Obaid's+Page

= = =__Congressional Legislation to End Secrecy at the Fed__ = = = = Overview =

In light of the recent economic downturn, the U.S. government spent hundreds of billions of dollars in an effort to bail out big banks and financial institutions. The Fed, which is the central bank of the United States, was responsible for carrying out the economic policy reforms and bailouts. There has been some uproar recently in the halls of Congress over the fact that the Fed is shrouded in secrecy, and that it will not even tell anyone which financial institutions it has lent to. Many are especially infuriated because the scale of the recent activities of the Fed is way beyond anything it has ever done in the past. This is why many in Congress, most notably Congressman Ron Paul and Senator Bernie Sanders, have initiated a bill that will force the Fed to be more open about its activities, especially with regard to its involvements with economic recovery efforts after 2007, and will allow for an “audit” of the Fed, among other things.

Example 1:

**Mainstream Source 1:**
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Published: May 11, 2010
WASHINGTON — The Senate voted unanimously on Tuesday to require an audit of the [|Federal Reserve]’s emergency actions during and after the 2008 [|financial crisis] as part of broad legislation overhauling the nation’s [|financial regulatory system].

Harry Hamburg/Associated Press
Senator Bernard Sanders’ amendment mandated scrutiny of the Fed’s response. The amendment, proposed by Senator [|Bernard Sanders], independent of Vermont, would require the [|Government Accountability Office] to scrutinize some $2 trillion in emergency loans that the Fed provided to some of the nation’s biggest banks. The vote was 96 to 0. Mr. Sanders, a professed socialist, has long demanded greater transparency at the central bank, and his original plan could have subjected the Fed to continuing audits of some of its routine operations. But he agreed to scale it back in the face of opposition from the White House, the Fed, the [|Treasury] and some Senate colleagues. While the Senate provision would require an audit of the Fed’s emergency operations beginning on Dec. 1, 2007, the House approved tougher audit requirements late last year in its version of the financial regulatory legislation. Once the larger Senate bill is adopted, the provisions will have to be reconciled. Senator [|David Vitter], Republican of Louisiana, put forward an amendment that would have mirrored the stricter House language. But the Senate rejected it Tuesday, 62 to 37. Mr. Sanders and six Democrats joined 30 Republicans in favor. Later on Tuesday, the Senate voted by 63 to 36 to require the Treasury Department to study the prospect of ending the federal conservatorship of the government-sponsored mortgage giants, [|Fannie Mae] and [|Freddie Mac]. The Democrats put forward the amendment as an alternative to a proposal by Senator [|John McCain], Republican of Arizona, that sought to end the government’s involvement with Fannie Mae and Freddie Mac and potentially put them out of business within five years. Republicans denounced the proposed study as accomplishing nothing. The lack of provisions related to the mortgage giants in the broader bill has become a point of contention for the Republicans who say that Fannie Mae and Freddie Mac were at the heart of the collapse in the housing market that led to the financial crisis. They have used the debate to highlight how Fannie Mae and Freddie Mac continue to lose tens of billions of dollars at taxpayer expense. Fannie Mae on Monday requested an additional $8.4 billion in taxpayer assistance and Freddie Mac last week asked for an additional $10.6 billion. The federal government has already contributed $137.5 billion to the mortgage giants since taking control of them in August 2008. Meanwhile, Michael J. Williams, the chief executive of Fannie Mae, was paid $6.68 million in salary and bonuses for 2009, even as the institution lost more than $74 billion. The bonus money is being paid this year, including a $581,000 disbursement in March, according to regulatory filings. “This amendment that we’ll take up will end the taxpayer-backed conservatorship of Fannie Mae and Freddie Mac, by putting in place an orderly transition period and eventually requiring them to operate without government subsidies on a level playing field with their private-sector competitors,” Mr. McCain said at a news conference before his amendment was defeated. “We are not saying that Freddie and Fannie have to go out of business,” he said. “We are saying we want them to be a business that is on a level playing field with other private sector competitors.” Democrats, however, note that few private sector competitors are left, and that Fannie and Freddie now supply a vast majority of mortgage financing in the United States. The Senate on Tuesday also adopted an amendment sponsored by Senator [|Michael Bennet], Democrat of Colorado, requiring that more than $180 billion in bailout money repaid to the Treasury under the [|Troubled Asset Relief Program] be used to reduce the federal deficit rather than toward more bailouts or new spending. The majority leader, Senator [|Harry Reid] of Nevada, said on Tuesday that he wanted to finish work on the legislation this week. But Mr. Reid lacks the 60 votes needed to end debate, and the Republican leader, [|Mitch McConnell] of Kentucky, said that he thought the bill required two more weeks of work. “This is a very, very important bill, and there are many legitimate amendments,” Mr. McConnell said. Mr. Sanders said his amendment would bring long overdue scrutiny to the Fed. “At a time when the Federal Reserve has provided the largest taxpayer bailout in the history of the world, the largest financial institutions in this country, trillion-dollar institutions, the Sanders amendment makes it clear that the Fed can no longer operate in the kind of secrecy that it has operated in forever,” he said in a floor speech. Critics of the more aggressive audit provision approved by the House said that it could infringe on the Fed’s independence and interfere with its ability to set monetary policy. Mr. Sanders and other supporters rejected those assertions and said they were providing sufficient safeguards to protect the central bank’s integrity. The House bill, which was approved in December, included a proposal sponsored by one of the most conservative lawmakers, Representative [|Ron Paul], Republican of Texas, and one of the most liberal, Representative Alan Grayson, Democrat of Florida. Their proposal would allow audits by the Government Accountability Office of every item on the Fed’s balance sheet, and they said the Senate version would not go far enough. “While it is better than no audit at all, it guts the spirit of a truly meaningful audit of the most crucial transactions of the Fed,” Mr. Paul wrote on his Web site.


