Post Rewrites the Story on Fed Lending

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Friday, 03 December 2010 06:42

After long insisting that disclosure of the loans made by its special lending facilities would lead to a financial disaster, the Fed made many of the details public on Wednesday, as required by the Dodd-Frank bill. Now that this information has been released and there have been no financial troubles, the Post, which had backed the Fed's refusal to disclose, attacked the proponents of disclosure.

It misrepresented the views of Senator Bernie Sanders, the lead Senate sponsor of the disclosure measure. The Post claims that Sanders had wanted the information made available immediately, as the loans were being made. In fact, Sanders had argued that information on disclosure could have been made available sooner, but not necessarily immediately. It is difficult to contend that a delay of 2 years is necessary or that any disclosure would jeopardize the Fed's conduct of monetary policy, which had been the original position of the Fed and the Post.

The Post also trivializes the fact that many large banks may have made large sums of money by having access to the Fed's lending facilities at a time when liquidity commanded a very high price. This is consistent with the Post's general support for measures that redistribute money from ordinary workers to Wall Street. However, most of the public does not share this goal for public policy.