Jack Balkin provides the details in an excellent post on the Federal Reserve’s announcement that it will buy $600 billion in Treasury bonds. As Balkin puts it, “Last Tuesday, the people made clear: no more big bailouts to banks, no second stimulus, no runaway federal spending.” Yet the Federal Reserve is doing all three.
Balkin characterizes the Federal Reserve as an example what Sandy Levinson and he “call distributed dictatorship. Bernanke and the Fed do not control every part of American policy. They cannot order troops to go to war, for example. But in their specific area of expertise and authority–the use of the Fed’s resources for economic policy–he and the Fed are effectively accountable to no one. And that is why Bernanke did what Obama and Congress could not do–ordered a second 600 billion dollar stimulus package for banks and other bondholders….”
One more reason why Rep. Ron Paul’s bill to audit the Federal Reserve is a good idea. And a good starting place for progressives, libertarians, and conservatives to work together to start shutting down the bipartisan system of crony capitalism and corporate welfare that helped cause the current economic problems.