At Citizen Vox Micah Hauptman uses the recent Bloomberg revelations (regarding the details of the Federal Reserve’s extraordinary efforts to stabilize the financial system) to frame a discussion of Fed transparency and accountability:
The Fed has vigorously defended its secrecy, claiming that working behind closed doors is necessary to prevent panic in financial markets. According to the central bank, disclosing information about the Fed’s actions would create a stigma for the banks that took advantage of the measures, and cause investors and counterparties to shy away from doing business with them.
But these excuses just don’t hold water. When the Fed spends money, it creates a government liability, for which the public is ultimately on the hook. And when the public is on the hook, it must be done in the light of day.
Hauptman notes the recent formation by Senator Bernie Sanders of a panel of experts, featuring a number of Levy Institute scholars (including James Galbraith, Randall Wray, and Stephanie Kelton), that will make reform recommendations regarding these very issues.