Isn't it great we have a massive private entity in control of the financial system that pleasantly reminds you that it is not accountable to government laws, and by extension is not accountable to the people ("A government of the people")
https://www.federalreserve.gov/faqs/about_14986.htm
> The Federal Reserve System is not "owned" by anyone. The Federal Reserve was created in 1913 by the Federal Reserve Act to serve as the nation's central bank. The Board of Governors in Washington, D.C., is an agency of the federal government and reports to and is directly accountable to the Congress.
> Some observers mistakenly consider the Federal Reserve to be a private entity because the Reserve Banks are organized similarly to private corporations. For instance, each of the 12 Reserve Banks operates within its own particular geographic area, or District, of the United States, and each is separately incorporated and has its own board of directors. Commercial banks that are members of the Federal Reserve System hold stock in their District's Reserve Bank. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. In fact, the Reserve Banks are required by law to transfer net earnings to the U.S. Treasury, after providing for all necessary expenses of the Reserve Banks, legally required dividend payments, and maintaining a limited balance in a surplus fund.
Going purely off memory here, I recall audits implying this may not actually be happening as legally required. It was back when Ron Paul was making a big deal about it though, I can't remember the specifics so I'm bringing it up to invite discussion.
There is zero evidence the Fed hasn't been paying the Treasury properly and a lot of audit evidence it has been.
The Fed isn’t pocketing change owed to the Treasury. It hasn’t properly owed anything on account of having shrunk its balance sheet by trillions of dollars [2].
[1] https://www.reuters.com/markets/us/fed-says-official-net-neg...
and this entire discussion about "government vs private" just completely neglects the widely used concept of orphaned entities, as if they don't exist
false dilemma
No, it means the FRBs have legal shareholders. (The Fed per se doesn't pay dividends.) The Treasury pays interest, that doesn't mean it's owned by bondholders.
We could easily re-write statute so the Fed doesn't pay dividends (it would become interest on reserves), they're an anachronism from the days when the Fed had to compete to induce membership. But that wouldn't do anything practical and it also wouldn't satisfy the conspiracy theorists, so it's not really in anyone's interest to bother with.
> are there explicit constraints on "limited" balances
No, though it's maintained at an amount equal to banks' paid-in capital [1]. Broadly speaking, it's another anachronism.
If you want to know about monetary policy, that’s FOIA’able. If you want to FOIA the FRB’s trades so you can front run them, that’s not allowed. (Similarly, you can FOIA the Department of Education. You can’t FOIA Sally Mae.)
As if anything that operates at the speed of FOIA would be useful for front running. Maybe if it was for some future action, but even that would be months out of date when you finally get a response.
What are you basing this on? There was a scandal several years ago when the order of transactions protocol leaked. If you now that X transaction systematically happens after Y, and you see X, you know Y is coming.
While I appreciate your desire for more accountability in our financial system, I feel this framing can be interpreted as needlessly alarmist. Although the NY Fed is not subject to FOIA —- because, as written, it excludes them —- they are of course subject to US law in general. Congress (and, by extension, the people) may pass laws to regulate them as they wish.
I know US courts have ruled that they are "private corporations". However, that's really a technical legal definition of "private" vs "government" under US law.
In a broader, globally applicable sense of "government"-versus-"private": they were created by Congress, they have special legal powers granted to them by Congress. Although they have private "shareholders" – nationally chartered banks are required by law to join one of the Federal Reserve Banks, and state chartered banks are permitted to if they desire and meet certain conditions – these private shareholders don't have the kind of power that shareholders have in a genuine private corporation. Although they get to vote for seats on the board, they don't get to set strategic direction or make major decisions, those are dictated to them from above. A body created by the government which you are legally required to join isn't really "private" just because it gives you some rather limited say in its running.
It is actually a bit like "corporatism" in fascist Italy – in which the government created "corporations" (a bit like trade associations) for each industry, which the employers in that industry legally had to join, and in which they could vote for its governing board, but in practice the government called the shots – except just for banks.
The Fed is part of the state. Unambiguously.
FRB New York is its interface with the private sector, analogous to Fannie Mae or the Tennessee Valley Authority.
The third result is from the St Louis Fed, a non-technical explanation of this https://www.stlouisfed.org/in-plain-english/who-owns-the-fed....
Everyone should read at least the first few chapters of "The Creature from Jekyll Island" to understand how much money (power) they have.
This is nonsense. The President and Congress control the Fed. And nobody can knowledgeably claim, today, that its banking members (legally, its shareholders) are more powerful than America’s non-bank financial institutions (e.g. Blackrock or Brookfield).
The greatest boon our billionaire class could inherit is a politically-controlled Fed. It’s why one of any autocrat’s first moves is bringing the central bank under their control.
