Reprinted from Campaign For America's Future
Here's a sentence from the Democratic Party's recently released draft platform:
"We will reform the Federal Reserve so that it is more representative of America as a whole, and we will fight to make sure that executives at financial institutions are not allowed to serve on the boards of regional Federal Reserve banks or select its members."
This sentence hasn't received much, if any, media attention. How important is it? Do party platforms even matter?
Foxes in the Henhouse
As our nation's central bank, the Federal Reserve exerts tremendous control over our nation's banks. Unfortunately, it is also largely controlled by them. Too often, it fails to reflect the will of the people whose representatives created it.
Some of us have been pushing for radical reform of the Fed's governing structure for a long time. I proposed removing bankers from Fed boards in 2012 and called the idea of representative governance "the People's Fed" in 2014.
JPMorgan Chase CEO Jamie Dimon, whose bank has an incredibly long laundry list of frauds and other major crimes served on the Federal Reserve's board for years. This powerful banker -- whose institution is supposedly regulated by the Fed -- even sat on the committee that determines the pay of senior Fed executives and approves their performance reviews.
Another Fed board member was the banking industry's top lobbyist and a senior executive for Wachovia Bank, an institution whose many scandals and crimes included deceptively packaging its toxic subprime mortgage-backed securities; rigging municipal bond bids, which led to a $148 million fine; and, worst of all, laundering $378 billion in drug money for the Mexican cartels that have murdered at least 85,000 people.
That last item meant, as we (perhaps indelicately) noted at the time, that she was probably only two or three degrees of Kevin Bacon away from the cartel leader known as "El Loco" -- "the Madman." That gentleman was arrested in 2012 for beheading 49 people and dumping their bodies in the town square.
Banking for the People
Most people would probably agree that preventing someone like that banker from setting policy for our central bank would be a good thing. The draft platform language is a step in the right direction.
The draft Democratic Party platform also supports "postal banking," which would let post offices provide basic banking services. That's a function they performed from 1910 until 1966.
An updated and expanded form of postal banking would be especially helpful to lower-income individuals and communities, who have been especially ill-served by Wall Street.
The Fine Print