Should Congress Audit the Federal Reserve?

Wednesday, March 17th, 2010

Alan Greenspan, former chairman of the Federal Reserve, was called before Congress to explain exactly what went wrong.  Greenspan, who had all the right answers during his reign as chairman, told Congress that it had been a mistake to trust banks to operate in the best interests of their shareholders.

When the housing bubble popped and our nation’s financial markets began to freeze and fail, members of Congress and the rest of the country started looking for answers.

The Federal Reserve Transparency Act of 2009 calls for an official audit of the Fed.  Congress wants answers regarding Fed actions taken during the recent recession.  The Federal Reserve opposes an audit, citing the central bank’s need for independence from political influence.  Citizens demand financial institutions that received federal bailout money to be held accountable for the poor decisions that indirectly led to the nation’s current economic struggles.

Citibank is one of the financial institutions that received federal bailout money during our current economic recession.

Last February Representative Ron Paul (R-TX) introduced his Audit the Fed legislation.  Congressman Paul, author of End the Fed, has been a long time opponent of the Federal Reserve.  In 2007, He also introduced legislation with aims to abolish the Fed.  In the past the Congressman hadn’t received much support for his Federal Reserve policies, but economic trouble has boosted this particular bill’s popularity

The bill has received bipartisan support from several House members, including co-sponsor Congressman Peter DeFazio (D-OR).  Karmen Fore, district director for Congressman DeFazio, says that Congressman DeFazio absolutely believes in a need for greater transparency on Fed actions.  She says that entities like the Fed that benefit from public resources should be subject to public scrutiny.

Fore notes that the Federal Reserve wields enormous power by ultimately setting interest rates. The Fed makes decisions that impact every American. Fore says that Congressman DeFazio believes the power of secrecy the Fed wields is unnecessary and unacceptable.

Fed Chairman Ben Bernanke opposes Congressional audits of the Federal Reserve.    Bernanke believes the current information released is adequate. The chairman also wants to get in front of any potential government audit by making information about the AIG bailouts available. He feels an audit could give the impression that Congress is trying to influence monetary policy.

When asked about the importance of central banking independence from political influence, Judith Johansen, member of the Portland Branch of the Federal Reserve, says, ““I think if you interject politics into that, it creates this external perturbation into the equation that would just be very unpredictable and just create a lot of uncertainty into the markets.”

She believes a central banking system must make decisions that affect the backbone of a national economy.  Johansen believes that central banking decisions should be made in “an atmosphere of integrity.”  She cites the importance of checks and balances within our own political system, noting that no one would want a Senator to call in a favor from a Supreme Court Justice because of previous support on an issue.

One of the significant driving forces behind Audit the Fed legislation is public displeasure in regards to federal money loaned to financial institutions during the economic recession.  A survey conducted by CBS News in March of 2009 showed 53% of Americans disapprove of the government giving federal bailout money to banks as a means to fix the economy.

Duane Taylor, who politically considers himself a Ron Paul Republican, believes it was wrong for the government to bail out companies and private businesses that had poor business plans.

Duane says that the Fed has taken our wealth and spread it to corporations that cannot manage their businesses.” When asked about the businesses being deemed ‘too big to fail’, Duane believes that the phrase is just a sound bite made up by Congress to justify what they’ve been doing.

When asked whether or not the Fed should be subject to a Congressional audit, Dr. Tim Duy, an economics professor at the University of Oregon who follows Fed activity on his blog FedWatch, concedes that it depends on how the word ‘audit’ is defined.

Duy says, “I think that auditing in the sense that interfering with monetary policy would be a poor decision because it would likely lead to disruptive policy.  I’m less concerned with auditing, especially with lag, the emergency lending facilities.”

The bill made it through review by the House Financial Services Committee and had adequate support to pass in the House of Representatives.  Now the bill is headed to the Senate for a vote.  If the legislation manages to become law, the nation should be extremely interested in how Congress will define its auditing power.

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Profile of Judith Johansen

Tuesday, March 9th, 2010

Judith Johansen has worked in many varied fields.  She was the CEO of Pacific Power Corporation and is currently the President of Marylhurst University, just outside of Portland Oregon.

She also has experience in central banking.  Johansen is a member of the Portland Branch of the Federal Reserve District 12.  She believes independence can be crucial in relation to central banking.

