed's stockholders are the private banks, many of these same banks also have hundreds of lobbyists in congress to push their agenda, often successfully. See the folly of having the federal reserve act as a regulator for the banks?

The real problem is you didn't actually answer the question. And no, I don't see the folly. Mostly because you could take out "bank" and replace it with any industry and you'll get the same exact thing. Lobbyists.

Secondly, the Fed is a not for profit institution, so it has no desire to earn profits. And quite frankly this independence is one of its greatest assets. It is not held to the administration, only the economy.

Which I'm pretty sure that somehow is not what I said. The problem is when you cut back the number of people and have the remaining ones do more, stuff slips through the cracks easier.

That's overworked. That's exactly what I said. And no, that's not really going to happen.

They practically are.

Yea except for the whole federal oversight thing there is no one watching them

[Blue Lion]

Well it wasn't too long ago that ethics and morals meant something in public life.

I view this as a Consumer Protection issue.  The only dog the Government has in this fight is to ensure that people are not getting taken advantage of in a situation where they aren't knowledgeable, they didn't do that.  What's happening now is nailing the barn door shut after the horses have run off and the equipment stolen.

So...... too late for regulating banks now? Oh no the banks screwed up so lets all go home?

You're still not making yourself clear (on purpose I think) should the federal government be regulating these banking institutions? Do you think the government was unnecessarily meddling in the banks or did the banks have too much of a free hand and screwed us all over?

I get the distinct impression most people here dislike the government interference but they know without the regulation the banks and such would totally screw everyone over to get rich. So everyone complains about government but won't actually say they think the banks should regulate themselves.

[SpardaSon21]

There was something about the Community Reinvestment Act that encouraged banks to make subprime loans, mainly to poor minorities in the name of increasing home ownership among the underprivileged.  Which is something the Democratic members of Congress love because they can say they are helping people.  The CRA was started by the massive failure that was Carter, and expanded by Clinton.  And there were Fannie Mae and Freddie Mac that bought up those subprime loans from the banks, allowing the banks to keep making them.  Fannie Mae and Freddie Mac both received massive government subsidies from the government at the end of the Bush Administration and are now wholly owned by Uncle Sam (at Congress's request, not Bush's), and were big contributors to key members of Congress as well.

[Blue Lion]

There are two problems with that...... post.

1. You said encouraged to make subprime loans as if it's a bad thing. Subprime loans aren't bad. The practice they engaged in to get the loans were bad. You also said encouraged, not forced. So it is said that these companies could have simply not done it. You also talk about Freddie Mac and Fannie Mae buying up mortgages as if it wasn't their job.

2. You called Carter a massive failure

[SpardaSon21]

Subprime loans can be bad, if the people who receive the loans can't pay them back.  In a case like that, not just the lendee loses by having their home foreclosed, the bank loses out as they get a useless home.  Banks hate foreclosed homes, as they have to maintain it in the hopes of selling it at auction (often for less than it is worth, ending up with it being a net loss).  A foreclosed house costs a bank money.  And if the banks didn't make the loans, ACORN would show up and protest them for not giving poor people a chance, which is horrible PR.

And Carter was a failure.  He let the mullahs overthrow the pro-West Shah, giving rise to the fanatical theocracy in place in Iran today, he failed at getting our hostages out of Iran, he handed the Panama Canal over, and he was responsible for the stagflation of the '70's.  Tell me how Carter succeeded.

[Blue Lion]

Subprime loans can be bad, if the people who receive the loans can't pay them back.  In a case like that, not just the lendee loses by having their home foreclosed, the bank loses out as they get a useless home.  Banks hate foreclosed homes, as they have to maintain it in the hopes of selling it at auction (often for less than it is worth, ending up with it being a net loss).  A foreclosed house costs a bank money.  And if the banks didn't make the loans, ACORN would show up and protest them for not giving poor people a chance, which is horrible PR.

I was under the impression that ALL loans worked that way. All loans had to be repaid, not just the subprime ones. But plus points for throwing in ACORN for no real reason.

