zerohedge | With every passing day, the Fed is slowly but surely losing the game.
Only it is not just former (and in some cases current)
Fed presidents admitting central banks are increasingly powerless to
boost the global economy, even if they still have sway over capital
markets. What is far more insidious to the Fed's waning credibility is
when former economists affiliated with the Fed start repeating mantras
that until recently were only a prominent feature in the so-called
fringe media.
This is precisely what happened today when former central bank
staffer and Dartmouth College economics professor Andrew Levin, special
adviser to then Fed Chairman Ben Bernanke between 2010 to 2012, joined
with an activist group to argue for overhauls at the central bank that
they say would distance it from Wall Street and make its activities more
transparent and accountable to the public.
Levin is pressing for the overhaul with Fed Up coalition activists.
Many of the proposed changes target the 12 regional Federal Reserve
Banks, which are quasi-private and technically owned by commercial banks
in their respective districts.
All of that is not surprising. What he said to justify his new found cause, however, is.
"A lot of people would be stunned to know” the extent to
which the Federal Reserve is privately owned, Mr. Levin said. The Fed
“should be a fully public institution just like every other central bank”
in the developed world, he said in a conference call announcing the
plan. He described his proposals as "sensible, pragmatic and
nonpartisan."
Why is that stunning? Because it has long been a bone of contention
if only among the fringe media, that at its core the Fed is merely a
private institution, beholden only to its de facto owners: not the
people of the U.S. but to a small cabal of banks. Worse, the actual org
chart of who owns what is not disclosed, even as the vast majority of the U.S. population remains deluded that the Fed is a publicly owned institution.
As the WSJ goes on to note,
the former central bank staffer said he sees his ideas as designed to
maintain the virtues the central bank already brings to the table. They
aren’t targeted at changing how policy is conducted today. “What’s important here is that reform to the Federal Reserve can last for 100 years, not just the near term,” he said.
And this is coming from a former Fed employee and Ben Bernanke's
personal advisor! That in itself is a most striking development, because
now that the insiders are finally speaking up, it will be a race among
both current and prior Fed workers to reveal as much dirty laundry as
possible ahead of what is increasingly being perceived by many as the
Fed's demise.