The Federal Reserve covets independence.  The Fed has used its independence in times of crisis, like the market crisis after 9/11.  The Fed also wants independence from political influence to ensure a stable economy.  Fed chairman, Ben Bernanke, opposes the Federal Reserve Transparency Act of 2009 because he believes it will lead to political influence in monetary policy.

When asked about the importance of independence in a central banking system, Judith Johansen cites the events that took place after the attacks on September 11th.

Johansen tells of the Fed taking swift action by pumping money into the financial system to assure banks could stay open and cash would flow in the financial markets.  If the Fed had been subject to normal political bureaucracy and held a broader charge other than the stability of the economy, they would not have been able to act so quickly.  The results would have been disastrous.

When asked about the importance of separating politics and central banking, Johansen says, “I think if you interject politics into that, it creates this external perturbation into the equation that would just be very unpredictable and just create a lot of uncertainty into the markets.”

She also talks about the need for a central bank to make decisions that affect the backbone of our national economy, which means that decisions must also be made in “an atmosphere of integrity.”

Checks and balances exist within our own government in order to maintain a balance of power and responsibility.  President Johansen mentions that you wouldn’t want a Senator to call on a Supreme Court Justice for a favor because the Senator showed support on an old issue.

Johansen works for the Fed in an advisory role.  Each board member reports on a specific area of expertise. Johansen reports on education because she is the president of Marylhurst University, and on transportation because she is President of the Port of Portland.

As Johansen continues to advise the Fed, the Federal Reserve Transparency act of 2009 heads to the Senate for a vote.  Congress and the public want answers to Fed actions and financial bailouts, but an audit could compromise financial policy.  The issue of independence and how the bill will affect the Federal Reserve’s desire to be separate from other national institutions will be decided long after the bill passes or fails.

Profile of Dr. Tim Duy

Tuesday, March 9th, 2010

The Federal Reserve has made damaging economic mistakes in the past.  The Fed’s important role in our economy magnifies these mistakes and impacts our nation’s social welfare.

The Fed took unprecedented actions during the country’s latest severe economic downturn by bailing out large financial companies like AIG and infusing large sums of capital into the struggling economy. Now some members of Congress want to look deeper into these actions and see how they have, and will, affect our economy.  Some members of Congress want to monitor the Fed with more scrutiny.  Congress is calling for an audit.

The bursting of the housing bubble is viewed as an important driving force that lead to our nation’s current economic condition.  Dr. Duy, an Economics professor at the University of Oregon, feels that the Fed failed to take seriously their regulatory responsibility in the realm of consumer mortgages.

To aid in the recovery process, the Federal Reserve purchased toxic mortgage-backed securities from struggling financial institutions. Buying these toxic mortgage-backed assets bailed out troubled financial institutions, eased the banking industry’s lending problem, and ensured that additional negative spillovers wouldn’t drastically impact the economy.

Dr. Tim Duy monitors the Fed and regularly comments on Fed activities on Tim Duy’s Fed Watch blog.  When asked about whether or not Congress should initiate an audit, Dr. Duy points to the two different aspects of a Congressional audit.  If a Congressional audit leads to questioning the rationale and direction of monetary policy, he believes it would likely lead to greater political pressure on the Fed.

“I think that auditing in the sense that interfering with monetary policy would be a poor decision because it would likely lead to disruptive policy.  I’m less concerned with auditing, especially with lag, the emergency lending facilities.”

Political influence directed at the Fed can lead to higher inflation rates.  Higher inflation rates negatively impact economic activity by inflating prices of consumer goods ranging from low priced products like food and clothing to high priced products like cars and houses.

If audit information is dispersed in a timely non-detrimental manner, Dr. Duy feels the Fed should be open about what actions took place and why those actions were deemed necessary.

“I think that trying to hide behind the veil of secrecy only leads to suspicion upon suspicion, that the cozy relationship between Wall Street and Washington is a detriment to the U.S. public as a whole.”

Dr. Duy believes the Fed should have gotten in front of this type of criticism a long time ago.

Fed to Scale Back….but When?

Monday, February 15th, 2010

Inflation is coming but everyone is anxious to know when.

The Federal Reserve pumped a lot of capital into the economy during the recent economic downturn in hopes of aiding bank lending and preventing bank failures.

The Fed increased its balance sheet from $850 billion to over $2 trillion. The financial world now is bracing for the backlash.

