The Fed's $16 Trillion Bailouts Under-reported Tracey Greenstein / Forbs

The Fed's $16 Trillion Bailouts Under-reported

+ Comment now

Image by telmo32 via Flickr

The media’s inscrutable brush-off of the Government Accounting Office’s recently released audit of the Federal Reserve has raised many questions about the Fed’s goings-on since the financial crisis began in 2008.

The audit of the Fed’s emergency lending programs was scarcely reported by mainstream media – albeit the results are undoubtedly newsworthy. It is the first audit of the Fed in United States history since its beginnings in 1913. The findings verify that over $16 trillion was allocated to corporations and banks internationally, purportedly for “financial assistance” during and after the 2008 fiscal crisis.
Sen. Bernie Sanders (I-VT) amended the Wall Street Reform law to audit the Fed, pushing the GAO to step in and take a look around. Upon hearing the announcement that the first-ever audit would take place in July, the media was bowled over and nearly every broadcast network and newspaper covered the story. However, the audit’s findings were almost completely overlooked, even with a number as high as $16 trillion staring all of us in the face.
Sanders press release, dated July 21st, stated:

“No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president.”
The report serves as a clear testimony of the Fed’s emergency action plan to bailout foreign corporations and banks in a time of crisis, but the GAO report does not berate the Fed; rather, it provides a lucid explanation of where the money was allocated and why.

According to The Washington Post, “The GAO report did not condemn the Fed’s actions, it simply illuminated them. The GAO also recommended that the Fed make clearer and more rigorous its policies for hiring independent contractors to manage investment programs.”

A wider investigation of the Fed is due on October 18th, which will provide more thorough details. The GAO report said that the Fed issued “conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.” The audit will inspect the “conflicts of interest” and the inner-workings of the Fed’s emergency-lending programs.

For Sanders, one thing is clear: “The Federal Reserve must be reformed to serve the needs of working families, not just CEOs on Wall Street.”