 * Comes across as balanced
 * Offers quotes and statements from both sides
 * Seeks to explain what the legislation will do and what it is intended for
 * Although it offers both sides, it mostly talks about why this bill is good and its history and not so much about why it could be bad for the Fed.
 * Focuses a lot on the Senate debate and votes.
 * Has quotes from many different people who are relevant to the story.

Citizens Media Source 1
The Huffington Post is an internet newspaper that "offers syndicated columnists, blogs and news stories with moderated comments."

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[|Sen. Bernie Sanders] Independent U.S. Senator from Vermont

Posted: May 7, 2010 03:32 PM
=[|We Must End Fed Secrecy]=

I hope that the Senate will vote on my amendment to end secrecy at the Federal Reserve. I hope that as early as Tuesday, through the efforts of incredibly strong progressive and conservative grass-roots organizations, we will win a historic victory for the American people. It's not going to be easy. It probably will require 60 votes for passage - a very high hurdle. That is why, in an important step forward, I reached agreement on Thursday with Chairman Dodd that absolutely keeps intact the key provisions we have been fighting for and hopefully will give us the additional votes that we need. Under my amendment, for the first time the American people will know exactly who received more than $2 trillion in zero or near zero interest loans from the Federal Reserve and the exact terms of this assistance. A year ago, I asked Federal Reserve Chairman Ben Bernanke that question. He said he wasn't going to tell the American people. If we pass this bill, he will have to tell us. For the first time, under this amendment, there would be a comprehensive top-to-bottom audit of the emergency actions that the Fed has taken since the financial crisis started. The amendment explicitly would require the Government Accountability Office (GAO) to investigate what many Americans believe were serious conflicts of interest involving the Fed and CEOs of the largest financial institutions in the country. For example, why was Goldman Sachs CEO Lloyd Blankfein at the New York Federal Reserve when the federal government decided to bailout AIG allowing Goldman to receive $13 billion? In introducing a modified amendment, I addressed concerns that I heard from both Democrats and Republicans who did not want Congress to be involved in the day-to-day monetary policy of the Fed. I share that concern. That has always been my position. I believed that I had made it abundantly clear in the original amendment. Now we have made it even clearer. Other changes in the amendment, which I do not consider significant, included setting a specific deadline - December 1, 2010 - for the Fed to make public the names of the financial institutions that received more than $2 trillion in what are now secret Fed loans. Also, we agreed - given that my interest was the recent, unprecedented activities of the Fed since 2007 - that the audit would cover the period since the economic crisis began and would be focused on the Fed's emergency provisions. I support the legislation passed by the House of Representatives under the leadership of Congressmen Ron Paul and Alan Grayson. Frankly, some provisions in the House legislation are stronger than the language we have in the Senate. But there also are provisions in my amendment which are stronger than theirs, including a mandate that the names of financial institutions that received Fed loans, and the precise terms of the loans, will be made public. My goal, as I conveyed to Congressmen Paul and Grayson when we talked on Friday, is to do everything that I can to pass this amendment in the Senate, and then to work with them for the strongest possible language in the final bill.

media type="youtube" key="-ov0QysYUeo" height="385" width="640"


