

Do Big Banks Control the US Government? - mhb
http://www.huffingtonpost.com/tyler-cowen/you-think-the-government_b_542475.html

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jamesbressi
I enjoyed the article, but "where's the beef?" it just seemed a little light
with the exception to the second to last paragraph:

"If you do wish to break or limit the power of the major banks, running a
balanced budget is probably the most important step we could take. It would
mean that our government no longer needs to worry so much about financing its
activities. Of course such an outcome is distant these days, mostly because
American voters love both high government spending and relatively low taxes."

Now it is getting somewhere, but it basically ends on that note--although the
last part of the last sentence was a baseless jab. Unfortunate this article
had potential but the focus was wrong.

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hga
Bingo; To take the topical example (although mostly due to it being the target
of a politically timed prosecution), Goldman Sachs is a primary dealer
(<http://en.wikipedia.org/wiki/Primary_dealer>). Truly trashing it is simply
not an option while the Federal Government is borrowing 1.5 trillion dollars a
year at low interest rates (when the government starts finding it difficult to
market its debt at the price it likes, that might change things a bit).

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roboneal
$787 Billion Tax Dollar Funded Bank Bailout engineered by the former CEO of
Goldman Sachs -- nope, nothing suspicious there.

~~~
showerst
Without turning this into a political discussion, it's worth noting that the
actual "bank" part of this should end up turning the government a handy
profit:
[http://www.freep.com/article/20100330/BUSINESS07/3300313/Ban...](http://www.freep.com/article/20100330/BUSINESS07/3300313/Bank-
bailouts-pay-government-profit)

~~~
Hoff
What you read on this whole topic from most any source (yes, including me) is
arguably suspect.

This even including audited postings based on FASB rules, given what's been
allowed under that in recent times.

This whole area is incredibly murky, and there's way too much spin generated
from all sides.

Here's a different view of the numbers behind the "profit":

[http://www.huffingtonpost.com/dean-baker/did-we-make-a-
profi...](http://www.huffingtonpost.com/dean-baker/did-we-make-a-profit-on-
c_b_522624.html)

The loans that are available from the US treasury are a huge amount of cash
flowing into certain businesses, for instance.

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theDeveloper
They sure are. Since 1913 when the Federal Reserve Act was passed. It's a bit
strange it happened just before Christmas on Dec 23; who cares about acts when
Christmas is right around corner.

Federal Reserve(family of bankers) is lending money to the US government
(money which by the way they create out of thin air by printing paper) so of
course they have the power.

Also the name Federal Reserve is quite deceiving - it is a private entity with
special status, it has nothing federal at all.

So US operates like a big ass corporation which right now is bankrupt.

Looking at all these things makes you question a lot of the issues that are
happening around us.

~~~
kahirsch
Everything you say is a little wrong. There's nothing unusual about bills
passing just before a recess. The Federal Reserve Act was big news at that
time. Extensive hearings were held on it and it received overwhelming support
from Democrats in Congress as well as President Wilson.

The Federal Reserve is partly a federal agency (led by the Board of Governors)
and partly a group of quasi-independent banks. The 12 regional Federal Reserve
Banks are nominally independent, but have a lot of control from the federal
agency, including direction of their open market operations.

The Federal Reserve does not directly lend money to the federal government. It
usually buys U.S. Treasury securities on the open market. This benefits the
government by leading to lower interest rates.

Most of the profits from the Federal Reserve are paid to the U.S. federal
government (the member banks get a 6% dividend on what they are required to
pay in to the Reserve).

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barnaby
Is the sky blue?

I mean, duh. Not only do Banks purchase a large amount of control (e.g. the
Government and get bailouts without strings attached) but also the bill being
discussed now to put strings on them also gives them a virtual monopoly in
financing by making it more difficult for anyone to be an angel investor.

