Democratic Presidential hopeful hammers Federal Reserve in scathing editorial
Count Senator Bernie Sanders, I-Vt, among those who think the Federal Open Market Committee’s recent decision to raise the federal funds rate for the first time since June 2006 was a bad decision.
In fact, in a scathing editorial published by the New York Times, Sanders lambastes the Federal Reserve, its decision-making, its policies, and its sheer existence.
“The recent decision by the Fed to raise interest rates is the latest example of the rigged economic system,” Sanders writes.
“Big bankers and their supporters in Congress have been telling us for years that runaway inflation is just around the corner,” Sanders continues.
“They have been dead wrong each time. Raising interest rates now is a disaster for small business owners who need loans to hire more workers and Americans who need more jobs and higher wages,” Sanders writes. “As a rule, the Fed should not raise interest rates until unemployment is lower than 4%. Raising rates must be done only as a last resort — not to fight phantom inflation.”
In a separate statement released by Sanders after the Fed’s decision was announced last week, the Democratic Presidential hopeful said that Fed should “act with the same sense of urgency to rebuild the disappearing middle class as it did to bail out Wall Street banks seven years ago.”
WALL STREET is still out of control. Seven years ago, the Federal Reserve and the Treasury Department bailed out the largest financial institutions in this country because they were considered too big to fail. But almost every one is bigger today than it was before the bailout. If any were to fail again, taxpayers could be on the hook for another bailout, perhaps a larger one this time.
To rein in Wall Street, we should begin by reforming the Federal Reserve, which oversees financial institutions and which uses monetary policy to maintain price stability and full employment. Unfortunately, an institution that was created to serve all Americans has been hijacked by the very bankers it regulates.
Sanders goes on to call for widespread reform of the Fed, including changing the way Fed Board of Governors members are chosen, dramatically altering the Fed’s monetary policies, and making the Fed more transparent.
Sanders also states that any large bank that receives financial assistance from the Fed be required to “commit to increasing lending to creditworthy small businesses and consumers, reducing credit card interest rates and fees, and providing help to underwater and struggling homeowners.”
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