MSNBC's Dylan Ratigan talks to Rep. Alan Grayson about the amendment passed by the House Financial Services Committee to allow an independent audit of the Federal Reserve. If Alan Greenspan is not happy about it, I take that as a good sign they did the right thing. It only took putting this country on the edge of financial ruin that we're not out of yet for the S.O.B. to ever admit he might be wrong about anything.
Ratigan: Alright first big newsmaker of the Meeting, Democratic Alan Grayson, better known for some of his fiery comments on Republicans and health care, now taking aim at the Federal Reserve along with so many others. He says the Federal Reserve is more secretive than the CIA, and his new amendment co-sponsored by Republican Ron Paul would allow the first ever independent audit of the Federal Reserve. The amendment edged out a competing proposal from North Carolina Congressman Mel Watt who wants to limit those very audits.
Congressman Grayson now joins the Morning Meeting. Your amendment approved by the House Financial Services Committee—a huge step forward. Where do you go from here and what’s your level of confidence Representative that you can continue to addendum behind this piece of legislation?
Grayson: Where we go is to stop the secret bailouts. There have been hints and hints now for more than two years that the Fed’s been conducting huge bailouts on the scale of hundreds of billions of dollars to favor large failed banks. Now we’re going to find out all about it, and we’re going to decide whether it’s good or bad.
Ratigan: Comments from both the former Fed chief Alan Greenspan and for that matter former Fed chief going back even further Paul Volcker to the House Financial Services Committee. They say we can assure you that this protection of internal deliberations in reaching decisions that will affect market conditions and could expose sensitive information about particular institutions is indispensable to the Federal Reserve’s conduct of monetary policy. Basically if you look behind the curtain, you won’t like what you’ll see and it will screw things up worse. How do you respond to that?
Grayson: Well we are in Emerald City right now. We’ve arrived in Emerald City. Toto has just run underneath the curtain…
Grayson: …and we’re about to see who is that man behind the curtain and what’s he up to.
Ratigan: And they don’t want…and what would…what do you think is behind the curtain?
Grayson: Well what I think is favoritism towards selected big banks that have failed and led us to the brink of national bankruptcy.
Ratigan: What of the fact that lending law…being a bank no longer pays that much money to lend money. Lending because of modern technology is a low profit business so the government legalized much higher ways to do it in secret and basically the Federal Reserve is their back end. Do you…are we on our way to restoring laws for lending in this country?
Grayson: Listen, capitalism requires rewarding success and punishing failure. That’s what Joseph Schumpeter said almost a century ago. So far we’ve seen plenty of reward for success of Wall Street but no punishment for failure—not when the Fed is handing out blank checks.