During the Democrat debate in Flint, Michigan on Sunday Bernie Sanders went after Hillary Clinton and her “friends” on Wall Street.
Sanders said the Wall Street bailout saved Clinton’s associates on Wall Street and in the process “destroyed this economy,” a charge that prompted Clinton to interrupt, only to be cut short by Sanders and the moderator, Anderson Cooper.
“Let me tell my story, you tell yours,” Sanders said. “Your story is voting for every disastrous trade amendment and voting for corporate America.”
In addition to delivering lucrative Goldman Sachs speeches, Hillary Clinton has received financial support for her campaign from Citigroup, JPMorgan, Morgan Stanley and Goldman Sachs, making her undeniably the Wall Street banker candidate.
Sanders has based his campaign on reforming Wall Street and taxing America’s billionaires and the debate gave him ample opportunity to amplify his message.
The Sanders plan, however, has a serious flaw—his support for the Federal Reserve.
“Reforming” Wall Street and Fed Destined for Failure
In December Sanders took to the editorial page of The New York Times and said in order to “rein in Wall Street, we should begin by reforming the Federal Reserve.”
“Unfortunately, an institution that was created to serve all Americans has been hijacked by the very bankers it regulates,” he argued.
The Fed, however, was not “created to serve all Americans,” but rather to serve the interests of the financial elite.
The legislation resulting in the establishment of the Federal Reserve in 1913 was crafted by banker Paul Warburg after members of the financial elite came together at the Jekyl Island Hunt Club on Jekyl Island, Georgia in 1910. In addition to the maternal grandfather of Nelson Rockefeller, then Senator Nelson Aldrich, and the Assistant Secretary of the Treasury, A. Piatt Andrew, a clique of self-serving bankers attended the meeting, including the president of the National City Bank of New York, the president of Morgan’s First National Bank of New York, and the German Paul Moritz Warburg, a partner of the New York banking house of Kuhn, Loeb Co.
The Federal Reserve Act signed by President Woodrow Wilson allowed the Federal Reserve to create money out of thin air and saddle the nation with untenable debt.
“This Act establishes the most gigantic trust on earth,” remarked Congressman Charles Lindbergh after the legislation was pushed through Congress. “When the President signs this Act, the invisible government by the money power, proven to exist by the Money Trust Investigation, will be legalized…. The new law will create inflation whenever the trust wants inflation…. From now on, depression will be scientifically created.”
In 1913 the Pujo Committee unanimously concluded that a small cabal of financiers had consolidated control over banks and industries through the abuse of the public trust.
“We define a money trust as an established identity and community of interest between a few leaders of finance, which has been created and is held together through stock-holding, interlocking directorates, and other forms of domination over banks, trust companies, railroads, public service and industrial corporations, and which has resulted in vast and growing concentration and control of money and credits in the hands of a few men,” said Attorney Samuel Untermyer who headed the investigation.
As Lindbergh noted, the Federal Reserve has since specialized in creating economic depressions and recessions.
The so-called Great Depression beginning in 1929 and lasting a decade—often characterized as the greatest crisis in American history behind the Civil War—was engineered by the Fed. This was admitted by the chairman of the Federal Reserve when he told a conference to honor Milton Friedman’s 90th birthday in 2008 his organization was responsible for the crash. “You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”
Considering the fact the Fed creates disastrous financial bubbles, inflates the money supply and engages in monetary manipulation benefiting a tiny financial elite, it is remarkable that Bernie Sanders would declare it was originally established to benefit the American people and only tweaking is required to set things straight.
“Instead of trying to ‘fix’ the Federal Reserve, Congress should start restoring a free-market monetary system. The first step is to pass the Audit the Fed legislation so the people can finally learn the full truth about the Fed. Congress should also pass legislation ensuring individuals can use alternative currencies free of government harassment,” Ron Paul wrote last August.
Sanders: No Backbone to Take On the Financial Elite
Sanders demonstrated he is not serious about reforming the Federal Reserve. Although he introduced an amendment to the so-called Financial Reform Bill after the economic crisis (the legislation in fact expanded the power of the banks), he later backed down under pressure by the Federal Reserve and the Obama administration.
“Bernie Sanders has sold out and sided with [Sen.] Chris Dodd to gut Audit the Fed in the Senate. His ‘compromise’ is what the administration and banking interests want,” Paul wrote on Facebook after the betrayal.
A later bill to audit the Fed introduced by Ron Paul’s son in the Senate was similarly destroyed by Democrats, although Sanders voted for it.
Ron Paul noted that supposed crusaders from the working class, including Democrat Sen. Elizabeth Warren of Massachusetts, voted against auditing the Federal Reserve and “voted with the bankers.” The reluctance to hold the Fed to account was not important enough for faux tea party Republican Ted Cruz to bother showing up for a vote on the latest bill. Cruz is a beneficiary of a Goldman Sachs loan and his wife is a former member of the Council on Foreign Relations and is an investment manager at Goldman Sachs.
Sanders claims he will reform the Federal Reserve and take down the Wall Street bankers. Actions, however, speak louder than words. His betrayal of the original Audit the Fed bill and his inability to stand up to Obama and the financial elite provide a preview of how his administration would handle the bankers if, indeed, he becomes president which is, at best, a long shot.