Saturating our financial market with such a large amount of extra capital has many dreading a dramatic period of inflation. The Fed now has to take actions that will curb these side effects while still maintaining the  stabilization and recovery that our economy has achieved so far.

Sources:
Puzzanghera, Jim “Bernanke says Federal Reserve will scale back stimulus policies….eventually” LA Times

http://articles.latimes.com/2010/feb/10/business/la-fi-fed-bernanke11-2010feb11

Chan, Sewell “Bernanke’s How-to on Rate Increase Lacks a When” New York Times

http://www.nytimes.com/2010/02/11/business/economy/11fed.html

Annotations project

Friday, February 12th, 2010

Topic: Federal Reserve Transparency Act of 2009

1.

Title: Bernanke Wants an Audit of Fed’s A.I.G. Bailout.

New York Times, Jan. 19 2010

Chan, Sewell

http://www.nytimes.com/2010/01/20/business/economy/20fed.html

Accessed: Jan. 25 2010

Category: Mainstream Journalistic; news report from the web version of http://www.nytimes.com

Summary: Federal Reserve chairman Ben Bernanke takes a proactive step by requesting an audit of the Federal Reserve’s handling of the AIG bailout and providing information on Fed actions.

Summary of sources

Edolphus Towns, chairman of the House oversight committee

Ben Bernanke, current chairman of the Federal Reserve

Chairman Bernanke is sourced through a request he sent to Acting Comptroller General regarding the AIG audit. Representative Towns is quoted in order to comment on the additional information chairman Bernanke is sharing with Congress.

Source Analysis:

The New York Times began as a daily newspaper that started in 1851 that aimed to avoid sensationalism in news writing.  Adolph Ochs purchased the newspaper in 1896, turning it into an internationally respected source for news.  The newspaper

and online content are owned by the New York Times Company, which also owns the Boston Globe and About.com. Approximately 14 million users per day access nytimes.com for their news needs. The New York Times writes content for an educated reading audience.

Usefulness: This source shows the Federal Reserve taking proactive steps by requesting an audit from Congress and the Government Accountability Office for their actions in the recent AIG bailout.  It lists the financial figures of the Federal Reserve loans made to the company and details what those loans were used for. It also discloses that chairman Bernanke has already released several documents on the subject. It also mentions the upcoming Congressional conformation hearings for chairman Bernanke as a possible political reason behind requesting the audit. This national economic story is similar to several released by other sites like BusinessWeek and Reuters.

Works cited:

New York Times media kit; Britannica.com;

The New York Times Company home page

2.

Title: Tim Duy’s FedWatch

Econimist’s View blog @typepad.com last updated Feb. 4 2010

Duy, Tim

http://economistsview.typepad.com/timduy/

Accessed: Jan. 29 2010

Category: Academic, a blog presented on the social blogging site http://www.typepad.com

Summary: This blog is an analysis of Federal Reserve behavior, policy, and actions and also comments on trends of inflation, unemployment and other economic indicators that help develop an overall picture of our current and future national economic status.

Summary of sources:

Dr. Tim Duy

This source shows the analysis and the opinion on actions taken by the Fed in an open blog format created by Dr. Tim Duy.

Source Analysis:

Dr. Tim Duy received his Ph.D. from the University of Oregon in 1988 and worked for the U.S. Treasury department as an economist. He also worked for the G7

Group, where his responsibilities included monitoring the Federal Reserve and currency markets. He returned to the University of Oregon as a professor of economics. His blog is located on typepad.com, a social blogging site that is intended to simplify blogging and make it accessible through multiple platforms, including via emails or Internet phone services.

Usefulness: This is the economic blog of Dr. Tim Duy, a University of Oregon professor I hope to interview for my final paper. His blog covers trends he observes in Federal Reserve policy and how that policy will affect the economic climate.  Some focus is dedicated analyzing Fed attempts to normalize the unemployment rate while battling inflation that is expected to occur as a result of the government bailouts. It links to other economic blogs and charts categorized under the Econmist’s View portion of the social blogging site typepad.

Work cited:

Dr. Tim Duy’s page at the University of Oregon; typepad.com’s information page

Tim Duy’s FedWatch

3.

Title: Ron Paul Introduces Bill to Audit the Fed

Ronpaul.com, Feb. 26 2009

Administration

http://www.ronpaul.com/2009-02-28/ron-paul-introduces-bill-to-audit-the-fed/

Accessed: Jan. 11 2010

Category: Institutional

Summary:  The introduction of Audit the Fed legislation into Congress that states the reasons the Federal Reserve should be audited.

