FED UP!: A Post about Ben Bernanke, Senator Bernie Sanders, and the Bailout…with a Song Parody

Submitted by Elaine Magliaro, Guest Blogger

Fed Lifts Veil of Secrecy (December 1, 2010)


“Almost two years ago I asked Chairman Bernanke to tell the American people which financial institutions and corporations received trillions of dollars as part of the Wall Street bailout.  He refused.  Today, as a result of an audit-the-Fed provision I put into the financial reform bill, we finally learn the truth – and it is astounding.”

— Sen. Bernie Sanders (I-Vt.), author of Fed disclosure provision

Lifting the Veil of Fed Secrecy

Who Got Secret Fed Bailouts?

The Big Winners

• Goldman Sachs received nearly $600 billion
• Morgan Stanley received nearly $2 trillion
• Citigroup received $1.8 trillion
• Bear Stearns received nearly $1 trillion
• Merrill Lynch received some $1.5 trillion
• Deutsche Bank, a German lender, sold the Fed more than $290 billion worth of mortgage securities
• Credit Suisse, a Swiss bank, sold the Fed more than $287 billion in mortgage bonds

Also receiving secret Fed bailouts

• General Electric
• McDonald’s
• Caterpillar
• Harley Davidson
• Toyota
• Verizon 

Release: Sanders Statement on New Federal Reserve Lending Disclosures (March 31, 2011)

WASHINGTON, March 31 – Under court order, the Federal Reserve today identified more banks that took loans during the financial crisis using a once-secret system that Sen. Bernie Sanders (I-Vt.) called “welfare for the rich and powerful.”

A Sanders provision in the Wall Street reform law already had forced the Fed last Dec. 1 to name banks that took trillions of dollars in emergency loans during the crisis.

“The Federal Reserve bailout was welfare for the rich and powerful and you-are-on-your-own rugged individualism for everyone else,” Sanders said. “The information released by the Fed today should never have been kept secret.  This money does not belong to the Federal Reserve; it belongs to the American people.  I applaud Bloomberg News, Fox News and others for their success in lifting another veil of secrecy at the Fed.”

Sanders said the latest disclosure raises questions about conflicts of interest. While Jamie Dimon, the CEO of JPMorgan Chase, served on the board of directors of the New York Fed, in one month alone, April of 2008, JPMorgan Chase received a combined $313 billion in Fed loans directly benefitting JP Morgan Chase and other financial institutions.  

“This is an obvious conflict of interest on its face that must be investigated as part of the independent audit that my amendment requires to be completed this summer.  When JPMorgan Chase was telling the world about their great financial success, it seems like they were using the Fed’s discount window as a giant piggy bank.” 

Sanders’ provision in the Wall Street reform bill required the central bank to disclose which financial institutions, corporations, and foreign central banks took more than $3 trillion in what were secret loans.

His amendment also directed the Government Accountability Office to conduct the first top-to-bottom audit of the Federal Reserve.  The findings of that investigation by the non-partisan research arm of Congress are due to be made public this July.

Usage of Federal Reserve Credit and Liquidity Facilities

MSNBC w/ Cenk: Matt Taibbi – Magic Money Printing Machine at The Fed

Need I say more?????

I’ll just add this: Because April is National Poetry Month, I thought I’d write a song parody to go with this post. I dedicate it to Senator Bernie Sanders of Vermont.

Guess Where Our Money Goes?: A Song Parody by Elaine Magliaro

(To be sung to the tune of That’s Where My Money Goes…to Buy My Baby Clothes)

Guess where our money goes? Not where you might suppose!

It goes to millionaires with big yachts and grand chateaux.

They’re worth their weight in gold. The rest of us keep getting rolled.

Hey, hey! That’s where our money goes!

Bernanke is in the tank for Goldman Sachs and Citibank,

GE and Verizon, too. They got bailout funds—it’s true!

The Fed gave them lots of dough—tried to keep it a secret though.

Hey, hey! That’s where our money goes!

The rich keep getting more and more! It’s something that we should deplore.

Citizens should know about the money that Ben’s passing out.

Bernanke, it just ain’t fair. Main Street oughta get a share.

