naked capitalism

We’ve commented repeatedly and disapproving of the increasing operation of the Fed as an off balance sheet vehicle of the Treasury, in violation of normal budgetary processes (as have some former central bankers, most notably Willem Buiter).

Even thought Congress has been attempting to beat back the expansion of the Fed’s authority that Team Obama has backed, land grabs are still cropping up via artfully drafted amendments. The latest was described as an “outrage” by Tom Ferguson. This piece of artwork comes from Brad Miller of North Carolina:

Would provide that any designated financial holding company that is subject to heightened prudential regulation shall have the same access to the Federal Reserve Discount Window as if it were a Federal Reserve member bank.

As William Greider, author of Secrets of the Temple, noted via e-mail:

This amendment ratifies the corporate state — the charmed circle of financial/industrial corporations that will have a permanent line of credit from Washington. It authorizes the Federal Reserve to do whatever it thinks necessary in the next crisis. All the FED must do is designate the eligible firms, presumably a confidential matter.

Does the resolution authority section of the bill have any language that appears to pre-authorize funds for a next “TARP” at Treasury? If not, this amendment gives the Federal Reserve all the authority it needs.