Summary of sources:

Representative Ron Paul (R-TX)

This source is a transcript of Representative Ron Paul’s legislation of the Federal Reserve Transparency Act of 2009 found on Representative Paul’s official website.

Source Analysis:

Ronpaul.com is the official website for veteran House of Representatives member Ron Paul (R-TX). Representative Paul unsuccessfully campaigned for the Republican presidential nomination in 2008. He also unsuccessfully ran for President of the United States as a member of the Libertarian Party in 1988. Representative Paul has also frequently criticized the Federal Reserve and wrote a book entitled End the Fed, calling for the end of the central banking system and for the United States to return to the Gold Standard.

Usefulness: This contains House Representative Ron Paul’s (R-TX) introduction to Congress of the Federal Reserve Transparency Act. It covers his logic behind the proposal and states historical evidence that this is not a new issue. Representative Paul talks about the Fed’s indirect influence of foreign policy, attempting to show a need for greater transparency. He gives hypothetical examples of other government agencies or private individuals behaving in secrecy and goes on to guess the severity of consequences of their actions. It also lists the technical aspects of introducing the bill to Congress. This source is important because it is a starting point for the bill that is currently being considered.

Works cited: Washington Post’s Ron Paul biopage; Amazon.com’s End the Fed information page

4.

Title: Money, Gold, and the Great Depression

www.federalreserve.gov, Speech

Ben Bernanke

http://www.federalreserve.gov/boarddocs/speeches/2004/200403022/default.htm

Accessed: Jan. 12 2010

Category: Institutional

Summary: A speech by Ben Bernanke made before he was elected chairman that discusses Federal Reserve actions and consequences during the Great Depression.

Summary of sources: primary speaker, Ben Bernanke

References listed at site that were used during the speech:

Bernanke, Ben (1983). “Nonmonetary Effects of the Financial Crisis in the Propagation of the Great Depression,” American Economic Review, 73, (June) pp. 257-76.

Bernanke, Ben (2000). Essays on the Great Depression. Princeton, N. J.: Princeton University Press.

Bernanke, Ben (2002a). “Asset-Price ‘Bubbles’ and Monetary Policy,” before the New York chapter of the National Association for Business Economics, New York, New York, October 15. Available at http://www.federalreserve.gov.

Bernanke, Ben (2002b). “On Milton Friedman’s Ninetieth Birthday,” at the Conference to Honor Milton Friedman, University of Chicago, Chicago, Illinois, November 8. Available at http://www.federalreserve.gov.

Choudhri, Ehsan, and Levis Kochin (1980). “The Exchange Rate and the International Transmission of Business Cycle Disturbances: Some Evidence from the Great Depression,” Journal of Money, Credit, and Banking, 12, pp. 565-74.

Eichengreen, Barry (1992). Golden Fetters: The Gold Standard and the Great Depression, 1919-1939. Oxford: Oxford University Press.

Eichengreen, Barry (2002). “Still Fettered after All These Years,” National Bureau of Economic Research working paper no. 9276 (October).

Eichengreen, Barry, and Jeffrey Sachs (1985). “Exchange Rates and Economic Recovery in the 1930s,” Journal of Economic History, 45, pp. 925-46.

Friedman, Milton, and Anna J. Schwartz (1963). A Monetary History of the United States, 1867-1960. Princeton, N.J.: Princeton University Press for NBER.

Hamilton, James (1987). “Monetary Factors in the Great Depression,” Journal of Monetary Economics, 34, pp. 145-69.

Meltzer, Allan (2003). A History of the Federal Reserve, Volume I: 1913-1951. Chicago: The University of Chicago Press.

Romer, Christina (1993). “The Nation in Depression,” Journal of Economic Perspectives, 7 (Spring), pp. 19-40.

Temin, Peter (1989). Lessons from the Great Depression. Cambridge, Mass.: MIT Press.

This source is a transcript of a speech given by current chairman of the Fed Ben Bernanke at Lee University in Lexington Virginia; accessed through the official site of the Federal Reserve.

Source Analysis:

Ben Bernanke is currently serving as Chairman of the Board of Governors of the Federal Reserve System. During the time this speech, Bernanke was a Professor of Economics and Public Relations at Princeton University. He has served as chairman since Feb. 1 2006, when he took the job over from Alan Greenspan.  Bernanke has received both criticism and praise for his handling of the current financial crisis.