Hey, hey! That’s where our money goes!


Sanders Op-Ed: Sunshine Week
Source: The Caledonian-Record (March 16, 2011)

Articles & Blog Posts by Matt Taibbi

The Great American Bubble Machine
From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression — and they’re about to do it again
(This article appeared in the July 9, 2009 issue of Rolling Stone.)
Wall Street’s Big Win
Finance reform won’t stop the high-risk gambling that wrecked the economy — and Republicans aren’t the only ones to blame
(This article appeared in the August 19, 2010 issue of Rolling Stone.)

Why Isn’t Wall Street in Jail?
Financial crooks brought down the world’s economy — but the feds are doing more to protect them than to prosecute them
(This article appeared in the March 3, 2011 issue of Rolling Stone.)
Looting Main Street
How the nation’s biggest banks are ripping off American cities with the same predatory deals that brought down Greece
(This article appeared in the April 15, 2010 issue of Rolling Stone.)

Jefferson County, Alabama: Screwed By Wall Street, Still Paying
(TAIBBLOG—April 7, 2011)

Why is the Fed Bailing Out Qaddafi?
(TAIBBLOG—April 1, 2011)

Edited to add:
The S.E.C.’s Revolving Door: From Wall Street Lawyers to Wall Street Watchdogs (TAIBBLOG—March 30, 2011)

66 thoughts on “FED UP!: A Post about Ben Bernanke, Senator Bernie Sanders, and the Bailout…with a Song Parody”

  1. Elaine and Swarthmore,
    Add me to that list that wants to protect their children and grandchildren! These banksters need jail time.

  2. Elaine, I agree about the children and grandchildren. That is one of the reasons I argue against wasting a vote and letting the Tea Party Express take over.

  3. AY,

    I appreciare your generous comments. I admit that I can get passionate about certain issues–and outspoken. Sometimes being outspoken when I was a teacher got me into trouble with administrators. Still, I always felt better when I spoke up in defense of teachers and spoke out for what I believed was best for our students educationally.

    I worry about what is going on in this country. I am concerned about what the future may hold in store for my daughter and her husband and any grandchildren that I may have if I am so fortunate. I think that is part of what drives me.

  4. Buddha,

    A spark of hope is about all I can muster at this point.

    BTW, have you read Matt Taibbi’s most recent Rolling Stone article? It’s MUST reading!

    The Real Housewives of Wall Street:
    Why is the Federal Reserve forking over $220 million in bailout money to the wives of two Morgan Stanley bigwigs?


    In Financial Crisis, No Prosecutions of Top Figures
    Published: April 14, 2011

    It is a question asked repeatedly across America: why, in the aftermath of a financial mess that generated hundreds of billions in losses, have no high-profile participants in the disaster been prosecuted?

    Answering such a question — the equivalent of determining why a dog did not bark — is anything but simple. But a private meeting in mid-October 2008 between Timothy F. Geithner, then-president of the Federal Reserve Bank of New York, and Andrew M. Cuomo, New York’s attorney general at the time, illustrates the complexities of pursuing legal cases in a time of panic.

    At the Fed, which oversees the nation’s largest banks, Mr. Geithner worked with the Treasury Department on a large bailout fund for the banks and led efforts to shore up the American International Group, the giant insurer. His focus: stabilizing world financial markets.

    Mr. Cuomo, as a Wall Street enforcer, had been questioning banks and rating agencies aggressively for more than a year about their roles in the growing debacle, and also looking into bonuses at A.I.G.

    Friendly since their days in the Clinton administration, the two met in Mr. Cuomo’s office in Lower Manhattan, steps from Wall Street and the New York Fed. According to three people briefed at the time about the meeting, Mr. Geithner expressed concern about the fragility of the financial system.

    His worry, according to these people, sprang from a desire to calm markets, a goal that could be complicated by a hard-charging attorney general.

    Asked whether the unusual meeting had altered his approach, a spokesman for Mr. Cuomo, now New York’s governor, said Wednesday evening that “Mr. Geithner never suggested that there be any lack of diligence or any slowdown.” Mr. Geithner, now the Treasury secretary, said through a spokesman that he had been focused on A.I.G. “to protect taxpayers.”

