The new One Bank of America Center in Charlotte, N.C., April 11, 2011. (Photo: Chris Keane / The New York Times)
Do you know who Elizabeth Duke is? How about Donald Kohn or Kevin Warsh? No? Well - you should. Because while Congress was debating back in 2008 whether or not to bailout banksters with a $700 billion blank check - these guys and girls were just doing it. They were funneling $7.7 trillion to Wall Street under the table - without one constituent phone call - without worrying about one election - without having to give one explanation.
They were able to do that because they're members of the Federal Reserve Board of Governors - a group of people who are not voted into office, but have the power to completely dictate monetary policy in America. They are not politicians - they're technocrats - they're bankers and financial experts. Technocrats aren't interested in democracy - it takes too long, and often the interests of the majority of voters don't quite line up with the interests of the minority of bankers and foreign investors. Or - to put it in today's terms - the interests of the 99 percent rarely line up with the interests of the 1 percent. That's why - back in 2008 - the technocrats at the Fed weren't interested in waiting for Congress - with all of its open debate and constituent services - to bail out the banks - they just went ahead and did it themselves.
According to documents obtained by Bloomberg News - in 2009 - the Fed dished out $7.7 trillion in no-strings-attached, super-low interest loans to Wall Street's biggest players.That's $7.7 trillion!That's more than half of the total value of EVERYTHING - every single thing produced in America - that same year. $7.7 TRILLION out the door - with no one bothering to inform the electorate about it until now. And since they were super-low interest loans - banks made enormous profits off of them. Six of the nation's biggest banks - like Morgan Stanley and Bank of America - pocketed a not-too-shabby $13 billion in undisclosed profits, thanks to the deal with the technocrats at the Fed. So today - thanks to a decision made by technocrats, and not politicians - the too-big-to-fail banks are even bigger, and Wall Street has raked in more profits in just the last 30 months then they did in the entire eight years leading up to the 2008 financial crisis.
I guess the economic crisis that brought banksters to the ledge ended up being pretty lucrative for them in the long run. But the bigger picture is this: can our democracy survive future financial crises? As the world descends into financial turmoil on fears that the Euro zone may collapse, it's the technocrats who are taking power - replacing elected officials.The clearest example of this is what happened in Greece a few weeks ago. In order to preserve the euro - keep financial markets steady and ensure that foreign investors get what's theirs - the technocrats at the International Monetary Fund and the European Central Bank demanded that Greece take a bailout. Knowing that a bailout would mean more layoffs - higher taxes and less benefits for the Greek people - Greek Prime Minister George Papandreou wanted to hold a national referendum on whether or not to take the bailout, just like Iceland had done a year earlier. He wanted the people - through democracy - to determine their own fate. But that never happened.Just floating the idea cost Papandreou his job - he was forced out of office and replaced by a technocrat, Lucas Papademos, who just so happened to be the former vice president of the European Central Bank.
Probably because when the Icelandic people were asked in a national referendum if they should take austerity cuts to bail out their banksters, they said, overwhelmingly, "No, let the banks fail." But with a technocrat in charge, there will be no vote - a bailout will be shoved down the throat of the Greek people, and so, too, will painful austerity - anything to keep the banksters happy.New York Times op-ed columnist Ross Douthat laid out this new reality of technocrat control in a recent article in which he wrote, "For the inhabitants of Italy and Greece, who have just watched democratically elected governments toppled by pressure from financiers, European Union bureaucrats, and foreign heads of state, it evokes the cold reality of 21st-century politics. Democracy may be nice in theory, but in a time of crisis it's the technocrats who really get to call the shots. National sovereignty is a pretty concept, but the survival of the European common currency comes first."
All signs indicate that we'll be confronted with this problem once again in America - as another financial crisis, be it caused by Europe or some other bubble like student debt or housing, seems like a foregone conclusion at this point. And when it hits the fan - and the American people tell Congress no way in hell will they sign off on another bailout of Wall Street - then the technocrats at the Fed will takeover and our democracy will be irrelevant - just like it was in 2008 and 2009. That's why we, the people, need to take back control of the Fed, and why the people of Europe need to take back control of their central banks and global financial institutions.
Only when the Federal Reserve becomes an instrument of the people to calm the mood swings of the market - and not a piggy bank for transnational banking corporations - can we really protect ourselves from a technocratic takeover in the future. And the way to do it is pretty straightforward - it was Alexander Hamilton's idea back in the George Washington administration. Have the central bank owned by the US government and run by the Treasury Department, so all the profits from banking go directly into the Treasury and you and I pay less in taxes while the banksters on Wall Street can find a job at Wal-Mart.The good people of North Dakota did just this, back in 1919, established something very much like this - the Bank of North Dakota - and it's kept the state in the black, and kept its farmers, manufacturers and students protected from the predations of New York banksters for nearly a century. It's time for every state to charter their own state bank, just like North Dakota did, and for the Treasury Department to either buy the Fed from the for-profit banks that own it, or simply nationalize it.Only when we get control of our money out of the hands of sociopathic banksters will our democracy begin to function for the people instead of just for the banksters.
