The Fed didn't exist in the United States until the early 1900s because Americans have had an uneasy relationship with central banking. We tried it in the early days of our republic, but Jackson nixed it and it never got back on its feet until the banking panics of the the late 19th- and early 20th-centuries made several people in high places very concerned. Even after it was created, we made twelve separate central banks for different regions of the nation, although nowadays it's more or less run through the D.C. branch. It's almost like the fourth branch of government; it doesn't really fall under legislative or executive and just chugs along on its own and occasionally appearing before congress to give a report.

What also disturbed me about that Sanders article was that sentence in the first quotation: "As a rule, the Fed should not raise interest rates until unemployment is lower than 4 percent. Raising rates must be done only as a last resort — not to fight phantom inflation." That worries me because politicians shouldn't be involved with the Fed so much. I said the Fed was like the fourth branch of government, and in a way I view it like the judicial branch: Like a Supreme Court justice, the president nominates someone to the Board, the Senate confirms it, and then that's that. They do whatever they want without politics being involved. Whether Sanders is right in his statement is irrelevant. It's the fact if politicians start trying to regulate what the Fed can and cannot do, then it's no longer apolitical and we may enter a situation like in other countries where one party tries monetary machinations to stay in power but ultimately fucks up the entire economy. Especially now with the way congress is; do you really think they have a good enough grasp on economics to have the right to decide our monetary policy? I certainly don't and I bet most of them are on my level.

Sanders may have a point about people being on the board, but then I'd say that's up to the president and the Senate to nominate and approve the right people. (I'll admit the example that Sanders gave is part of the NY branch, which neither the president nor congress has control over.) However no one currently serving on the Board of Governors has any investment banking background; Yellen was an academic before joining the SF Fed Branch, Fischer served in the IMF, Tarullo worked in government, Powell was in the Treasury Department, and Brainard also did economic counseling for the government. None of the top dogs really were tainted by being involved in Goldman Sachs or whatever.

For me his article seemed like a politician ranting to an angry crowd that's out for blood. The people who brought about the financial crisis definitely did not get their just desserts and that is atrocious. However what Sanders was proposing I felt just was a bunch of talking points that weren't well thought out. "Board positions should instead include representatives from all walks of life — including labor, consumers, homeowners, urban residents, farmers and small businesses." You mean like the different classes in the board? Class A represents banks and classes B and C represent the public; right now the NY branch has the goddamned president of the Met and the founder of the Freelancers Union on it. I don't really know how much more urban and labor you can get than that. "We should prohibit commercial banks from gambling with the bank deposits of the American people." Great, that's up to Congress, not the Fed. "We also need transparency. Too much of the Fed’s business is conducted in secret, known only to the bankers on its various boards and committees. Full and unredacted transcripts of the Federal Open Market Committee must be released to the public within six months, not five years, which is the custom now." OK, maybe that, but it's not like most of us are going to understand that anyway. And that probably wouldn't've stopped the housing problem in 2009 like Sanders predicts.

Actually, returning to my first post, why is Sanders suddenly complaining about the interest rate? It's under 1% right now and has been since the fuckfest in 2009. We haven't been over 4% since the mid-2000s. Is he just making up problems that aren't there?