Gretchen Morgenson reports on yet another fly-by-night bailout operation by the New York Fed:
The existence of one such secret deal, struck in July between the Federal Reserve Bank of New York and Bank of America, came to light just last week in court filings.
That the New York Fed would shower favors on a big financial institution may not surprise. It has long shielded large banks from assertive regulation and increased capital requirements.
Still, last week’s details of the undisclosed settlement between the New York Fed and Bank of America are remarkable. Not only do the filings show the New York Fed helping to thwart another institution’s fraud case against the bank, they also reveal that the New York Fed agreed to give away what may be billions of dollars in potential legal claims.
Essentially, Obamaism increasingly serves as a front for the big-money interests who benefit from the Federal Reserve’s largesse and interest rate policies; progressive rhetoric serves as the beard for royalist results.
Overall, the impacts of ultralow interest rate, cash-machine policies of Fed Chairman Ben Bernanke trump everything else. The presidential stimulus was, at best, modestly effectively, and certainly did little to turn around the fortunes of most Americans or spark much economic growth. Unemployment remains stuck at around 8 percent and 8.5 million workers have exited the labor force.
But the Bernanke policies have succeeded in reshaping the economic landscape in ways that, while good for the plutocracy and Wall Street, are not particularly positive for the vast majority of Americans.
“Too big to fail” really means “just right for Washington.”
I’ve long argued in favor of free markets for one simple and practical reason: It’s a bad idea to let the money guys get together with the political power guys. Without a wall of separation, to borrow a phrase, between the two, there’s no air for the rest of us to breathe.
Small business giving up? Your savings stopped generating any interest? Millions, whether rich or poor, permanently dependent on handouts? These are features, not bugs.
The men who own all the apple carts are seldom interested in seeing them tipped over.