The lenders disregarded lots of things in giving out loans to people who couldn't pay them back really. This has less to do with the evil Democrats making them and more to do with it meant they could make tons of money off it.

And Carter was a failure.  He let the mullahs overthrow the pro-West Shah, giving rise to the fanatical theocracy in place in Iran today, he failed at getting our hostages out of Iran, he handed the Panama Canal over, and he was responsible for the stagflation of the '70's.  Tell me how Carter succeeded.

He didn't get involved in Iran, he gave the Canal back to Panama and the Camp David Accords. I find it funny two of things you named as downsides I see as pretty good.

Do you think we should be meddling in the current Iranian affair now?

[Kosh]

And no, I don't see the folly.

So an institution with a blatant conflict of interest should regulate itself?

Mostly because you could take out "bank" and replace it with any industry and you'll get the same exact thing. Lobbyists.

Last time I checked no other industry had anything like this situation. Farmers do not have shares in the USDA for example.

Secondly, the Fed is a not for profit institution, so it has no desire to earn profits.

The fed might not be, but its shareholders, the private banks, are. So do you really think it cares about the people's interests?

That's overworked. That's exactly what I said. And no, that's not really going to happen.

What makes you so sure it won't happen?

Yea except for the whole federal oversight thing there is no one watching them

Fat load of good that did until this point.

[Blue Lion]

So an institution with a blatant conflict of interest should regulate itself?

It's a semi public and semi private institution. It has federal oversight AND is mostly independent from the other branches of government. It has been this way for almost 100 years.

You're still tiptoeing past the issue. Federal oversight or private oversight?

Last time I checked no other industry had anything like this situation. Farmers do not have shares in the USDA for example.

You're right. The USDA's job is not to ensure the well being of the agriculture economy. The Federal Reserves primary job is to fend off banking panics..... kinda like the one we had just now.

The fed might not be, but its shareholders, the private banks, are. So do you really think it cares about the people's interests?

The Fed cares about the economy as a whole. Not if one bank makes more money. EVERY bank is part of the Federal Reserve. You're saying the people in the Federal Reserve who make all the decisions (who are nominated by Congress) are making those decisions for the purpose of pleasing the private banks in disregard of the Federal Reserves stated purpose?

What real say do the banks have in the issue?

What makes you so sure it won't happen?

If they were understaffed, they would put in for extra workers and probably get it. Because government loves to have extra staff. Do you think these guys will apply for more people due to overwork and the government will say "nah, we don't want more workers and/or oversight"?

Fat load of good that did until this point.

Because they didn't do it, not because they couldn't do it

[Kosh]

The USDA's job is not to ensure the well being of the agriculture economy.

Actually it does.

The United States Department of Agriculture (informally the Agriculture Department or USDA) is the United States federal executive department responsible for developing and executing U.S. federal government policy on farming, agriculture, and food. It aims to meet the needs of farmers and ranchers, promote agricultural trade and production, work to assure food safety, protect natural resources, foster rural communities and end hunger in the United States and abroad.

The Federal Reserves primary job is to fend off banking panics..... kinda like the one we had just now.

And it failed....AGAIN. Throughout its history it has often failed to stop banking panics. Can anyone say "1929"?

The Fed cares about the economy as a whole.

It cares about its member banks far more than anything else.

EVERY bank is part of the Federal Reserve

Only national banks are, state banks are not.

they would put in for extra workers and probably get it.

Not if their activities are not politically favorable.

Because they didn't do it, not because they couldn't do it

So what you're saying is that they could have stopped the current crisis with their current powers but didn't. That's actually a pretty good case against giving them more powers, they are saying they didn't have powers. Why give them more when they don't use what they have properly?

[General Battuta]

To be fair, the steady decrease in the frequency and severity of economic depression can probably be attributed to good monetary policy by the Fed.

[Blue Lion]

Actually it does.

*Snip*

That's great, right off Wikipedia. That mentions nothing about ensuring the well being of. They can't do the things with farms that the Federal Reserve can do for banks. They regulate the farms and the food but they really can't do anything about the economy as a whole.

