Sunday, May 30, 2010
Unleash the Logan Act
"The [Fed] sought to pre-empt criticism of its decision to reopen a controversial lending pprogram, in which it funnels US dollars to the European Central Bank and other central banks overseas, by arguing that the move was necessary to prevent Europe's crisis from reaching US shores. ... Some Republicans immediately assailed any US involvement in Europe's big bailout. ... Fed officials say the US faces little financial risk in the program because central banks are on the hook to repay, not commercial banks. ... 'Our view from here is that we don't want the financial spillover effects of what's going on in Europe to put at risk our incipient recovery here in the [US],' Charles Plosser, president of the Federal Reserve Bank of Philadelphia, said in an interview. ... In addition to accusing the Fed of bailing out foreigners, some congressional critics say the Fed is too tight with details about its rescue programs, a concern that is prompting lawmakers to demand more Fed disclosures", my emphasis, Jon Hilsenrath & Corey Boles at the WSJ, 11 May 2010: http://online.wsj.com/article/SB10001424052748703880304575236290266862342.html.
This is preposterous. Instead of letting Greece stew in its own juices, the Fed prints up tons of US dollars then claims it wants to "prevent Europe's crisis from reaching US shores". Nuts. What is it the foreign central banks will repay with? Wampum? Eric Holder, attorney general, here's an idea: indict some Fed Heads for a Logan Act violation. Come on. You're creative. Squeeze it in!