What is the only thing worse than having monetary policy in America run indirectly mostly by the banksters and large financial institutions? The banksters having total control of monetary policy. Sadly that seems to be the general direction we are heading thanks to the failure to get Peter Diamond confirmed to the Federal Reserve’s board of governors despite being qualified.
Of the 12 voting members of the Federal Open Market Committee sets monetary policy in the United States, seven are the members of the Federal Reserve Board that are are chosen our democratically elected officials, so they are at least nominally accountable to the public. The other five our Federal Reserve Bank presidents chosen by the large banks and financial firms that own the regional Reserve Banks. By failing to get Diamond confirmed, the seat remains empty and control of deciding monetary policy tilts more heavily towards the bank chosen voting members.
This failure to confirm was caused, in part, by the mindless obstruction of the Senate Republican minority. Of course Republicans could never have stop the Senate Democrats from confirming him unless Senate Democrats had actively decided maintaining their idiotic Senate rules and “privileges” was more important than American having effective government. Finally President Obama deserve his share of the blame for delay in nominating some one and lack of strong push for confirmation or Senate rules reform.
No one comes out looking good from this whole affair except for of course the banksters; who’s power over determining monetary policy has increased as a result. Which is depressing given that the banks have been pushing the Fed towards policies that not surprising benefit the creditors.
I don’t know what is sadder. The fact that we allow a handful of large corporations so much direct control over effectively a huge government function or that so few are treating it like a major scandal that as a result monetary policy is so tilted towards the financial benefits of these same corporations.