Bloomberg.com reported last week that the Federal Reserve had doled out $7.77 trillion as of March 2009 to banks with the goal of stabilizing the financial system. That number makes the Treasury Department's $700 billion bailout through the Troubled Asset Relief Program (TARP) look like an ant standing next to an elephant.
$7.7 trillion is an enormous amount of money, "more than half the value of everything produced in the U.S. that year," according to bloomberg.com. The troubling thing isn't necessarily the size of the number, but that it's only coming to light now (more than 2-and-a-half years later), because Bloomberg LP won a court case against the Fed and a group of the biggest banks called Clearing House Association LLC forcing the disclosure.
Neither the Fed nor the banks wanted the press, the public, or Congress to know the details of how the Fed (an independent agency of the federal governmental) was going about trying to fix the financial system.
That's messed up, because the public has a vested interest in knowing how the government ("by the people, for the people," according to President Lincoln) is trying to stabilize a financial system that affects their lives. On top of that, Congress should certainly know the details, because they are actively creating legislation with the goal of fixing financial problems, and when they are left in the dark it makes an already enormously difficult task even more difficult.
Thankfully, Bloomberg was able to win its court case and obtain the information under the Freedom of Information Act. It's a perfect example of the press doing its job and informing the public. It also illuminates the expenditures so that Congress knows what the Federal Reserve has been up to.
--Jens
Photo taken from this photostream and used with permission of a Creative Commons license.
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