And it failed....AGAIN. Throughout its history it has often failed to stop banking panics. Can anyone say "1929"?

And? What's your point? I've been asking you for numerous posts now. Do you want them removed or do you want them given more powers?

It cares about its member banks far more than anything else.

So.... what you called them up and asked them? They don't care about their job, they care about individual (and thousands) of banks that can't reward them?

Only national banks are, state banks are not.

You're right. Every national bank.

Not if their activities are not politically favorable.

Which is why it's an independent organization so they don't have to worry about what is politically favorable.

So what you're saying is that they could have stopped the current crisis with their current powers but didn't. That's actually a pretty good case against giving them more powers, they are saying they didn't have powers. Why give them more when they don't use what they have properly?

I'm pretty sure that's what I said. I never really suggested giving them more powers to avert this crisis. Are there powers they could have to avert other things? Maybe.

[Kosh]

That mentions nothing about ensuring the well being of.

So what do you think those inspections and regulations are for?

Which is why it's an independent organization so they don't have to worry about what is politically favorable.

Whatever you want to believe.

You're right. Every national bank.

Nice to see you only paid attention to half of what I said. Which set of banks do you think they care about?

They don't care about their job, they care about individual (and thousands) of banks that can't reward them?

Their job is to look out for their member banks. Always has been.

I'm pretty sure that's what I said. I never really suggested giving them more powers to avert this crisis. Are there powers they could have to avert other things? Maybe.

I'm pretty sure that is what you said.

From you:

Their part of the mess is not having the power to regulate these institutions correctly.

[Blue Lion]

So what do you think those inspections and regulations are for?

To protect the farmers and the people who eat the food?

Whatever you want to believe.

YAY! Way to sidestep it again! Do you feel banks should be regulated by the Federal Government or no? I'm gonna guess since you haven't answered the question the numerous times I've asked it, you don't know and just feel like arguing!

Nice to see you only paid attention to half of what I said. Which set of banks do you think they care about?

........

All of them. That's their job. If you're implying they're only looking out for member banks, why did all these banks go bad?

Their job is to look out for their member banks. Always has been.

I have never seen anything that mentions them "looking out for" the member banks any more than they would look out for the economy as a whole. Secondly, what does that even mean? You're implying some kind of buddy buddy system they have with only member banks, but I can figure out what that system could be. Perhaps you could enlighten me.

I'm pretty sure that is what you said.

From you:

Their part of the mess is not having the power to regulate these institutions correctly.

We were talking about Ron Paul's proposed audit of the Federal Reserve and the power they held. We didn't start talking about the current economic crisis until pretty recently. I thought it was fairly well know why these banks went tits up and that it was something we (as in the the government) should have been watching. As for the concept of the entire Federal Reserve, which we were talking about earlier, that's a different idea.

That... that was my whole point at the start of this thread. It wasn't about the current crisis, Ron Paul just doesn't like the Federal Reserve.

The reason it's getting confusing is you're jumping all over the place and not answering the question I asked in the 7th post of this thread and continued to ask over and over.

Do you feel the Federal Reserve should have the the power or not? Who should be watching these banks?

[Kosh]

If you're implying they're only looking out for member banks, why did all these banks go bad?

Because they were so blinded by the massive profits they were reaping before the bubble burst?

I have never seen anything that mentions them "looking out for" the member banks any more than they would look out for the economy as a whole. Secondly, what does that even mean? You're implying some kind of buddy buddy system they have with only member banks, but I can figure out what that system could be. Perhaps you could enlighten me.

Every private organization always puts its shareholders first.

Do you feel the Federal Reserve should have the the power or not?

I'm pretty sure I did. No, it shouldn't.

Who should be watching these banks?

An agency that doesn't have ties to them.

EDIT: And now that this has come about, do you really want them to have more power to do more shady stuff?

