Courtesy of Pam Martens
Federal Reserve Chairman Jerome Powell Testifying Before House Financial Services Committee, February 11, 2020
During his testimony to the Senate Banking Committee yesterday, Federal Reserve Chairman Jerome Powell let it slip out, for the first time, that the Federal Reserve has had a 10-year game plan to deal with the financial crisis. In response to a question on cyber threats from Senator Ben Sasse of Nebraska, Powell stated the following:
“They kind of pay us to be awake at night worrying about things. I would say that if you look at what happened in the financial crisis, we had a game plan there. We implemented it over the course of 10 years. I won’t say that it’s perfect or anything like that, but we have a plan that is meant to address those kinds of things.”
“Those kinds of things?” The financial crisis, fueled by corruption and lax regulation of Wall Street banks, destroyed the housing market in the U.S. and left the U.S. economy in tatters. Millions of Americans lost their jobs and their homes to foreclosure. The New York Fed was the supervisor of key Wall Street banks that caused this problem – shouldn’t it have had a 10-year game plan to prevent “Those kinds of things” instead of creating the game plan after the damage had been done?
Wall Street On Parade has been carefully following the Federal Reserve for the past decade and filing Freedom of Information Act requests. The Fed has repeatedly been non-responsive. This is the first time we are hearing about any formal 10-year game plan to deal with the worst financial crisis since the Great Depression. It’s time for the Fed to come clean with the American people about the granular details of that plan and allow elected members of Congress to vote on it.
We do, however, know that the Federal Reserve set out to keep the $29 trillion part of that secret 10-year game plan wrapped behind a dark curtain from the American people. That’s the cumulative amount of money the Fed funneled to teetering Wall Street banks and global central banks to prop up the still corrupt Wall Street trading houses. It took more than two years of court litigation, an amendment to the Dodd-Frank financial reform legislation, and the research work of the Levy Economics Institute to bring that into the light. Now the Fed is at it again, with no Congressional oversight or any vote held in Congress. (See Fed Repos Have Plowed $6.6 Trillion to Wall Street in Four Months; That’s 34% of Its Feeding Tube During Epic Financial Crash.) Is the Fed’s latest money funnel to unnamed trading houses on Wall Street also part of its 10-year game plan?
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