you are clever. nice diversions. 1. your statement about the lack of a consensus, if anything proves my point about lack of any Congressional or Presidential control of the private bank. If there is no consensus what stops the New York Fed from doing what it wishes. Nothing. 2. Although the point you argued was irrelevant... I do remember a big deal being made by the the big banks when they paid back their loans. Were the paybacks not part of TARP. In fact if you scroll down on this page you will see... a payback column and a mention of loan paybacks by some entities. https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program 3. Finally on the gravamen of this issue I congratulate on you on your masterful misdirection. Of course your realize... its not whether the creating of GDPS of money was long term or short term good or bad. the question is whether congress had any control over whether the FED created and lent GDPS of our money. The answer is clearly no... the govt had no control.
While I appreciate the compliment, I fail to see diversions. 1. Again, you seem to be very confused. For the New York Fed to act, the FOMC needs to adopt a decision by majority approval by the voting members. The majority of these voting members are government appointees, as I have mentioned many times already. So let me give you a rather trivial example. Suppose there is a private-public conflict on the FOMC regarding a monetary policy decision. Let's suppose that all the members of the FOMC that are nominated by the president and confirmed by congress (public faction) vote against, while all the regional bank presidents (private faction) vote in favor. In a situation such as this the public faction is the majority and will win, which means that the New York Fed will not do what it wishes. Is that a sufficiently clear explanation of how control is implemented? 2. The point I argued is not irrelevant. And, of course, the banks, after the fact, are going to call these TARP injections "loans", as it's in their interest. In reality, like I said, there's a large difference between the Fed programs and TARP. That is a fact. 3. Well, like I said, not everything that is done by the government's various entities is directly controlled and supervised by Congress all of the time. To use an extreme analogy, military commanders during times of conflict make autonomous decisions all the time. It would be incredibly inefficient to do otherwise. Now it's a matter of opinion whether the Fed's decision to lend through its various programs was an operational matter or a larger, more significant one that required Congress approval (like TARP). If your opinion is that the Fed should have asked Congress, like I said, you need to get Congress to change the Federal Reserve Act accordingly.
If you are going to argue the rule .. please cite to it... exactly. note the difference between your unsupported argument and the Fed rules. in your version you see you use the word majority and results which suggest control. However in reality the FED speaks to consensus -- directives and guidance. http://www.federalreserve.gov/pubs/frseries/frseri2.htm Finally, the Committee must reach a consensus regarding the appropriate course for policy, which is incorporated in a directive to the Federal Reserve Bank of New Yorkâthe Bank that executes transactions for the System Open Market Account. The directive is cast in terms designed to provide guidance to the Manager in the conduct of day-to-day open market operations. The directive sets forth the Committee's objectives for long-run growth of certain key monetary and credit aggregates. It also sets forth operating guidelines for the degree of ease or restraint to be sought in reserve conditions and expectations with regard to short-term rates of growth in the monetary aggregates. Policy is implemented with emphasis on supplying reserves in a manner consistent with these objectives and with the nation's broader economic objectives. 2. To me the distinction is a difference which does not matter. So I have no need to debate the nature of TARP. I was not speaking to the loan vs gift of the money I was speaking to the public circus of TARP vs private reality of the FED - creating and lending out trillions... sans input from the govt. 3. Your analogy is poor. The President is still commander in chief. The banker in chiefs are the banks (presumably their shareholders if they aggregate enough shares) which own the regional fed reserve banks. The regional federal reserves create money privately completely outside the control of the govt.
The banks create reserves outside the control of the government. Always. It's a business, banking. No different than any other: they will do what they need to do to maximize profit. In a bank's case, that equates to making as many loans as possible without getting dinged by bad debt. As was pointed out by Minsky (who wasn't Mises, so I'm sure you have no idea who he is) in the credit cycle you go from making well-collateralized loans to making loans on the hope that sheer growth in income or revenue will cover the debt. This happens in large part because of competitive pressure between the banks. The Fed has zip to do with this. Now, the form this took in the late unpleasantness was the banks made the loans, then sold them off via securitization. That was the root of the problem. The Fed's control, to the extent it even exists, of the reserves, would have been and was in fact meaningless in the context of this practice.
your citation to minsky is so impressive. You must be privy to such esoteric information it must surely mean the Federal Reserve is not a private bank. My only course of action now is to cease looking at facts and become become a big govt drone leftist. or not. -- You just made a simplistic argument about Fractional reserve banking and your view that competition caused bad loans. (when in reality most of that crisis was caused by the fact that the Wall street banks went from partnerships to publically traded companies.... therefore the managers became incentivised from long term partnerhship health to short term bonuses... They realized the easiest way to makes lots of money in the short run was to sell premimum... like long term capital and neiderhoofer had done before. Sell shitloads of premium to you blow up... makes short run profits and bonuses. So they sold massive amounts of premium... (tranched out mortgages) and got people to buy them as aaa investments by compromising the rating agencies and attaching fake insurance.) But, all that has nothing with whether the FED is a private bank which is able to create money when it wishes. Step up your game... not that Marty needs the help... he knows far more than I do about this... his problem is the the Fed really is a private bank. So all he can really do is make amorphous arguments about laws and rules which were designed to look like there was control while leaving the real control of making money in the hands of the private bank.
Right, just like I said previously... It's pointless. In spite of everything I have been saying, you just keep saying the same thing. You call my arguments "amorphous", which, frankly, I don't really understand, as I have been very specific. Here's my last attempt, jem, by way of appeal to what you might recognize as some sort of authority. If I understand your general stance correctly, you might be a fan of the Austrians, e.g. Mises, Hayek, et al. Is this correct?