Uncloaking the Fed’s Bailout

Photo by flickr user talkradionews under a Creative Commons license

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.


In a major victory for the business press and anyone who longs for more transparency at the Federal Reserve, a federal judge in New York ruled on Tuesday that the Fed must fork over  financial rescue records to two Bloomberg journalists. The reporters, Mark Pittman and Craig Torres, had sued the Fed’s board of governors after it refused to hand over bailout-related documents. What’s more, the Fed had refused to search for certain information relating to its actions in early 2008—namely, when the Fed’s New York branch loaned JPMorgan Chase nearly $13 billion to buy Bear Stearns. (JPMorgan and Bear Stearns ended up paying back the $13 billion loan plus $4 million in interest.)

The Fed’s bailout manuevers have come under criticism from members of Congress (especially Rep. Alan Grayson (D-Fla.)) and the media, including our own Nomi Prins. Like when the Fed let Goldman Sachs use investment-bank risk models even after it had converted into a bank holding company in order to qualify for bailout funds, allowing Goldman to make big-time, risky bets with taxpayers’ money.

Needless to say, this is an important victory for the press covering the bailout, and for shedding some light on the incredibly opaque actions the Fed has taken to rescue the financial system.  The decision’s timing couldn’t be better. It comes right after Fed chairman Ben Bernanke was nominated for a second term, so closer scrutiny of his decisions when the economy was near rock-bottom will be in the spotlight. The decision also comes as the Treasury Dept. weighs letting the Fed play a larger role in financial regulation by monitoring those “too big to fail” banks in our system—an idea I and others strongly oppose. I’ll be curious to see what those two crusading Bloomberg reporters turn up.

THE TRUTH IS...

what drives Mother Jones' team of 50-plus journalists. The truth is powerful, as evidenced by how hard those with something to hide, or profit to gain, seek to discredit it. The truth, stated boldly and reported meticulously, is what draws so many readers to Mother Jones.

And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

It's not, and if you can right now, please consider a year-end donation to support our team's fearless nonprofit journalism so we can close that big fundraising gap and finish the year strong, ready for all that's ahead in 2021. Whether you can give $5 or $500, it all matters in keeping us charging hard, and we'd be grateful.

payment methods

THE TRUTH IS...

what drives Mother Jones' team of 50-plus journalists. The truth is powerful, as evidenced by how hard those with something to hide, or profit to gain, seek to discredit it. The truth, stated boldly and reported meticulously, is what draws so many readers to Mother Jones.

And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

It's not, and if you can right now, please consider a year-end donation to support our team's fearless nonprofit journalism so we can close that big fundraising gap and finish the year strong, ready for all that's ahead in 2021. Whether you can give $5 or $500, it all matters in keeping us charging hard, and we'd be grateful.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate