The $3.3 trillion cover-up

By Stephen Millies

Just one day after 2 million people were cut off from extended unemployment benefits, the Federal Reserve Bank was finally forced on Dec. 1 to reveal who had received $3.3 trillion from its “emergency lending” programs.

Not a single penny of this “emergency lending” has gone to the unemployed — even though $3.3 trillion is enough to lend $10,645 to every person in the United States. No one facing eviction or foreclosure was bailed out.

Instead, this money was lent to the biggest banks in the world. That’s capitalism for you.

Citibank reached into the Federal Reserve’s cookie jar at least 174 times. (New York Times, Dec. 2) Citibank deserved nothing. This $2 trillion octopus has been draining Latin America of its wealth for over a century. Mexico had to pay $1 billion in interest every month to foreign banks during the late 1980s.

Barclays Bank and Barclays Capital got 188 loans totaling $829 billion. (See who got what at graphicsweb.wsj.com/php/Federal-Loan-Data-Disclosure.html.)

According to “Capitalism and Slavery” by Eric Williams — the first prime minister of independent Trinidad and Tobago — Barclays was jumpstarted by the slave trade. Barclays ought to be paying reparations, not collecting easy loans with interest rates as low as one-tenth of a percentage point.

From the day it was set up by slave masters and merchants, the U.S. government has been giving handouts to the wealthy. Chicago’s Continental Illinois Bank was given a $4.5 billion transfusion in 1984.

But when Harlem’s Freedom National Bank was failing in 1990, Federal Reserve Chair Alan Greenspan didn’t lift a finger to save it. Jackie Robinson, who broke the color line in baseball, had helped establish Freedom National in 1964. A mere $6 million could have rescued it, but Jackie Robinson’s bank was forced to close on Nov. 9, 1990.

Workers need a new WPA

Current Federal Reserve Chair Ben Bernanke only disclosed these 21,000 transactions on Dec. 1 because of a law sponsored by Vermont Sen. Bernie Sanders.

Why had the Fed kept these trillions a secret?

Every cent of this loot was produced by the working class. Much of it had been stolen from super-exploited workers in Africa, Asia and Latin America.

Bernanke and other capitalist economists claim the Federal Reserve’s giveaway program “prevented another Great Depression.”

Well, for the 30 million people who still don’t have a job — or who can only get part-time work but need full-time — it’s already a “Great Depression.”

According to the Bureau of Labor Statistics, 46.5 percent of Black teenagers were jobless in November. The real figure was far higher.

The vast sums of money thrown around by the Federal Reserve shows it’s possible to establish a massive jobs program, like the Works Progress Administration in the 1930s.

The WPA employed 8 million people. As a percentage of the country’s population at the time, that’s equal to hiring 19 million people today.

President Franklin Roosevelt only started the WPA because there was an upsurge of the working class. This U.S. jobs program was established against the political backdrop of the five-year economic plans begun in the Soviet Union that had eliminated unemployment by 1930.

Investigate the Fed

The Federal Reserve’s bail-out-the-rich program remains murky and complex. Initials like PDCF, TAF, TSLF, AMLF and TALF are used to denote the various schemes. For poor and working people, all these programs are spelled RIP-OFF, STEAL or ROBBERY.

The entire record of the Federal Reserve during this crisis is outrageous. Speculators who run hedge funds got $71 billion. Some investors made profits as high as 48 percent. (Wall Street Journal, Dec. 2)

Yet there isn’t any money for Francisco Felix, a 32-year-old father of four, to get a liver transplant. The state of Arizona, which passed the racist immigration law SB 1070, now refuses to pay for organ transplants, condemning Felix and other poor people to slow and painful deaths. Even though it’s been economically blockaded by the U.S. for 50 years, socialist Cuba provides free medical care for everyone.

In 2008 General Electric got a $16.1 billion loan, while $3 billion was bestowed on JPMorgan Chase. The rub was that GE CEO Jeffery Immelt and JPMorgan CEO Jamie Dimon were on the nine-member board of the Federal Reserve Bank of New York. (New York Times, Dec. 5)

That’s a no-no, even according to the capitalists’ own laws. Don’t bet on Congress investigating this scandal. It’s too busy witch-hunting Charles Rangel, Maxine Waters and other Black members of Congress.

Different descriptions have been given of the amounts provided by the Fed. The Wall Street Journal mentions “$3.3 trillion in loans made to financial firms, companies and foreign central banks.” (Dec. 1)

But according to the New York Times, “the Fed extended a cumulative total of nearly $9 trillion in short-term loans to 18 financial institutions.” (Dec. 2) Morgan Stanley got a one-night loan of $61 billion.

Poor and working people need short-term loans, too. Payday lenders who offer two-week loans charge at least 15 percent interest. That’s a minimum annual rate of 390 percent. This kind of loan sharking has been made illegal in Maryland, New Jersey, New York, North Carolina, Pennsylvania and seven other states. But it goes on full-steam in the rest of the country.

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