I made a post earlier detailing the mechanism they use to extract the wealth from us: https://news.ycombinator.com/item?id=42621878
Instead I am saving in a money with fixed issuance, that people can't just print out of thin air. It's proof of work, like gold, but digital and with a capped supply.
If you don't understand, I'm afraid I don't have the time to explain it to you.
what is the alternative exactly? money created by god?
like no duh the economy & money system was created out of thin air. we created all this shit out of thin air.
created by putting in work of equal value, you know, like that one form of money that has lasted for millenia, as opposed to these fiat tokens that always fail.
> like no duh the economy & money system was created out of thin air. we created all this shit out of thin air.
One side of the economy was created out of thin air - the money. The other half - goods and services - were created through work. Sound like a fair system? Or a con trick?
Keep working for the tokens dude, and the banks will keep creating them out of thin air until you realise what they're doing.
So what's your alternative? Refuse to work unless you're paid in gold? Refuse to work and go on welfare? Refuse to work or eat? Become a banker and print your own tokens? What?
What banking system doesn't do this?
Ones with steps in between don't count.
Brazil's banking system prints reals out of thin air. But that's better, because they're real, says so in the name :)
This is also nonsense, though less so.
Money is created by private banks through lending. The government gets a cut, but that comes through taxation. Money creation is complicated, but it seems like every year someone watches a YouTube video about inflation and deduces, with zero further thought, that it must be a conspiracy.
Exactly. Every single dollar was created from thin air, as a "loan".
> it seems like every year someone watches a YouTube video about inflation and deduces, with zero further thought, that it must be a conspiracy.
I've been studying and researching this for years.
Not quite. Minted currency isn’t created from a loan. Neither is fiscal spending.
On the other side of the spectrum, money is destroyed through taxation (by the state) and repayment of debts and defaults (privately).
The monetary hypothesis of income inequality is overly simplistic. It supposes our tax, trade and funding policies are all dictated by monetary policy, which is obviously nonsense. (That or our tax, trade and social spending policies have no effect on inequality. Which is obviously stupid.)
It is an easily-digested hypothesis. We like those, particularly when the alternative is reading lots of arcane monetary financial texts.
Monetarily speaking, the government creates the money when it spends it. The loan then (and optionally) removes a similar amount of money from the system.
This is an enormous power, so we try to legally limit the government in how it can do this. (If we removed the Fed's independence and put it under the Treasury, the Treasury could just add numbers to the bank accounts of the government's employees and vendors. This is analogous to its minting power. We separate the Treasury and the Fed in part to fracture this power.)
I forgot one more creation/destruction mechanism above: the Fed's open-market operations. When the Fed buys assets, it creates money. When it sells them, it destroys money.
EDIT: Getting a lot of hate on this comment so allow me to clarify what I meant.
In the US we have a Constitutional Republic meaning elected representatives write the laws. People are not voting directly on laws and issues (on a federal level). The parent comment said that "The People decided this" but that's not an accurate statement. Congress decided this regardless of what people actually wanted. In fact, the public was largely divided on whether they wanted a Federal reserve during this time.
Also known as, "Five people with an IQ of 90 outvoting four people with an IQ of 110," or "One person in Iowa canceling two votes in California."
It is a highly idiosyncratic design decision in one democracy. It is not at all functionally necessary to America's system, and it's certainly not necessary to any other, as proven by its conspicuous absence from said democratic systems.
Five stupid people outvoting four dumb people is a natural outcome in every democratic system. One person outvoting two based on geographic location is not a natural outcome in every democratic system.
It's not that hard to understand if you take off your ideology blinkers for a moment and read the words in front of you.
If you have a point to make, make it.
You offered two traits of "democracy"
1. 5 low IQ voters outvote 4 high IQ votes
2. 1 voter in geography X can outvote 2 voters in geography Y
Trait 1 is a necessary feature of a democracy.
Trait 2 is not a necessary feature of a democracy.
You placing the two together in a list to describe "Democracy" is a category error.
Trait 2 is an idiosyncratic design feature of exactly one democracy, and it is not necessary to either this democracy in particular or to democracies in general.
You're right but that's not what we have in the US. We have a Constitutional Republic. Elected representatives write the laws. People are not voting directly on laws and issues (on a federal level). I'm not saying we should change it but for the parent comment to say that "The People decided this" is not an accurate statement.
That's all I meant with my comment.
> Study: Congress literally doesn’t care what you think
> Their study took data from nearly 2000 public opinion surveys and compared it to the policies that ended up becoming law. In other words, they compared what the public wanted to what the government actually did. What they found was extremely unsettling: The opinions of 90% of Americans have essentially no impact at all.
https://act.represent.us/sign/problempoll-fba
There are several articles about the study
To put this in a less politicized analogy, everyone will tell you they want to be rich, but how many people are willing to make sacrifices to become rich? It turns out many rich people today are rich because they didn't have to make very many sacrifices, while most everyone, including minimum wage employees, can become a millionaire. Mathematically it's not all that complex.
