Speaking of Banksters

A former Federal Reserve employee responsible for managing the agency’s quantitative easing program has written an op-ed apologizing for what he called “the greatest backdoor Wall Street bailout of all time.”

Writing in the Wall Street Journal, Andrew Huszar detailed his concerns about the Fed’s massive bond-buying measures. He argued that while the Reserve initially claimed the program would lower borrowing rates for average citizens, the trillion-dollar initiative primarily ended up lining the pockets of Wall Street executives.

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And while he was “managing” the program, did he not think that would be the result?

“Despite the Fed's rhetoric, my program wasn't helping to make credit any more accessible for the average American,” Huszar wrote. “The banks were only issuing fewer and fewer loans. More insidiously, whatever credit they were extending wasn't getting much cheaper. QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash.”

What’s more, Huszar claimed that several Federal Reserve managers expressed apprehension over the effects of quantitative easing (QE) only to find their concerns ignored.

“Our warnings fell on deaf ears,” he wrote. “In the past, Fed leaders—even if they ultimately erred—would have worried obsessively about the costs versus the benefits of any major initiative. Now the only obsession seemed to be with the newest survey of financial-market expectations or the latest in-person feedback from Wall Street's leading bankers and hedge-fund managers.”

Oh. So, he did know. But he chose to keep his lucrative job and write about it after he retired, like so many who come to us after the horse has left the barn.

And don’t expect anything to change.

But, let’s have a look at something that is helping citizens, not banksters:

The Rolling Jubilee project has announced that it has helped eliminate an additional $13 million of Americans’ personal debt, bringing its total to nearly $15 million in the past year. The project is run by Occupy Wall Street activists.

According to a group press release, the $14.7 million in eliminated debt came from three different purchases. The most recent buy was announced this week. The group bought $13.5 million of medical debt held by 2,693 people across 45 states and Puerto Rico.

[...]

By sweeping up debt at cheap prices in the “secondary debt market,” the project has freed $14,734,569.87 of personal debt to date, while only spending $400,000.

“No one should have to go into debt or bankruptcy because they get sick,” said Laura Hanna, an organizer for the group.

"We thought that the ratio would be about 20 to 1," Andrew Ross, a member of Strike Debt, told the Guardian. He said the group first aimed to raise $50,000, or to eliminate $1 million in debt at the 20 to 1 ratio.

"In fact we've been able to buy debt a lot more cheaply than that,” Ross said.

[...]

"We're under no illusions that $15 million is just a tiny drop in the secondary debt market. It doesn't make a dent in the amount of debt.

"Our purpose in doing this, aside from helping some people along the way – there's certainly many, many people who are very thankful that their debts are abolished – our primary purpose was to spread information about the workings of this secondary debt market."

[...]

“So when you get called up by the debt collector, and you're being asked to pay the full amount of your debt, you now know that the debt collector has bought your debt very, very cheaply. As cheaply as we bought it. And that gives you moral ammunition to have a different conversation with the debt collector."

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Rolling Jubilee
Strike Debt project