FOMC Meetings are tape recorded; full written transcripts existSubmitted by Michael Nystrom on Tue, 10/27/2009 - 10:30
From the book salon at Fire Dog Lake with James Galbraith & Robert D. Auerbach
By James K. Galbraith. Snip:
Bob’s new book, Deception and Abuse at the Fed, chronicles the battles of Henry B [Gonzalez] against the obscurantism, self-dealing and contempt for Congress that have long been hallmarks of our central bank, and that were particularly so during the long tenure of the “Maestro,” Alan Greenspan. These include management failures — a notorious “phantom airplane” in the Fed’s check-clearing fleet — and accounting abuses, civil rights violations of Fed employees, and especially the withholding of information from Congress and the public. Most luminously, Bob gives here the tale of the Fed’s 17-year effort to keep secret the fact that Federal Open Market Committee meetings are tape-recorded, with full written transcripts.
With the Great Crisis, these matters take on a new importance. To this day, Chairman Ben Bernanke has refused to disclose to Congress exactly who has received help under the many crisis measures and under what terms. The legal and constitutional situation is clear: Congress has a right to this information. There are no plausible national security concerns. If a member of Congress abuses access to such information (say for personal profit) it is up to Congress to discipline that member. Reps. Alan Grayson and Ron Paul have asked Senator Dodd, chair of Senate Banking, to withhold approval of Bernanke’s renomination to chair the Board until the Federal Reserve comes clean on this issue.
Similarly, there is a bill before Congress that would subject the entire operations of the Federal Reserve to an independent audit – a project that dates back to the great Texas populist, Wright Patman. No one reading this book will be in doubt about the need for this bill.
Finally, there is the question of financial reform. In the new effort to bring systemically dangerous institutions (now called “Tier One Financial Holding Companies”) under effective supervision, the administration proposes to vest regulation of those entities in the Federal Reserve. The Federal Reserve naturally agrees. But the Federal Reserve has never been an effective regulator for the straightforward reason that it is dominated by economists and bankers and not by dedicated skeptics who make bank regulation a full-time profession.
Anyone who wishes to understand why the Federal Reserve should not be the regulator of choice for the most dangerous financial institutions should begin by picking up a copy of Deception and Abuse at the Fed: Henry B. Gonzalez Battles Alan Greenspan's Bank