Fed Secrecy: It's the Influence, Not the Money - The American Spectator | USA News and Politics
Fed Secrecy: It’s the Influence, Not the Money

It seems that the upshot of last week’s revelations that the Fed provided enormous emergency loans to the biggest names on Wall Street is a controversy over whether the Fed loaned out $7.7 trillion, as some outlets have reported. 

That’s a shame, because the total amounts loaned out are sort of beside the point. Bloomberg‘s original story, which led off the coverage, reported that the Fed made $7.7 trillion in total commitments for the worst-case scenario, but only lent out $1.2 trillion. Those numbers appear to be accurate. 

Now, $1.2 trillion is a lot of money, by any standard, and in comparison to TARP. Yet the dollar amount is not as important as the fact that the Fed gave banks like Goldman Sachs and Citigroup what they needed to stay afloat. If all the banks needed to avoid bankruptcy was $1 million and the Fed gave them that $1 million when no one else would, that $1 million would be hugely significant. 

The fact that certain critics have fixated on an overblown loan figure shouldn’t overshadow the real story here, which is that a number of big banks got a lifeline from the Fed that the public, and Congress, didn’t know about until well after the fact. 

Sign Up to receive Our Latest Updates! Register

Notice to Readers: The American Spectator and Spectator World are marks used by independent publishing companies that are not affiliated in any way. If you are looking for The Spectator World please click on the following link: https://spectatorworld.com/.

Be a Free Market Loving Patriot. Subscribe Today!