Kucinich: ‘Is the Fed paying banks not to loan money?’

[babsbunny]

http://rawstory.com/08/news/2009/07/21/kucinich-is-the-fed-paying-banks-not-to-loan-money/

By Stephen C. Webster

Published: July 21, 2009

House Domestic Policy Subcommittee plans probe of TARP funds

Ohio Democratic Congressman Dennis Kucinich wants to know: “If isn’t about keeping people in their homes or providing credit to businesses, what is it for?”

Expressing his frustration before the Government and Oversight Committee, the two-time presidential candidate suggested that the Federal Reserve may be paying banks to hoard money and avoid making loans.

Before the committee — which assembled Tuesday to hear the testimony of Neil Barofsky the Special Inspector General for TARP, along with Federal Reserve Chairman Ben Bernanke — Kucinich wondered aloud if “banks are parking a historic amount of taxpayers’ money in the Federal Reserve while the businesses and consumers across America are starved for credit,” and whether the Federal Reserve is paying banks to avoid making loans.

[JDPriestly]

1. K&R As usual, Kucinich speaks the truth clearly. The others just muddle along.

[Hydra]

2. I'm so tired of this "We have to get the system going again!"

The system FAILED. Bets were made on money that wasn't there, and it will happen again in the future, and the little people will be hurt while the people behind it all will make Billions/Trillions.

Currency is supposed to help us do business more easily. Instead, it's killing us.

[Kid Dynamite]

11. Definition of failure

Is it really a failure if they make trillions? Further, is it a mere failure of currency? Seems like their trillions still command the same power and violence as always.

What failed Hydra? What is "The System"? Seems to me that its easy to make the radical statement, not so easy to face the logical conclusions that it draws out.

If the system can't "get going again", or we don't want it to, whats the alternative?

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x6108282

[Hydra]

12. Defining failure:

Is it really a failure if they make trillions?

It may be a triumph for them, but if it kills people to do it, it's a failure for the people who support the society we have.

Further, is it a mere failure of currency? Seems like their trillions still command the same power and violence as always.

Sure. It's a failure of access to currency. Access is controlled by people who don't answer to the people and apparently aren't invested in keeping the system going smoothly.

What failed Hydra? What is "The System"? Seems to me that its easy to make the radical statement, not so easy to face the logical conclusions that it draws out.

The System is Capitalism. It fails to do as advertised, even when heavily regulated. The logical conclusions are things I've been advocating for years to do.

If the system can't "get going again", or we don't want it to, whats the alternative?

The system WILL get going again. New bubbles will be created, new levels of lawlessness among corps will be reached, and we will sigh and go on.

I'd rather we try a socialist model with incentives for progress and efficiency, but as you correctly pointed out, that would mean the Billionaires club would be upset, and we can't have that.

[Kid Dynamite]

15. What I want to know then

is what the point is. If that is how you truly see things, but the way you spend your time and effort talking about politics are not consistent with your own view..isn't it just idle bitching? (not an insult, only a question)

I don't believe for a second that you think that partisan politicking is worthwhile or productive. So..where does that acknowledgement lead us?

[Hydra]

16. I'm not quite following

I don't support further disaster capitalism. Getting the system "going again" in its current form will do just that.

I am, however, a realist. No matter that I don't support it, too many people, even here on DU, support going back to the way things were so we can do it all again. In a way, I suppose it is idle bitching since beyond changing a few minds here and there, I have no real way to stop it.

But like the Wars, Profiteering, Torture, TARP and everything else, I speak, I warn, and I work against it in my small way. And in my small way, I make a difference, even as I work to stay on top of what's happening.

[Kid Dynamite]

17. I am saying that by your own words a more radical critique is called for

But what is happening here, and not only by you, seems more like talking around the elephant in the room

[Hydra]

18. What, the fact that we need socialism or that we need to kick the Fed?

I try to work in small bites for the people who aren't quite on board yet. Something else I've learned over the years.

Sure, I have a preferred direction that we go in. It tends to freak people if you introduce to much real change to them though, so I point at things that are wrong and try to get them to consider what things would be like without those repugnant things. That sort of thing leads to other things, and before you know it, the person is delightfully "corrupted."

It all takes time, though.

[Kid Dynamite]

19. Tell me about it..

but at the same time, there is such a thing as going TOO slow

[Hydra]

21. Oh, I agree

But I've gotten much further being patient with most people than I did being a firebrand. In a sense, it doesn't matter that people are dying while time ticks on...when people are ready to accept it, they will. Before that, you may as well be talking in another language.

I was reviled here for years for speaking out against torture. Some here thought I was out of line for talking about things that were "pure speculation" and "yet to be proven." I suspect those same people insist that we aren't doing it now.

Revolution is a long process, even when it's done incorrectly. Doing it right may take more than one generation.

