Slams Federal Reserve

Bernie Sanders slams Federal Reserve in NYT op-ed

By Nick Gass

Bernie Sanders blasted the Federal Reserve in an op-ed published Wednesday by The New York Times, calling for "fundamental change" as a start.

In his latest comments to criticize the central banking authority as a puppet of the industry it purports to regulate, the independent Vermont senator and Democratic presidential candidate took aim at the Fed's long-anticipated decision to raise interest rates on Dec. 16 for the first time in nearly a decade.

"The recent decision by the Fed to raise interest rates is the latest example of the rigged economic system. Big bankers and their supporters in Congress have been telling us for years that runaway inflation is just around the corner. They have been dead wrong each time," Sanders wrote. "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."

Writing that the Fed should not raise interest rates until unemployment rates are lower than 4 percent, Sanders suggested that the increase of interest rates should be done "only as a last resort — not to fight phantom inflation."

In terms of what he would do as president, Sanders said that the president should nominate board members and the Senate should confirm them.

"Banking industry executives must no longer be allowed to serve on the Fed’s boards and to handpick its members and staff," he wrote. "Board positions should instead include representatives from all walks of life — including labor, consumers, homeowners, urban residents, farmers and small businesses."

Sanders also called upon financial institutions to provide affordable loans to small businesses and consumers "that create good jobs" by prohibiting commercial banks from "gambling with the bank deposits of the American people," as well as pushing the Fed to "stop providing incentives for banks to keep money out of the economy" and requiring large banks 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."

Sanders, as he has mentioned frequently during the campaign, called upon the reinstatement of the Depression-era he Glass-Steagall Act, as well as opening up meetings of the Federal Open Market Committee by releasing "full and unredacted" transcripts within six months, not five years.

"The sad reality is that the Federal Reserve doesn’t regulate Wall Street; Wall Street regulates the Fed," he wrote. "It’s time to make banking work for the productive economy and for all Americans, not just a handful of wealthy speculators. And it begins by making the Federal Reserve a more democratic institution, one that is responsive to the needs of ordinary Americans rather than the billionaires on Wall Street."