People will tell you what they want with some internalized model that isn't representative of the realistic trade-offs that would have to be made. So in effect what people say isn't based in the reality of what they actually want.
The average voter does not uniformly express these preferences.
They’re the majority. Almost every voter puts pocketbook issues near the top of their list, but not so far up that they’re willing to be civically active about it unless it’s a crisis. Herego, we spend most of our non-crisis time on non-pocketbook issues.
Divide et impera.
By design? Or because it's hard? You really think the sole thing keeping us from having more for less is conspiracy?
There is plenty of evidence happiness is, in part, relative. I’m not convinced there aren’t voters who would rather be a little poorer than better off but not as much as that other group.
> easier to create disruption than consensus, but the money is clearly backing disruption
I’m moderately wealthy. Split time between New York and Wyoming. It’s certainly wild that a bunch of voters in rural Pennsylvania feel strongly about lowering my taxes so long as it pisses off some liberals. If I had more resources and were more self centred, I could see myself encouraging that.
We're not in a crisis now, but people voted in the last national election as if we were, because Fox News told them that we were.
This is my problem with the “elites in control” hypothesis. It seems to rely on voters’ power existing, but being circumvented because said voters are too stupid to handle it.
You are correct (except that it need only be a subset of voters).
Now that you've done a good job of elaborating on the hypothesis, what exactly is your problem with it?
It doesn't work. Its testable predictions preclude a good amount of extant politics, including practically all populism. Elites the world over are losing in democracies because they presupposed, from afar, that they knew what their constituents wanted. Voters' interests are complex, and they can't be so easily bought.
How so?
> Elites the world over are losing in democracies because they presupposed, from afar, that they knew what their constituents wanted
Elites the world over are winning in democracies (take the US for example), which could feed into the hypothesis. Indeed, nonzero voters of these elites were easily bought.
Here’s another possible interpretation: our information environment makes people extremely vulnerable to actual bullshit in massive volume.
That is also true. People get angry and then misdirect it. But the anger is real, and it filters up through the political system when the valves aren't clogged. They aren't, not anywhere in the West. Voters across the West have essentially begun a wholesale replacement of their stable of elites. That is not what happens in an oligarchic system.
The person USAns just voted in is literally an oligarch, as is his co-president, and he has indicated that he will populate his cabinet and advisory board with still more oligarchs. His "inauguration" slush fund has already received hundreds of millions of dollars from other oligarchs to secure their place in the new oligarchy*
*: Pure or otherwise
America is tending towards an oligarchic system. (This is a history of weak democracies, historically, and a reason we were founded as a republic and not pure democracy.) That doesn't prove it currently is one. Trump's election is largely about replacing the technocratic and cultural elite with a commercial one.
Maybe that doesn't. But this study does:
> Princeton University study: Public opinion has “near-zero” impact on U.S. law.
> One thing that does have an influence? Money. While the opinions of the bottom 90% of income earners in America have a “statistically non-significant impact,” economic elites, business interests, and people who can afford lobbyists still carry major influence
Source: https://act.represent.us/sign/problempoll-fba
The study is from 2004. I'd say things have gotten a lot more "oligarchic" in the last 20 years, and seems like it might get even worse in the next few years
Hitler was elected, Orban was elected, Bukele was elected.
None of them emerged from oligarchic political systems.
I don't think that's what people are pointing out.
... or perhaps because you've misidentified the "elites."
Voters' interests are complex, and they can't be so easily bought.
No need to buy cattle you already own. You just herd them.
If the elites are constantly changing then the 'elites' being in power is about as threatening as the 'people' holding it.
Honestly I don't think there's a rivalry among equals in play. I think the previous "elites" slacked off on the job. What's happening now looks less like a transfer of power than a vacuum being filled.
Regardless, it is the height of absurdity to argue that the "elites" aren't in charge now. A New York billionaire teamed up with the world's wealthiest man and the country's most influential cable news network to buy the Presidency, and the rest are now lining up to pay tribute.
The other "elites," to the extent there are any, are short on ambition, short on cash, and short on media reach.
True. But this is how all depositions go. When that process is blocked is when the process stops being peaceful.
> it is the height of absurdity to argue that the "elites" aren't in charge now
Some elites are always going to be in charge. That's almost tautology. The point is there is no the elites who were in charge and are now.
> other "elites," to the extent there are any, are short on ambition, short on cash, and short on media reach
And/or. Plenty have some of those but not all, or at too stupid to know how to wield it. Point remains: we have an amorphous elite with contrasting interests who are constantly fighting because power is fractured among them.
