From liberals and conservatives, from grassroots activists to lawmakers — the Fed is under attack for its role in aiding Bank of America’s takeover of Merrill Lynch, for which Bank of America received $20 billion in bailout funds. Says The Wall Street Journal:
“House lawmakers aren’t known for bipartisanship, but congressmen from both parties managed to come together from opposite sides at a House Oversight Committee hearing today to besiege Federal Reserve Chairman Ben Bernanke.”
“The onslaught was near universal, but the attacks came on different flanks. Republicans railed against what they perceived as a government imposing its will on business. Rep. Jim Jordan (R., Ohio) kept bringing up the October 2008 meeting where Treasury Secretary Henry Paulson, alongside Bernanke, presented bank CEOs with the TARP capital injections. “Do you see how a reasonable person could reach the conclusion that there, in fact, was this pattern of pressure from the government?”
“Ranking member Rep. Darrell Issa (R., Calif.) took a similar attack, after yesterday accusing the Fed of a coverup. He focused on the Bank of America deal with Merrill, indicating that it was reasonable for BofA to back out, and that government pressure pushed it into the deal.”
Politico features an article that refers to RLC Adviser Ron Paul (R-TX) as a trendsetter on the issue. Paul’s bill to mandate the first-ever audit of the Fed suddenly finds itself with 242 co-sponsors.
“Could it be possible that the Fed not only can cause these bubbles, but they’re … acting on their own?” asks Dr. Paul.
Senator Jim Bunning, who faces a tough re-election campaign, has also been a persistent critic of the Fed. “The Federal Reserve has handed out over $2 trillion to various financial institutions with absolutely no accountability for who they are giving to and how much those institutions are getting,” Bunning said. “I have asked repeatedly for an answer to this — but without success. If the Fed is going to print money hand over fist that the United States government can’t afford, I think the taxpayers have a right to know exactly who they are giving this money to and how much. It’s time for the Fed to come clean with the American people.”
In the Senate, Jim DeMint (R-SC) is the lead co-sponsor of HR 1207. He spoke to Glenn Beck about the bill on Tuesday:
Will the Fed have to finally answer to the people?