Works cited:

Ben Bernanke’s bio page, http://www.federalreserve.gov/aboutthefed/bios/board/bernanke.htm

Gavin Robert. “Banking on Bernanke” The Boston Globe

Usefulness: This is a speech by current Fed chairman Ben Bernanke regarding the Federal Reserve’s role in the Great Depression.  The speech is useful because it was given in 2004, before Bernanke was elected chairman.  The speech covers actions taken by the Fed in order to reduce the practice of speculation during the late 1920’s and the high cost of those actions.  This speech makes to interesting points. The first and most obvious is that the Federal Reserve’s inflexible stance on monetary policy increased the severity of our nation’s worst economic depression. The more subtle second point observed is how big the influence of Fed policy and actions is on our nation’s economic system.

5.

Title: Oregon’s economy in slow recovery, state economist Tom Potiowsky tells lawmakers.

The Oregonian, Feb. 8 2010

Esteve, Harry

http://www.oregonlive.com/politics/index.ssf/2010/02/slow_recovery_on_its_way_orego.html

Accessed: Feb. 8 2010

Category: Local Journalistic, news report from the website OregonLive.com, the Internet version of the Oregonian.

Summary: An economic status update and outlook presented to state House and Senate revenue committees by state economist Tom Potiowsky.

Summary of sources:

Tom Potiowsky, economist employed by the state of Oregon

Frank Morse, Oregon state Senator (R-Albany)

Ted Kulongoski, Governor of Oregon (D)

The primary source discusses current employment conditions in Oregon and predicts on trends from economic information gathered. The state political figures comment on the need for greater state reserve funds.

Source Analysis:

Oregonlive.com is the Internet version of the Oregonian newspaper.  Advanced Publications owns the Oregonian and many other newspapers across the United States. The site claims 2.4 million unique users per month on average.

Usefulness: This source shows the economic status and tentative forecast regarding Oregon’s current unemployment rate.  The article discusses slow economic growth and covers how business are still functioning in a weakened employment state not hiring and forcing unpaid leave.  It covers future state budgetary shortfalls that may contribute to another economic downturn that would affect Oregonians.  It also discusses the continued struggles of the logging industry. A key sub issue of unemployment is directly linked to Oregon, which is one of the states hardest hit by the recession.  This source connects the national economic recession to the local economy and the continued struggle of slow recovery and normalization.

Works cited: Oregonlive.com Media Kit, http://www.oregonlive.com/mediakit/home.ssf

Advance Publications information page, http://www.advance.net/index.ssf?/advance_internet/about.html

6.

Title: A lonely voice against the Fed now leads a chorus

Washington Post, Dec. 8 2009

Tse, Murakami Tomoeh

http://www.washingtonpost.com/wp-dyn/content/article/2009/12/07/AR2009120703908.html

Accessed: Jan 12 2010

Category: Mainstream Journalistic, a news profile accessed at http://www.washingtonpost.com

Summary: A profile and history of Representative Ron Paul that shows the history of Paul’s attempts to regulate the Fed and Paul’s ideological stance.

Summary of sources:

Representative Ron Paul (R-TX)

Steve Hanke, Economics professor at Johns Hopkins University

Senator Judd Gregg (R-N.H.)

Representative. Barney Frank, chairman of the House Financial Services Committee (D-MA)

These sources are used to build a complete picture of Rep. Paul, including his strong beliefs and opinions, and provide an oral historical background on how Paul became the man he is today.

Source Analysis: The Washington Post is a prestigious newspaper based out of Washington D.C.  It claims a readership of 10.9 million that spans outside the D.C. area and across the United States.  The Post is famous for breaking the Watergate scandal that force former President Richard Nixon to resign. One of the original reporters, Bob Woodward, still works for the Post and is considered by many to be the greatest reporter of the Modern era.

Usefulness: This article chronicles Congressman Ron Paul’s crusade against the Federal Reserve.  It shows how Representative Paul, who is usually viewed as an ideological loner in the political world, has gained traction with this bill due to the recent economic depression. It also shows Paul being a man stubborn enough to not vote for the bill he introduced because of changes he doesn’t agree with. The Washington Post article is an interesting character analysis of one of the main characters in the “Audit the Fed” movement.

