* Federal Reserve Employees are not part of the US Civil Service System and are not covered by government employees' health insurance or pension programs. Who does the hiring and firing? Except for the highly publicized Chairman and 7 member Washington Board, this is in private, unelected hands.
* Federal Reserve Banks are not listed as government organizations by the telephone companies, a small but telling fact.8. The Fed has been notoriously lax in monitoring the member banks, even well within its legal power to do so. That's a big reason we got the Consumer Financial Protection Bureau (CFPB) from Elizabeth Warren, even over the vociferous objections of the banks and Wall Street who ultimately got their way in not having her head the new Bureau (perhaps they would have preferred that to having her as a Senate adversary now?).
9. Zarlenga also cites:
1) JOHN L. LEWIS, Plaintiff/Appellant, vs. UNITED STATES OF AMERICA, Defendant/Appellee.
(No. 80-5905, UNITED STATES COURT OF APPEALS, NINTH CIRCUIT
680 F.2d 1239; 1982 U.S. App. LEXIS 20002; March 2, 1982, Submitted; April 19, 1982, Decided)
to show that the Federal Reserve is not a government agency, saying
The district court dismissed, holding that the Federal Reserve Bank is not a federal agency within the meaning of the Federal Reserve Act and that the court therefore lacked subject matter jurisdiction".
"Federal agency" is defined as: the executive departments, the military departments, independent establishments of the United States, and corporations acting primarily as instrumentalities of the United States, but does not include any contractors with the United States....
There are no sharp criteria for determining whether an entity is a federal agency within the meaning of the Act (28 U.S.C. 2671), but the critical factor is the existence of federal government control over the "detailed physical performance" and "day to day operation" of that entity". Other factors courts have considered include whether the entity is an independent corporation", whether the government is involved in the entity's finances". and whether the mission of the entity furthers the policy of the United States" Examining the organization and function of the Federal Reserve Banks, and applying the relevant factors, we conclude that the Reserve Banks are not federal instrumentalities for purposes of the FTCA, but are independent, privately owned and locally controlled corporations.
Each Federal Reserve Bank is a separate corporation owned by commercial banks in its region. The stockholding commercial banks elect two thirds of each Bank's nine member board of directors.
10. Historically, when faced with unemployment vs. its other, and more recent, mandate to control inflation, the Fed chooses to control inflation. This results in a tight monetary policy, in which there is often insufficient currency to meet productive capacity. The Congressional Budget Office (CBO) said, until last year, that there was a trillion dollar/year output gap (the difference in money between what could be produced vs. what is produced, given available human and natural resources, without inflation).
That's just 10 reasons the Fed is not a government agency. There are more.
A true government money issuing agency, in contrast, could issue dollars into the real economy via spending bills, without debt, without interest, and without propping up the rentier banking system that has so threatened our economic stability ever since inception in 1913.
We could End the Debt Crisis with debt-free United States Notes.
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