How to Fix It: Take the Fed Public
While other nations have government-run central banks, the US financial system is managed by a quasi-governmental institution effectively owned and operated by the private banking industry. Often described in oxymorons—as a "public-private" system or a "decentralized central bank"—the Federal Reserve is overseen by a board of governors appointed by the president and confirmed by the Senate. But it's the banks making up its membership that have called the shots, especially under two decades of leadership by the notorious anti-regulator Alan Greenspan.
The Fed's role in the current economic crisis traces back to at least 1999, when the Clinton administration backed legislation—fiercely promoted by Wall Street and sponsored by then-Sen. Phil Gramm—collapsing the long-standing fire wall between traditional commercial banks (which did things like provide checking accounts) and investment banks. The Fed was designated the "umbrella supervisor" of the newly consolidated industry, but with regulatory powers so limited that they were referred to on Wall Street as "Fed lite."
For nearly a decade, Greenspan rebuffed direct warnings about the looming credit crisis. Jane D'Arista, director of programs for the Financial Markets Center, a think tank on monetary policy, says it was the Fed's "ideological commitment to deregulation" that made it fail to impose limits on mortgage lenders until the subprime crisis had exploded—"the proverbial closing of the barn door after the horses were out."
What form could a Fed overhaul take—if Congress and the next president had the guts to do it? One option would be to make the bank part of the Treasury Department, a scheme that has been floated by various economists. Under such a plan, the Fed would be subject to congressional oversight and the heads of the regional Federal Reserve banks—who wield considerable power through the Federal Open Market Committee, which sets key interest rates—would become government appointees as well.
A move to Treasury, points out William Greider, author of Secrets of the Temple: How the Federal Reserve Runs the Country, would place the body that functions as the fulcrum of the national economy firmly within the constitutional system of checks and balances. "The grand bargain that ought to be pursued is more leverage for more accountability," says Financial Markets Center founder Tom Schlesinger.
yeas: House Financial Services Committee Chair Barney Frank, Barack Obama, and Treasury Secretary Henry Paulson have all outlined plans advocating broader Fed powers, including regulation of the Wild West territory of investment banks, hedge funds, and derivatives. But no national leader (with the exception of Ron Paul, who thinks the Fed is unconstitutional) envisions making the Fed itself more accountable.
nays: The finance sector fought off the threat of a publicly controlled central bank back in 1913; today (with lobbying expenditures totaling more than $3 billion over the past decade, more than any other industry), it is an equally formidable opponent.
chances? Sweeping change is unlikely, but lawmakers can demand more transparency by threatening to do the Fed's job for it: Barney Frank, for example, has introduced legislation to make up for the Fed's weakness in controlling predatory lending. Or the new president could form a subpoena-equipped commission (proposed by John Edwards) to regulate consumer loan practices as well as monitor pensions and 401(k)s.
James Ridgeway is the senior correspondent at the Mother Jones Washington, DC, Bureau.
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Foreclosures are bonanzas for PREDATORY LENDERS because, among other things, these kinds of foreclosures enable UNLAWFUL PROPERTY FLIPPING, and enables Investors to be misled concerning housing market profits. FRAUDULENT foreclosures causes scores of people to unlawfully lose ownership of the properties, the IRS to be cheated, and abets Securities fraud. ((Irrefutable proof of two sample lenders / mortgage companies which fits this scenario are Freddie Mac and Wells Fargo.)
In fact, Congress needs to seek the whereabouts of perhaps billions of dollars and massive amounts of real estate that winds up in the collector attorneys' possession -as well as examine the scores of attorney bankruptcy court frauds. Despite many probes into factors of the mortgage crisis, there has been almost no investigation of the most lethal mortgage mess component: foreclosure attorneys debt collection abuses and judicial collusion.
Such attorneys deliberately file foreclosures naming defunct mortgage companies, or companies which no longer hold the notes; or affix collectors' fees exceeding "Acceleration Clauses." If homeowners sue for "Unfair Debt Collection Practices," collectors make more $$ through protracted litigations. Additionally, some collectors file in Bankruptcy Court falsified motions to "Lift Stay" pleadings for purposes of accomplishing SIMULATED AUCTIONS of real estate properties.
A rational look at overall results from use of debt collectors shows that neither agencies which hire them, nor the people from whom debts are collected are better off. Even the IRS's debt collection program wrought only $31 million of its projected $185 million. "IRS Tax Advocate Renews Criticism of Private Collectors"
http://money.cnn.com/news/news feeds/articles/djf500/20080313 1508DOWJONESDJONLINE000968_FORTUNE5.htm
Furthermore, because in States like Louisiana, mortgage companies like Wells Fargo and Freddie Mac greatly benefit from fraudulent foreclosures, ANY representation about $$$ billion dollar losses because of people defaulting on mortgages SHOULD BE WEIGHED against what these mortgage companies pay in legal expenses to law firms which outmaneuver -and even persecute people who file court proceedings in opposition to fraudulent foreclosures and repossessions. Moreover, Freddie Mac's real estate racketeering was not only blatant, several years ago, former legislator, Rep. Richard Baker, R-La., said of Freddie Mac as "entering ENRON territory" for which there was reason to "be gravely concerned." See:
http://www.cbsnews.com/stories/2003 /06/09/national/main557688.shtml
Glaring proof of deliberate foreclosure fraud, and Securities fraud becomes clear when falsified IRS form 1099's become filed by lenders like Wells Fargo Bank, NA. For such reasons, the FEDS and Congress needs to investigate --and property owners need to be WARNED about mortgage lenders' practice of filing falsified IRS tax form 1099-A's or 1099-C's. Following is an excerpt about 1099 fraud, as well as a LINK to my entire actual statement posted at:
http://www.lawgrace.org/2008/0 8/08/my-august-8-2008-statemen t-to-the-louisiana-secretary-of-state-office-of-financial-in stitutions-concerning-wells-fa rgo-irs-and-mortgage-frauds-sham-fo reclosures-and-judicial-collusion-and-national-app/
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. . .As your records show, GE Capital Mortgage Services, Inc., became defunct in year 2002 when it merged into GE Mortgage Services, LLC, its "successor." Therefore, it is impossible for foreclosure auction to have LAWFULLY been carried out in year 2005 on behalf of the
non-existent GE Capital Mortgage Services, Inc. Also, it is NOT POSSIBLE in year 2005 for Wells Fargo to continue being the "mortgage servicer" for non-existent GE Capital Mortgage Services. Furthermore, if my property was (impossibly) ACQUIRED by GE Capital on May 19, 2005, there is NO LAWFUL REASON for the IRS form 1099-A to exhibit Wells Fargo's name.
Overwhelming evidence demonstrates that, using defunct GE Capital's identity, debt collector attorney Herschel A**** fraudulently seized and acquired more than $80,000 when he flipped my property. Also, contrary to the form 1099-A, the Fair Market Value was not $12,000.
A lot of displaced foreclosed former property owners will one day discover a 1099-A or a 1099-C in their names for which the IRS wants answers. If that 1099 is replete with false information, there could be severe tax effects and a lot of needless untangling to be burdened with.
Barbara Ann Jackson
http://www.lawgrace.org
They were also correct years ago when they called the Republicans on their free trade crap by asking what was "free trade" about such things as the Halliburton no bid contracts? They comments were not limited to just defense, but also all the outsourcing to friends of governmental functions by the current Republicans.
Republican economics:
Privatize profits.
Socialize losses.
randyt
Uncontrolled Private Enterprise has got us into this mess so they should be controlled by government regulation..