"You Can't have it both ways Bernie"

Conservative Refocus

By Barry Refocus

Senator Bernie Sanders (D)Vermont, An avowed Socialists and populist has provided us with a rather keen teachable moment. Sanders, upon learning from the Fed audit, that over $ 16 trillion was provided to shore up banks the world over, was aghast as are we. But then Sanders goes on to criticize "Socialism for the rich and rugged --and individualism for everyone else." Our point here being that in a nation, if not a world, that has de-evolved into Socialism, this sort of crony-captalism and elite club favoritism has always ruled the day throughout collectivism's history. The leadership will always knee-jerk react to its members of the elite club and will no longer be directed by a people's Congress. Which is precisely what has happened in this case.

But, we would go one step further in pointing out that the reason for America's ongoing massive deficits has an astounding component of favoritism involved, which caters to a specific subset of individuals. These specific individuals are seeing redistributed income that they have done nothing to actually earn, beyond taking breath, come flowing into their homes and personal coiffures, while the rest of us toil in a cloud of building anger.

Once Socialism takes a firm grip on society, it becomes impossible to separate corporate cronyism from a social justice  derived effort at redistribution. The oligarchy will then steer funding and credits from the Government to these corporate elites and bottom-feeding couch potatoes creating a loop of wealth stolen from the people and then blithely given to those of both greater wealth and no wealth while crowding out the actual producers being a broad but dwindling middle class.

This, once again, is precisely what we have been seeing as jobless numbers go up and working American's struggles worsen.  Below is Sanders article from his website:

The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

Among the investigation's key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. "No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president," Sanders said.

The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse.  In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.

For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed.  Moreover, JP Morgan Chase served as one of the clearing banks for the Fed's emergency lending programs.

In another disturbing finding, the GAO said that on Sept. 19, 2008, William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds.  One reason the Fed did not make Dudley sell his holdings, according to the audit, was that it might have created the appearance of a conflict of interest.

To Sanders, the conclusion is simple. "No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed's board of directors or be employed by the Fed," he said.

The investigation also revealed that the Fed outsourced most of its emergency lending programs to private contractors, many of which also were recipients of extremely low-interest and then-secret loans.

The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo.  The same firms also received trillions of dollars in Fed loans at near-zero interest rates. Altogether some two-thirds of the contracts that the Fed awarded to manage its emergency lending programs were no-bid contracts. Morgan Stanley was given the largest no-bid contract worth $108.4 million to help manage the Fed bailout of AIG.

A more detailed GAO investigation into potential conflicts of interest at the Fed is due on Oct. 18, but Sanders said one thing already is abundantly clear. "The Federal Reserve must be reformed to serve the needs of working families, not just CEOs on Wall Street."

To read the GAO report, click here.