Sure, but pro-Trump voters will tell you that they were striking a blow against the "elites." Apparently rule by elites is OK, though, as long as they believe the elites in question are on their side. It's only those other elites that are the problem.
Which goes back to my earlier point: why spend money buying votes the old-fashioned way, when a personality cult can actually be profitable?
Some other member from one of the two parties, who will continue to make decisions mostly for their rich donors?
> Princeton University study: Public opinion has “near-zero” impact on U.S. law.
> One thing that does have an influence? Money. While the opinions of the bottom 90% of income earners in America have a “statistically non-significant impact,” economic elites, business interests, and people who can afford lobbyists still carry major influence.
Re-run that within voting jurisdictions. What that study largely seems to reference is that local representation is, in part, a divide and conquer mechanism.
It won't be repaid by me, nor anybody in my generation (Millenial). So the world is kinda collectively assuming subsequent generations will repay. To your point, it's neither contrary-to nor aligned-with the will of the people, but seems like a massive point that people would say "i'm not responsible for"
The Fugitive Slave Act (1850) The Alien and Sedition Acts (1798) The Prohibition Act (1919) The Vietnam War Draft (1960s) The Troubled Asset Relief Program (2008)
Actually, I just read your update, you've changed from making a bold (and, in my view, wrong) statement about how government is not responsive to the will of the people, to a fairly boring technical point about how a representative democracy works. I have no idea if you're just doing a motte and bailey or if you were never trying to make a bold claim in the first place...
I'll just leave my piece here, in any case: I believe that the US system of government actually works really well, and in general we tend to get laws and regulations that are based on the broad consensus of a very diverse electorate. This is a good thing. In my opinion, when most people complain about how the government doesn't work for the people, what they actually don't like is that a lot of the country disagrees with them, and that disagreement is reflected in our government.
But, maybe I'm wrong and there's some other system we can come up with that will keep a vast and diverse nation hanging together prosperously for another 250 years. Shrug.
Gun Control Legislation (e.g., Background Checks, 2013)
After the Sandy Hook Elementary School shooting, polls showed overwhelming public support (over 80%) for universal background checks. Congress failed to pass significant gun control measures despite this broad consensus.
Net Neutrality Repeal (2017)
Public opinion polls showed strong bipartisan support for net neutrality regulations. Despite this, Congress and the FCC rolled back these protections, prioritizing telecom industry interests.
Affordable Care Act (ACA) Repeal Attempts (2017)
Repeated attempts by Congress to repeal the ACA (Obamacare) were made despite consistent public support for key provisions like protections for pre-existing conditions.
Stock Trading by Members of Congress
Polls show overwhelming public support (around 70-75%) for banning members of Congress from trading individual stocks due to conflict-of-interest concerns. Yet, no significant legislation has passed to address this issue.
Net Neutrality - maybe? My read on it is that it's just too wonky of any issue for most people to actually care that much about, and polling can't really tell us much about how the electorate would lean if they actually studied it - phrasing of the survey question can probably skew things strongly one way or the other. But, maybe that's just a cop-out.
ACA - doesn't this strengthen my argument? It's popular enough that even when the Republicans had a trifecta they still couldn't repeal it, despite running on "repeal and replace"... Maybe if they had actually had a replacement ready to go, they actually would have succeeded... but they couldn't reach consensus on a replacement, so it didn't happen.
Stock trading by members of Congress - the jury is still out on this one... when did this push start, during Biden's term? If (1) public opinion stays strongly in favor of it during Trump's current term but (2) we still don't see any legislation during the next presidential term... then I would call this a mark in your favor, but not until then.
Overall, I'm still not buying your argument that our government is unresponsive to the will of the people. It's certainly not a perfect reflection of the electorate, but generally when we build consensus, we get things done... it's just that consensus is really hard to come by these days.
Have a good one my friend, thank you for engaging, I think this stuff is really important. :)
But three days later they were for it before they were against it:
https://www.astrid-online.it/static/upload/protected/GALL/GA...
On the draft, that wasn't a new law. Selective Service was probably a 1940s law. A majority didn't think the war was a bad idea until 1968 and a majority supported Nixon pretty much to the end regardless of the reimagining that hippies were ever a majority.
https://time.com/archive/6875220/a-time-louis-harris-poll-th...
It is a wonderful thing that it is independent from the government, and history has shown, across nations, that political independence of central banks is necessary to control the money supply well. Political leaders are more interested in short-term issues and have repeatedly demonstrated an inability to responsibly manage money supply issues.
We have two massive private entities in control of the entire government: our two political parties.
see e.g. Nixon v. Warner Communications, Inc. (1978): recognizing the common law right of access to judicial records but allowed the court to deny access when interests such as privacy, national security, or fair trial rights outweigh the public's interest.