Tune in to the Dylan Ratigan Show on MSNBC at 4pm ET for an exclusive look at the transcripts of meetings of top Fed officials during the financial crisis from 2007-2010.
As I told you on Friday, the Huffington Post and the Dylan Ratigan Show got some significant internal documents from the Federal Reserve. We'll be releasing them at 4pm on my show, on the Huffington Post, and at DylanRatigan.com. They gave us the transcripts of certain internal meetings from 2007-2010, the meetings where their top officials planned their response to the gathering crisis (these are known as Federal Open Market Committee meetings, or FOMC). Willingly giving away documents isn't how the Fed typically operates, especially documents that might point to serious management problems within the central bank. They are known as a tight-knit bank-friendly super-secret agency.
Is the Fed finally coming clean?
After all, recently, Federal Reserve Chairman Ben Bernanke has engaged in a public relations campaign to improve the image of his vaunted Fed. The central banker has lectured to college students, gone on a media outreach campaign, and even opened a twitter account. New York Federal Reserve Bank President William Dudley has also gone out of his way to introduce his part of the system to the public. The New York Fed has opened up its research team to the world with a new blog.
Dudley, who runs the enormously powerful New York branch of the Fed, in some ways has gone even further than Bernanke. At a speech in New Jersey, Dudley argued that taxpayers should forgive mortgage debt owed to Fannie and Freddie, as a way of preventing foreclosures and stimulating the economy. This was remarkable - the Fed just doesn't get involved in policy disputes like this, and it would be hard to imagine that the Fed would intervene on the side of homeowners.
It seems like the public pressure on the Federal Reserve over the past few years had an effect. After a long, protracted battle in Congress, Senator Bernie Sanders and Rep. Ron Paul were able to force an audit of the Fed by the Government Accountability Office. That audit came out in 2011. Bloomberg, which filed a Freedom of Information Act to get the Fed's emergency lending data, won its suit to get that data in the courts.
So is it a new day at the Fed? The Huffington Post and my research team filed a Freedom of Information Act Fed back in January. We asked the Fed for the transcripts of the internal meetings of the Fed's open market committee (FOMC) from 2007-2010. These meetings are where decisions are made, and they are released on a five year time lag. The Fed released the transcripts from 2006 earlier this year, and that transcript showed that the top officials at the Fed simply were not concerned about the housing bubble. It was fascinating and useful information, critical for policy-making around our banking system.
I thought, since the Fed wants to turn over a new leaf, why not ask for the transcripts of the meetings from 2007-2010? There are no proprietary secrets there. The Fed will release them in a few years anyway. Let's just accelerate the timetable, and let everyone know what really went down at those meetings during the crisis of 2007 and 2008. And we got them. And we'll show you just what we got.
Still, in at least one way, it's not clear that the Fed has changed its stripes. When Dudley argued that Fannie and Freddie should reduce debt owed by millions of homeowners, what he didn't say is that this would help the big banks by making the home equity lines of credit they own on that very same debt more valuable. Taxpayers should transfer more capital to the big banks. This proposal is, as Gretchen Morgenson said, a "bailout by another name." And why wouldn't it be? Banks are still the Fed's real client. The board of directors of the New York Fed includes Jamie Dimon of JP Morgan Chase, as well as two other bankers.