    Whether prosecutors and regulators have been aggressive enough in pursuing wrongdoing is likely to long be a subject of debate. All say they have done the best they could under difficult circumstances.

    But several years after the financial crisis, which was caused in large part by reckless lending and excessive risk taking by major financial institutions, no senior executives have been charged or imprisoned, and a collective government effort has not emerged. This stands in stark contrast to the failure of many savings and loan institutions in the late 1980s. In the wake of that debacle, special government task forces referred 1,100 cases to prosecutors, resulting in more than 800 bank officials going to jail. Among the best-known: Charles H. Keating Jr., of Lincoln Savings and Loan in Arizona, and David Paul, of Centrust Bank in Florida.

    Former prosecutors, lawyers, bankers and mortgage employees say that investigators and regulators ignored past lessons about how to crack financial fraud.

  5. “Carl Levin, chair of the Senate Permanent Subcommittee on Investigations, will recommend that Goldman executives who testified before his panel, including chairman and chief executive Lloyd Blankfein, be referred to the Justice Department for possible criminal prosecution”

    My feet are doing a happy dance right now … 😀

  6. Elaine,

    I have yet to see anyone put as much into gratis service that you do and for that we are blessed…. You must have been one hell of a teacher and friend… Your children were lucky…your biological ones as well….

  7. Elaine,

    I saw that story about Levin’s committee this morning and dared to hold a spark of hope. There are few people in this country who deserve to go to prison as much as Llloyd Blankfein, CEO of Goldman and his partner in crime, the former Treasury Secretary (and former Goldman CEO), Henry Paulson. They are bank robbers armed with a fountain pens.

    If Levin can bring them to justice? Hell, even if only gets Blankfein? I’ll add Levin to the list of pols who understand what their job is and do their best to do it. It’s a very short list with plenty of room for expansion.

  8. Key Senator Calls For Criminal Investigation Into Goldman Sachs’ ‘Shitty Deals’
    Think Progress, 4/14/2011

    Yesterday, a Senate subcommittee investigating Wall Street’s role in the recent financial collapse released a massive, 639-page report documenting the role mortgage lenders, investment bankers, and insufficient regulatory checks on Wall Street played in creating America’s worst economic disaster since the Great Depression. But this congressional investigation could lead to much more public scrutiny into one of Wall Street’s biggest players. In a statement announcing the report’s findings, subcommittee chair Sen. Carl Levin (D-MI) suggested that Goldman Sachs could face criminal charges:

    Sen. Carl Levin (D-Mich.) said on Wednesday that he plans to refer Goldman officials, and potentially officials from other organizations, to the Justice Department for possible prosecution and to the Securities and Exchange Commission for possible civil proceedings.

    “In my judgment, Goldman clearly misled their clients and they misled the Congress,” said Levin, the chairman of the Senate Permanent Subcommittee on Investigations. […]

    Levin said prosecutors should look at not only Goldman’s statements to the public about its investment products, but also the statements officials made to Congress. Goldman officials, including chief executive Lloyd Blankfein, gave testimony that was “inaccurate,” Levin said. It is a crime under federal law to make a false statement to Congress or to obstruct congressional proceedings.

  9. Big banks are government-backed: Fed’s Hoenig
    By Joe Rauch
    CHARLOTTE, North Carolina | Tue Apr 12, 2011

    (Reuters) – Big banks like Bank of America Corp (BAC.N) and Citigroup Inc (C.N) should be reclassified as government-sponsored entities and have their activities restricted, a senior Fed official said on Tuesday.

    The 2008 bank bailouts at the height of the financial crisis and other implicit guarantees effectively make the largest U.S. banks government-guaranteed enterprises, like mortgage finance companies Fannie Mae and Freddie Mac, said Kansas City Fed President Thomas Hoenig.

    “That’s what they are,” Hoenig said at the National Association of Attorneys General 2011 conference.

    He said these lenders should be restricted to commercial banking activities, advocating a policy that existed for decades barring banks from engaging in investment banking activities.