[earth mom]

3. Kucinich is a brave and true patriot. May he stay safe-the powers that be must hate him.

:loveya: :yourock:

[Echo In Light]

13. Agreed. I'm sure dark, vested interests would like to Silkwood his brake lines

K&R for DK!

[redqueen]

4. K&R

[unblock]

5. of course! the fed wants the banks to reduce their leverage, i.e., NOT make new loans

more loans = more risk, and the banks are precariously at risk, so they need to reduce their loans not add to them.

and you know want, washington signed on to this. if they REALLY wanted new loans, they would have created NEW banks with clean balance sheets and no reason not to lend. instead, they decided to PRESERVE THE EXISTING INSTITUTIONS, which necessarily means backfilling in the giant hole FIRST, before the new lending can really resume.

rescuing the overleveraged banks was the single WORST place in the world to put the bailout money if the goal was to increase lending.

[Festivito]

6. That's why the Bush admin wanted to stop reporting the M3?

A giant setup of sustainable losses into an upcoming presidency in order to denigrate whoever took over after Bush.

[troubledamerican]

9. The Fed sure would be useful in a coup d'etat.

Allende had a marginally successful first year, parallel to Obama -- followed by a Kissinger/Neocon recipe of "make the economy of Chile scream" and finally the military coup. (Which ushered in the torture state, and Operation Condor's secret police roundups in cooperation with all Latin American nations).

The Fed is currently leveraging and (so far) successfully avoiding a "deflationary spiral that would repeat the U.S. Great Depression".

However, hyperinflation looks like a healthy possibility.

And that would take us to the Weimar Republic...

Enter Sarah Palin's "Maverick" 3rd Party.

Sudden heart attack, blamed on "cigarette smoking". The chessgame strategy of delaying action on war crimes to defuse the economic timebomb & root-out the Cheney Sleeper Cells will become defacto policy as President Biden plays a holding pattern until Hillary can be elected in 2012.

SEPTEMBER 2009 attacks on Iran pushed the entire world into a "Cold World War" in which the 1970s OPEC oil embargo was repeated and magnified. Gasoline prices went to $12/gal by Christmas 2009...

Hillary Clinton runs in 2012. The electoral votes will be split below the required 270. There will be a repeat of the Election of 1824. The election will be thrown into the House of Representatives. Hillary will be chosen and immediately labelled "illegitimate" by the Right.

GOP stages walkout on Congress, April 2015. Only Democrats inside, plane crashes into Capitol Dome. Roberts swears-in "President In Exile" Palin/VP Giuliani as "emergency President" and new hand-picked Congress ratifies "New Constitution"...

[Festivito]

10. Exercising prediction skills can get scarily fun.

That's quite far into the future.

I'm thinking that our current fiscal crisis belongs mostly to international banking, rather than political takeover artists. Oh, certainly though, they intertwine, but not in concert with each other like baseball teams - more like competing sports.

Within the fiscal game, shock doctrine (Naomi Klein) operates. In the takeover game, there is no choice but to infiltrate Democrats for the next two decades at least.

Good health care must be defeated, but they'll survive if it doesn't. It does lead to the possibility of finding money susceptible Dems, and thus the infiltration accelerates.

Cheney will become old, Palin pale (although pretty), Giuliani a character. The bankers will revel in their loot and plan for their next adventure. They've nothing to gain from a plane into the dome, even that would not kill enough people. That lost nuke from the Bush admin would be interesting, but way too messy. They just want to hit a small city in order to make everyone afraid and ready to send in military money.

In the mean time, Obama will just make more money for the bankers to steal later.

Why bother writing a new constitution when it is so easy to just ignore the one in place.

Been fun. See ya.

[slipslidingaway]

7. Fed to pay interest on reserves that banks leave on deposit with Fed...

http://www.propublica.org/article/fed-to-the-rescue-a-timeline-1022

"October 6

The Fed makes two significant announcements. The first is that it will pay interest on reserves <13> that banks leave on deposit with the Fed. This move is intended to encourage banks to deposit more money with the Fed....


October 22

The Fed raises the interest rate it pays on banks’ reserve deposits <23>. Again, the move is meant to encourage banks to deposit more money with the Fed, giving it extra firepower for its now numerous new lending programs."

[TexasObserver]

8. Recommend

[Cessna Invesco Palin]

14. Every time he opens his mouth...

...he reminds me of why his support amongst Democrats during his two presidential "runs" was barely expressible as an integer.

[tkmorris]

20. Perhaps you'd like to address what he said

Instead of making snide comments about unrelated things?

[Cessna Invesco Palin]

22. Nah, I think I'll let it die.

He'll find some new shiny object an hour from now anyway.

[Hippo_Tron]

23. As posted on another thread, Kucinich hasn't uncovered anything secret here

Bernanke has stated that this could be an option they might use to control inflation.

http://www.reuters.com/article/ousiv/idUKTRE56K3OH20090721?pageNumber=1&virtualBrandChannel=11595