Works cited:

Washington Post media kit

Woodward Bob; Carl Bernstein. The Watergate Story Washington Post

Bob Woodward biography page

7.

Title: Buffet: ‘Too Big to Fail’ Not Going Away

News Corp., Jan. 21 2010

Prial, Dunstan

http://www.foxbusiness.com/story/markets/industries/finance/buffett-big-fail-going-away/

Accessed: Jan. 25 2010

Category: Mainstream Journalistic, a summary of a Warren Buffett interview accessed under Fox Business section on the http://www.foxnews.com website.

Summary: Warren Buffett discusses the ‘too big to fail’ phenomenon that led to government bailouts of large companies and ways to prevent bailouts in the future. Buffett also states his support of the Obama Administration and chairman Bernanke

Summary of sources:

Warren Buffett, CEO of Berkshire Hathaway

This source is famed businessman, Warren Buffett, giving his opinion on the issue of ‘too big to fail’ and the current economic climate.

Source Analysis:

Foxbusiness.com is the business page for foxnews.com.  News Corporation owns Fox News. Controversial figure Rupert Murdoch is the CEO and major shareholder of the company.  Fox News has often been criticized for having conservative bias by media sources like the documentary “Outfoxed: Rupert Murdoch’s War on Journalism.” Fox News claims over 7.8 million unique viewers.

Usefulness: This article discusses the opinions of Warren Buffet, chairman of Berkshire Hathaway, on the idea of companies being too big to fail. Buffet discusses a lack of political power to police risk and suggests that stiffer financial penalties be installed for companies who take on too much risk.  The article also shows that the housing bubble negatively affected Buffet and everyone in the financial sector.  Buffet also restates his support for the current economic policy of the Obama administration, including Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke.  Too big to fail is the main reason given by the Fed for the government bailouts of large U.S. banks and companies. The bailouts are key to driving the driving populist force behind the Federal Reserve Transparency Act.

Works cited:

Fox News.com information page

Rupert Murdoch biography page on woopido.com

The documentary “Outfoxed” main information page

8.

Title: Federal Reserve Seeks to Protect U.S. Bailout Secrets

Bloomberg, Jan. 11 2010

Glovin, David; Weidlich, Thom

http://www.bloomberg.com/apps/news?pid=20601110&sid=aEfuO342uoj8

Accessed: Feb 7 2010

Category: Mainstream Journalistic, a news story accessed through the http://www.bloomberg.com website

Summary: This story is an account of a lawsuit by Bloomberg attempting to force the Federal Reserve to turn over documents regarding financial firms that received funds from the Fed during the economic bailout of 2009.

Summary of sources:

Matthew Collette, lawyer for the government

Charles Davis, executive director of the National Freedom of Information Coalition at the University of Missouri in Columbia

Ann Weisman, chief lawyer for Citizens for Responsibility and Ethics

Thomas Golden, Bloomberg attorney who works for Willkie Far & Gallagher LLP.

Loretta Preska, U.S. District Court judge

Tony West, Assistant Attorney General

Richard Ashton, Federal Reserve Lawyer

These sources are used to comment on the ongoing legal action against the Federal Reserve taken by Bloomberg L.P.

Source Analysis:

Bloomberg L.P owns Bloomberg.com. Bloomberg News has been reporting on world events with a focus on the financial district since 1990. The media conglomerate claims a combined circulation of 73 million people. Michael Bloomberg, the current mayor of New York City, has a majority-controlling stake in the company.

Usefulness:  This article discusses legal action between Bloomberg LP and the New York branch of the Federal Reserve over the Fed refusing to list the names of firms that received money during the recession in 2008-2009.  It shows Bloomberg LP’s legal success at the U.S. Court of Appeals level. It discusses possible future legal recourse that can and probably will be taken by Fed lawyers opposing the outcome.  The article provides a contrast with an early source the Fed resisting transparency to a news organization, citing confidentiality is necessary to maintain financial confidence in Fed policy.

Works cited: About Bloomberg information site

Michael Bloomberg New York Mayor biography page

9.

Title: Dodd Bill Would Cut Federal Reserve Powers

CBS news, Nov. 10 2009

Associated Press

http://www.cbsnews.com/stories/2009/11/10/politics/main5602929.shtml

Accessed: Jan. 29 2010

Category: Mainstream Journalistic, a news story accessed through the http://www.cbsnews.com website

Summary: This story covers the legislation proposed by Senator Chris Dodd, who is attempting shift power and change the structure of the Federal Reserve in the wake of the recent economic meltdown.