  10. Goldman Sachs Chief Blankfein Could Face Criminal Prosecution For Role In Financial Crisis
    By Shahien Nasiripour
    Huffington Post, 4/14/2011

    WASHINGTON — Goldman Sachs executives deceived clients in order to profit off the brewing financial crisis and then misled Congress when asked to explain their actions, concluded a top lawmaker who led a two-year investigation into Wall Street’s role in the meltdown.

    Carl Levin, chair of the Senate Permanent Subcommittee on Investigations, will recommend that Goldman executives who testified before his panel, including chairman and chief executive Lloyd Blankfein, be referred to the Justice Department for possible criminal prosecution, the Michigan Democrat announced Wednesday. Members of the subcommittee will now deliberate Levin’s proposal.

    A Goldman spokesman said its executives were truthful in their testimony, adding that the firm disagreed with many of the panel’s conclusions.

    Two and a half years after a historic crisis that has yielded not a single criminal conviction of anyone who played a leading role in causing it, the prosecution of such a high-profile Wall Street executive may satisfy the public’s desire to see culprits brought to justice. Last year, the Securities and Exchange Commission settled a lawsuit it had brought against Goldman.

    But the firm was just one target of a sweeping, 639-page report by the Senate panel into the causes of the crisis. Hardly a fluke occurrence, the meltdown was the product of a deeply corrupt financial system, one fueled by profit-hungry banks that deceived their clients, and overseen by lax regulators who were complicit in the firms’ chronic abuse of the most fundamental rules of the game, the report concludes.

    The investigation found a “financial snake pit rife with greed, conflicts of interest, and wrongdoing,” Levin said.

    More than any other government report produced in the wake of the crisis, this account names names, blaming specific people and institutions: Goldman Sachs, Washington Mutual, Moody’s Investors Service, Standard & Poor’s, the Office of Thrift Supervision and others. It targets four types of institutions, all of which it says played key roles in causing the crisis: mortgage lenders that offered prospective homeowners booby-trapped loans; regulators that were paid by the institutions they were regulating and cooperated in widespread deception; rating agencies that gave seals of approval to products they knew to be especially risky, all in the pursuit of market share; and Wall Street banks that duped investors into buying securities that only the insiders knew were destined to go bad.

  11. Surprise, surprise: rich get richer
    April 12, 2011The Boston Globe

    THIS IS the biggest stickup in American history. First we were told that in order to save the nation, we had to bail out irresponsible banks and decrepit car companies, and to extend the Bush-era tax cuts. Last week, we were told that the federal government would be shut down without $38.5 billion in cuts that will slash labor, education, transportation, and health programs, as well as State Department diplomacy. Those cuts are only the beginning as House Budget Committee Chairman Paul Ryan, the Wisconsin Republican, wants $6 trillion in cuts over the next decade, plus $4 trillion in tax breaks for corporations and the wealthy.

    The only people being saved are the wealthy.

    While unemployment remains at close to 9 percent, the average salaries for CEOs at 200 of America’s largest companies rose 20 percent, to $11.7 million, according to the New York Times. Last month, the Wall Street Journal reported that CEO bonuses at 50 major corporations rose 30.5 percent last year, the biggest gain in three years, to an average bonus of $2.5 million.

    The rich have recovered so fast that their share of America’s income is on track to break the all-time record. According to Emmanuel Saez of the University of California, the top 10 percent of Americans hoarded 46.3 percent of the nation’s income in 1932. That fell to around 31 percent in the 1950s and held steady into the early 1970s, due to a combination of World War II fiscal shocks, more progressive income and corporate tax policies, unions, and social programs. The top 1 percent had 19.6 percent of the nation’s income in 1928 and that fell to 7.7 percent by 1973.

    Then income for the wealthy roared back full circle. The share for the top 10 percent was back up to 45.6 percent in 2008. For the top 1 percent, it was back up to 18.3 percent in 2007. All signs point to these shares breaking the records of the 1920s and ’30s. In an email, Saez said, “I expect top income shares to be going up sharply in the near future … With a split Republican/Democrat, Congress/administration, it does not look like the government will take drastic policy steps to change this trend in the medium run (such as more progressive taxation, or stringent regulations). So I don’t see this trend changing.’’

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