Thank you, Joan. We put together this bailout accounting because no one had yet sat down and figured out how much the full Wall Street bailout has actually cost taxpayers. Other attempts have looked at how much money the bailout could theoretically cost or how much we had spent on all stimulus and bailout programs (including things like the automotive bailout), but we wanted to know how much money Wall Street has actually received. The answer? A little more than $4.6 trillion.
And don't believe the hype about how the bailout has largely been repaid. We found that nearly $2 trillion is still outstanding and that it will take decades to recover most of our investment, if we can at all.
To help bring some accountability to this hidden bailout, we've produced a full balance sheet for all 30+ programs involved in the bailout, built a website and even a widget to track the ongoing costs, all of which you can find here: http://www.prwatch.org/node/8987
So, it's a sort of shadowy arm of the government, doing what it considers appropriate and helpful, and accountable to... no one? What about Congress or the Treasury or the President? Where are they in all this? Doesn't anyone have the power to rein in the Fed?
The president and Congress did have a chance to hold the Fed accountable. It's a moment that comes every five years, when the chairman is appointed and confirmed. And they gave Bernanke a bye. If you recall, there was a considerable movement in the Senate to vote against his reappointment precisely because of the opaque way that the Fed has acted during the bailout, but it is apparent that the president and the Democratic leadership in the Senate decided that the best thing was to have the stability of a reappointment.
We created the Fed to be independent and it is. What Congress ought to think about is whether the Fed should be more transparent if it's going to be spending a third of our GDP on a bailout. However, as I mentioned, many in Congress are actually moving to invest the Fed with more authority in financial crises.
More authority! What is Congress thinking? The Wall St. bail out was hardly popular in the first place. And that was before anyone shined a harsh light on the extent of the Fed's actions. Plenty of stories like this tend to disappear without a trace. What kind of response do you think your report will get?
The financial reform bill is being decided in Congress right now, so we hope that this will give those who want to cede more power to the Fed some food for thought. But we're not just hoping. We're doing. If you visit CMD's other project, http://BanksterUSA.org you'll find our action to " Say No to Boom and Bust." If you'd like to make sure that any future crisis is dealt with in a transparent and accountable manner, that's a good place to start.
Thanks for the suggestion, Conor. Let's go back to your report for a moment. How did you arrive at that colossal number of $4.6 trillion? Many people will assume that it can't possibly be true, that it's simply hyperbole.
If you go to our website ( http://www.prwatch.org/node/8987 ) and click through the links, you'll notice that, like Reading Rainbow, we have a strict "don't take our word for it" policy. We detail each program in the analysis and provide full sourcing for each number. In fact, virtually all of the information on the level of expenditures in the Fed programs come from the Federal Reserve itself.
The Fed, however, did not make it easy. Unlike the Treasury, there is no specific website or disclosure for their bailout programs and the actual numbers are buried within the websites of the Fed and several of its regional branches, like the St. Louis and New York banks.
To decide what constituted "bailout" programs, I looked at about ten different analyses, gathered each program and then went through them all to see which programs were started or ballooned in size after the crisis. We also looked at who benefits (and include a "who benefits" designation for each program!) and what form the financial aid was in. We also reviewed the entire thing with economists at the Center for Economic and Policy Research in Washington, DC.
Also, unlike other analyses that are out there, we didn't look just at what was theoretically at-risk in the bailout (though we do look at that too - it was about $13 trillion). We actually delved deep into the balance sheets of the Fed, Treasury and FDIC to see what they are actually reporting as having been spent on these programs.