WASHINGTON, June 24 (Reuters) - The Federal Reserve sought to hide its extensive involvement and concerns about Bank of America Corp's (BAC.N) acquisition of Merrill Lynch amid the latter's worsening financial condition, a top Republican congressman said on Wednesday.

"The committee has already learned that Ben Bernanke and the Federal Reserve made inappropriate threats to fire Bank of America management unless they went ahead with the 'shotgun wedding' that was the Merrill Lynch acquisition," Rep. Darrell Issa of the House Oversight and Government Reform Committee said in a statement released to Reuters.

"The Federal Reserve also engaged in a cover-up and deliberately hid concerns and pertinent details regarding the merger from other federal regulatory agencies," the statement said.

The committee has obtained a number of emails and documents from the U.S. central bank about its behind-the-scenes role in the merger, according to sources familiar with documents. (Reporting by Julie Vorman and Kim Dixon, editing by Leslie Gevirtz)

[Blue Lion]

Because they were so blinded by the massive profits they were reaping before the bubble burst?

Then how is the Fed looking out for these guys?

Every private organization always puts its shareholders first.

Not exactly true, but ok. Good thing the Fed isn't a private organization. Because it is... you know, public AND private. The whole "people run it appointed by Congress" and "answers to Congress" thing kinda shows that.

I'm pretty sure I did. No, it shouldn't.

Not really. The closest you got was when you stated "Real regulators" but you really never stated who those regulators should be.

An agency that doesn't have ties to them.

But any agency WILL have ties to them because they're going to regulate them.

What you're essentially saying is you don't want a national bank?

[Kosh]

But any agency WILL have ties to them because they're going to regulate them.

What I mean is someone who is not owned by them.

Then how is the Fed looking out for these guys?

By helping them get richer then bailing them out when it explodes in their face?

Because it is... you know, public AND private. The whole "people run it appointed by Congress" and "answers to Congress" thing kinda shows that.

And yet they ignored a house panel's request for information about above mentioned deal, leading to a subpeona.

[Blue Lion]

What I mean is someone who is not owned by them.

The banks don't own the Federal Reserve. It's not like a regular company so owning stock doesn't translate to ownership. Those banks don't get to influence the decisions of the Fed. The elect part of a board of directors who answer to the elected officials, who answer to Congress.

By helping them get richer then bailing them out when it explodes in their face?

That's their job? You brought up 1929 for when they failed to do something. Which is it? Are they supposed to help the banks or leave them on their own?

And yet they ignored a house panel's request for information about above mentioned deal, leading to a subpeona.

I'm still failing to see how this changes anything. The fact that they did get a subpoena means they do answer to them.

A subpoena IS answering to Congress.

[Liberator]

Which is why it's an independent organization so they don't have to worry about what is politically favorable.

Which sounds good right up unto the point where the Congress passed a bill instructing the Fed to relax existing restrictions to make it easier for people who have no damn business buying a house in the first place to do so.  Which is how we ended up here in the first place.  You cannot guarantee someone who can't even get a small loan to buy a used car the mortgage they need to buy a house valued at over $100,000.  Yet they did, do you see what I'm getting at?

So yes, the Fed, like every other politically created organization, is lousy with corruption and back-scratching.

[Blue Lion]

Which sounds good right up unto the point where the Congress passed a bill instructing the Fed to relax existing restrictions to make it easier for people who have no damn business buying a house in the first place to do so. Which is how we ended up here in the first place.  You cannot guarantee someone who can't even get a small loan to buy a used car the mortgage they need to buy a house valued at over $100,000.  Yet they did, do you see what I'm getting at?

Wouldn't you blame the banks for actually giving the people the loans without doing proper background checks? None of these banks were forced to give out these crappy loans, it was simply easier to do so. The banks just jumped on it because it could make them a ton of money.

As if we can't possibly blame the banks for actually walking through the door because they're banks and banks are greedy. We're going to blame the Fed for opening the door.

So yes, the Fed, like every other politically created organization, is lousy with corruption and back-scratching.

I still have yet to see real evidence of how these banks somehow pay off the Fed. How are these banks sending stuff to the Board of Governors?