Summary of sources:

Senator Chris Dodd (D-CT)

Senator Mark Warner (D-VA)

Edward Yingling, president of the American Bankers Association

Representative. Barney Frank, chairman of the House Financial Services Committee (D-MA)

These sources are used to refer to Senator Dodd’s plan to introduce Federal Reserve Legislation with the intent to cut down on current controversial Fed activities.

Source Analysis:

CBS News is a part of the CBS Corporation. CBS News also produces highly respected news shows like 60 Minutes and Face the Nation.  CBS began as a radio broadcasting company in 1927 before merging with Columbia Phonograph Company. CBS News has been a powerful and respected mainstream news source since the days of Edward Murrow reporting on both the radio and television medium, covering news ranging from World War 2 to the McCarthy Senate hearings.  CBS was widely criticized in 2004 when CBS News anchor Dan Rather lost his job after reporting on then President Bush’s National Guard documents that turned out to be false.

Usefulness: This source shows Senator Chris Dodd’s attempt to regulate the Federal Reserve. It talks about the failures of the Fed during the latest financial crisis. Dodd’s bill would also strip the Fed of consumer protection responsibilities and create a new government agency in charge of consumer protection. The article demonstrates additional Congressional attempts to curb the Fed’s economic power and economic effect. It also shows Congress wanting to take more decisive action in dealing with predatory lending to consumers who are considered high risk. The article also states a need for bipartisan support for the reform-minded legislation.

Works cited:

CBS Corporation information page

The Museum of Broadcast Communications Columbia Broadcasting System page

“This Reporter” PBS.org

Kurtz, Howard. “Rather Concedes Papers Are Suspect” Washington Post

10.

Title: Greenspan admits ‘mistake’ that helped crisis

NBC, Oct. 23, 2008

Associated Press

http://www.msnbc.msn.com/id/27335454/

Accessed: Jan. 25 2010

Category: Mainstream Journalistic, a news story accessed through the http://www.msnbc.com website

Summary: This is a news story that shows Alan Greenspan testifying before a Congressional hearing and admitting mistakes made during his time as chairman of the Federal Reserve.

Summary of sources:

Alan Greenspan, former chairman of the Federal Reserve

Sheila Bair, chairman of the Federal Deposits Insurance Corporation (FDIC)

Representative Henry Waxman (D-CA)

Neel Kashkari, Assistant Treasury Secretary

Christopher Cox, chairman of the U.S. Security and Exchanges Commission

The sources cover the testimony for former Fed chairman Alan Greenspan at a Congressional hearing on the subject of the current economic recession and Greenspan’s role in the recession.

Source Analysis:

MSNBC is owned and distributed by NBC Universal. Microsoft had owned half of MSNBC televised programming, but gave up majority control to NBC. The two companies still maintain a 50-50 ownership over the MSNBC website. MSNBC claims an average of 36.5 million unique visitors a month.  Conservatives view MSNBC as a liberal news media outlet.  Host Chris Matthews was criticized for commentating on the ‘criminality’ of the Bush Administration days before he hosted the Republican presidential nominee debate.

Usefulness: This article shows former Fed chairman Alan Greenspan responding to Congressional questioning about his role in the subprime housing fiasco that contributed to the economic recession. Greenspan admits to mistakes he made in reading the economic climate and trusting banks to act in the best interests of their investors and shareholders. The article portrays Greenspan in a vulnerable way, which is a stark contrast to how the former chairman was viewed during his reign.  It shows the beginning steps in the political hunt for accountability for the financial meltdown.

Work cited: NBC Universal Company information page, http://www.nbcuni.com/About_NBC_Universal/Company_Overview/NBC_Universal_Television_Group_2.shtml;

MSNBC Media Kit, http://www.nbcuni.com/About_NBC_Universal/Company_Overview/NBC_Universal_Television_Group_2.shtml

Bercovici, Jeff. Mixed Media Portfolio.com

Carter, Bill. Microsoft Quits MSNBC TV, but Web Partnership Remains Nytimes.com

Friday, January 22nd, 2010

Should the Federal Government regulate the Federal Reserve in order to establish more control over a volatile economy?

Thursday, January 14th, 2010

Timeline:

1791-1811  The First Bank of the United States is established as first central bank in America. The bank closed when Congress failed to renew the original 20 year charter.

