Here’s Why Hillary Clinton’s Federal Reserve Plan Is A Big Deal

[applegrove]

Here’s Why Hillary Clinton’s Federal Reserve Plan Is A Big Deal

http://www.huffingtonpost.com/entry/hillary-clinton-federal-reserve-plan_us_57363ac4e4b08f96c1833ad3?utm_hp_ref=politics

"SNIP............


On Thursday, Hillary Clinton endorsed a banking reform idea that is more progressive than anything she backed during her long primary battle with Bernie Sanders. Compared to high-profile proposals like breaking up the banks, the plan Clinton backed is a narrow change, but an important one that nerdy liberal activists have been championing for years. Put simply, Clinton wants to shift the balance of power at the Federal Reserve away from private banks in favor of democratic accountability.

The Fed is the most powerful economic institution in the world, and perhaps the strangest. The central bank’s Board of Governors in Washington, D.C., is a government entity run by presidential appointees who must be confirmed by the Senate. But the 12 regional Federal Reserve Banks that perform the bulk of the central bank’s grunt work — handling and processing reserves — are technically owned by banks. This ownership doesn’t mean much in terms of direct earnings; the banks can’t sell their Fed stock, and the regional Fed banks don’t turn a profit.

The trouble is that the regional Fed banks have a lot of power over the Federal Open Market Committee — the key panel that sets interest rates, directing a tremendous amount of U.S. economic activity. Private banks do have a lot of influence over who manages the Fed’s regional outposts through board of director positions. Directors selected by bankers help choose the president of each Fed outpost. These presidents, in turn, serve on the key committee that sets interest rates. On Thursday, Clinton called for getting bankers out of that process.

If it all sounds terribly complicated, it is. But the bottom line is that Clinton called to replace one form of banker influence over public policy with a system of democratic accountability. That would be a concrete, progressive change to the status quo. And despite her rhetoric on the campaign trail, the key element of Clinton’s financial platform has been to implement existing law.



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[w4rma]

1. So, more identity politics that don't do a thing to change corruption. (nt)

[BootinUp]

2. Sounds good! Reducing private bank influence over Fed Policy.

[w4rma]

3. Where did you read that? I only see a proposal to diversify the ethnicities of the board members. nt

[scscholar]

4. What problem are we trying to solve wrt the people that decide interest rates?

They control interest rates. For the average American, our meager savings are getting next to no interest. We're losing money to inflation. If you increase interest rates, it hurts home and car buyers. What is the goal? Higher or lower interest rates?

[applegrove]

5. The US and the world used to slow down economies with higher interest rates. That way the rich and

poor both fought inflation and bubbles, together. Now the poor fight inflation by being unemployed while the stock market keeps rising for the rich.

[beedle]

6. Didn't we already learn from the Daily News Sanders interview

that the Fed have little to nothing to do with regulating the banks in regards to the important issues of 'too big to fail' and 'monopolies'?

Big deal, the people who set interest rates will be (maybe) less connected to the Wall St Banks ... that's almost as meaningless a move as one could possibly make ... the only thing less effective might be to paint the Fed offices a different color, but even that might be more effective.

Jesus, is there anyone in Washington that has a clue? There's nothing in that article that actually explains why this is a 'big deal' .. and that''s probably because it really isn't.

[applegrove]

7. Actually the rich have used workers to fight inflation for the last 15 years. Used to be tight money

policy, high interest rates to slow down an overheated economy, made workers and the rich fight inflation together. I'd rather that than a great recession. Wouldn't you?

[beedle]

8. Of course, but that has nothing to do with regulating banks

and the issues of 'too big to fail' and the influence of money to the political process.

If you don't address the elites buying off the politicians, then this 'band-aid' solution is just a little speed bump ... nothing a little more money/influence can't fix.

"Democratic accountability' is exactly what the banks and the elites have been 'buying off' for decades ... putting another "democratically accountable body' in their way is like trying to stop a lion with a 'meat door' .... this is not really even a 'half measure', it's basically a slight of hand distraction, a pretend plan to make the gullible think she is doing something.

I guess the best thing you can say about it is that it's not directly harmful, as long as it is recognized what this move can really do, and how easily it can be subverted ... maybe she can sell it as a very tiny 'first step', but that's at best all it is.

[applegrove]

9. It has to do with the federal reserve and who decides interest rates and if the rich and poor fight

Last edited Sun May 15, 2016, 01:31 AM - Edit history (1)

inflation rates together, if need be. Like they used to. Before the GOP warped everything and kept the unemployment rate high purposely.