Matt Taibbi at Rolling Stone may not be schooled in the Austrian tradition of economics but he has a better understanding of the Fed than most of the American political left. Taibbi consistently brings to light the surreptitious, anti-capitalistic exploits of the seemingly omnipotent Ben Bernanke and his Federal Reserve. The shroud under which the Fed operates, free from the prying eyes of both government and citizens lends verisimilitude to its legitimacy. When the obfuscating shroud is lifted, granting even the slightest peek into what Bernanke is really doing with the trillions he is printing, the unacceptable reality of its disastrous use of unchecked monopoly power is revealed.
The most recent Fed atrocity to be revealed is the $26 billion “loan” Qaddafi received at interest rates that Warren Buffett cold only dream of. Fortunately, Matt Taibbi is bringing it to the attention of the left with his recent Rolling Stone blog post. Writes Taibbi,
Barack Obama recently issued an executive order imposing a wave of sanctions against Libya, not only freezing Libyan assets, but barring Americans from having business dealings with Libyan banks.
So raise your hand if you knew that the United States has been extending billions of dollars in aid to Qaddafi and to the Central Bank of Libya, through a Libyan-owned subsidiary bank operating out of Bahrain. And raise your hand if you knew that, just a week or so after Obama’s executive order, the U.S. Treasury Department quietly issuedan order exempting this and other Libyan-owned banks to continue operating without sanction.
I came across the curious case of the Arab Banking Corporation, better known as ABC, while researching a story about the results of the audit of the Federal Reserve. That story, which will be coming out in Rolling Stone in two weeks, will examine in detail some of the many lunacies uncovered by Senate investigators amid the recently-released list of bailout and emergency aid recipients – a list that includes many extremely shocking names, from foreign industrial competitors to hedge funds in tax-haven nations to various Wall Street figures of note (and some of their relatives). You will want to see this amazing list when it comes out, so please make sure to check the newsstands in two weeks’ time.
This list became public as a result of an amendment added to the Dodd-Frank financial reform bill that was sponsored by Senator Bernie Sanders of Vermont. The amendment forced the Federal Reserve to open its books for the first time and make public the names of those individuals and corporations who received emergency loans and bailout monies during the roughly two year period between the crash of 2008 and the passage of the Dodd-Frank bill.
As Bernie’s staff was going through this list, it found, among other things, some $26 billion in extremely cheap loans (as low as one quarter of one percent!) extended to this ABC bank over a period of years, beginning in December of 2007 and continuing through as recently as February of 2010. The senator sent a letter to Ben Bernanke over the winter demanding more information about this loan (among others) but the response he got was completely unhelpful.