1816-1836  The Second Bank of the United States is created as a central bank to help manage national debt and standardize currency.  This bank also failed to exist beyond it’s initial charter.

1913  Woodrow Wilson signs the Federal Reserve Act into law. This establishes today’s Federal Reserve System, consisting of 12 Federal Reserve Districts and Federal Reserve Banks.

1929  The stock market crashes on October 29th. Many believe this event sparked the Great Depression, resulting in massive bank failures and driving the unemployment rate up.  By 1933, 11,000 banks had closed and 25-30% of America’s work force were unemployed.

1944-1971  The Bretton Woods era started in a small place in New Hampshire that shares the era’s name.  Forty-four delegates from various countries gathered there after the Second World War to construct a financial system and set financial standards that would stabilize the global post-war economy.

1971  President Nixon breaks away from the world gold standard set by the Bretton Woods system.  Breaking away from the gold standard allows the U.S. dollar to determine value through market forces instead of being fixed to gold reserves.

2001-2007  The housing bubble starts after interest rates are lowered following the attacks on September 11th. The bubble begins to burst in the spring of 2007 when large financial companies slow or stop lending and begin to report heavy revenue losses.

2008  President Bush signs the Emergency Economic Stabilization Act to provide stability and continuity to a struggling U.S. economy. The bill called for financial bailouts of key financial companies.

2009 (February)  House of Representatives member Ron Paul introduces H.R. 1027, also known as the Federal Reserve Transparency Act, in order to allow Congress access to information about Federal Reserve actions.

2009 (November)  Senator Chris Dodd introduces a Financial Reform Bill that would create a single federal bank regulator, combining the Federal Reserve with other federal bank regulators.

Links:

http://www.federalreserve.gov/boarddocs/speeches/2004/200403022/default.htm This is text from an interesting speech given by current Federal Reserve Chairman Ben Bernanke.  In the speech, he discusses how the Federal Reserve exacerbated the national financial crisis during the Great Depression. Bernanke had not yet been appointed as the Fed’s chairman at the time of this speech.

http://www.washingtonpost.com/wp-dyn/content/article/2009/12/07/AR2009120703908.html This Washington Post article discusses why House of Representatives member Ron Paul is unlikely to vote for the bill he introduced to the house.  It shows Paul’s voting record and how he remains an outsider to the politics of Washington.

http://www.bloomberg.com/apps/news?pid=20601070&sid=al2H.fj3COFA This Bloomberg news article discusses Senator Chris Dodd choosing not to seek re-election.  The article mentions Dodd’s work on the Financial Reform Bill and highlights other Congressional achievements. It also discusses his decrease in popularity.

http://docs.google.com/viewer?a=v&q=cache:0h-xIJAS0_MJ:ecedweb.unomaha.edu/ve/library/GFRT.PDF+Federal+Reserve&hl=en&gl=us&sig=AHIEtbSozpowCkZZ-qnhHqP34U9NmkLwag This is a reference document from the library at the University of Nebraska at Omaha.  It is a list of glossary terms associated with the Federal Reserve.

http://www.nytimes.com/2008/10/24/business/economy/24panel.html This New York Times article reports on former Fed Chairman Alan Greenspan’s Congressional hearing.  It discusses his fall from grace and speaks of him admitting errors he made while he was chairman.

Summary:

The economic crisis experienced in 2008 created a recession severe enough to draw comparisons to the Great Depression experienced in the late 20’s and early 30’s.  The Federal Reserve had been established prior to the Great Depression in order to prevent economic disasters like the Great Depression and our country’s current recession.  During this current economic downturn, the Fed took unprecedented steps to jump-start recovery.  Politics and the economy are also incapable of being separated.  The Fed currently is battling to remain independent of politics.  It maintains that unpopular choices have to be made to ensure that markets maintain stability. However, the current recession has the general public and politicians seeking answers.  Current legislation looks to get those answers while walking the fragile line of political interference with a historically strong U.S. economy.

Monterey, other coastal areas may become critical habitat for sea turtles

Friday, January 8th, 2010

http://www.thecalifornian.com/article/20100106/NEWS01/1060309/1002/NEWS01

The above article discusses the possible increase in protected habitat for leatherback sea turtles.

http://www.tdn.com/news/article_c47da142-fa36-11de-b6ed-001cc4c03286.html