 * Written by Senator Sanders, the chief proponent of the bill
 * Offers only reasons why this bill should pass
 * Doesn't mention any reasons against the bill
 * The video uses different pictures of banks, their logos, and officials to impress a negative image of the current situation
 * The video emphasizes the problems with the financial system of the US
 * Talks a lot about how this bill is beneficial to the average American
 * Uses strong words like "outrage" and "disgusting" to convey message
 * Closer to propaganda than actual reporting

**Mainstream Media Source 2**
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May 10, 2010
media type="custom" key="6137777"


 * It makes use of a lot of images, such as that of the Constitution, to make it seem patriotic
 * Uses a lot of pathos, as it mentions many prominent Senators and Congressmen
 * Decidedly one sided, has an extensive interview with Ron Paul. Doesn't show why some people oppose this bill
 * Uses strong clips and images of rioting to accentuate the economic disruption in Europe
 * Lots of ethos, involves emotions a lot, especially in the tone of voice and language used
 * Quite a bit of logos also. Makes a good case for supporting the legislation
 * Obviously not balanced, but it gets the intended point across quite well
 * Good reporting, but only on one side of the story

Citizen's Media Source 2:
The Daily Kos is a "Daily weblog with political analysis on US current events from a liberal perspective."

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by [|Joan McCarter]
[|Share this on Twitter - Greenspan Unwittingly Made the Case for Sanders' Fed Transparency Amendment]

Tue May 04, 2010 at 07:21:09 AM PDT
A key amendment that has been gaining traction in the Senate is Sanders' effort to give the GAO more power to audit certain operations of the Fed. On Friday, a very good argument for greater Fed transparency emerged: Alan Greenspan's [|successful suppression of housing-bubble dissent] in the Fed in 2004.

As top Federal Reserve officials debated whether there was a housing bubble and what to do about it, then-Chairman Alan Greenspan argued that the dissent should be kept secret so that the Fed wouldn't lose control of the debate to people less well-informed than themselves.... At the same meeting, a Federal Reserve bank president from Atlanta, Jack Guynn, warned that "a number of folks are expressing growing concern about potential overbuilding and worrisome speculation in the real estate markets, especially in Florida. Entire condo projects and upscale residential lots are being pre-sold before any construction, with buyers freely admitting that they have no intention of occupying the units or building on the land but rather are counting on 'flipping' the properties--selling them quickly at higher prices." Had Guynn's warning been heeded and the housing market cooled, the financial collapse of 2008 could have been avoided. But his comment was kept secret until Friday, when the central bank [|released the transcripts] of Federal Open Market Committee meetings for 2004 and CalculatedRisk [|spotted it]. The transcripts for 2005 to the present are still secret.... Other than the passing mention of speculation, the March minutes imply that the meeting participants had a rosy outlook on the housing bubble. "Activity in the housing market moderated in January and February from its elevated pace in the fourth quarter. Single-family housing starts and permits stepped down, although both measures remained above their average levels of the first three quarters of 2003," the minutes read. "Overall, expenditures were supported by sizable gains in real disposable personal income and increases in household wealth owing to rising home and equity prices. ... Committee members noted that activity in the housing sector, while still quite elevated, had fallen back from its extraordinary pace of late last year."

When the Fed released minutes of this meeting back in 2004, Guynn's warnings were watered down. The rest is, unfortunately, disastrous history. The argument for greater Fed transparency is certainly bolstered by this, and it could blunt the opposition of the administration and the Fed to Sanders' amendment. A Fed audit provision by Alan Grayson passed in the House version of the bill.


 * More of a persuasive piece than a news article
 * Focuses on a potential benefit that would come of passing this legislation
 * One sided
 * Almost entirely logos- talks of an example in the past and relates it to the current debate in Congress
 * Uses actions of the opposition to make its case
 * A good piece in that it relates a current event to the past and an underlying problem

Comparative Analysis The purpose of this page is to explore the differences in the manner of reporting between different news media outlets in light of the recent congressional movement to limit secrecy at the Fed. Undoubtedly, there are many differences between the different outlets, and between mainstream and citizen media sources. However, there are also a lot of similarities, and with this story, quite a few oddities as well.

The New York Times article is perhaps the best news article on the page. It starts out talking about the Senate vote on the bill, and then goes on to describe what the bill actually consists of and what it entails. It gives the views of some of the bill’s creators and biggest supporters, and explains some of the debate that had taken place about the bill. It explains the actions of the Fed in recent years, especially in relation to the bailouts of major financial institutions. At the very end, it offers a little snippet about why some oppose this bill, but then it allows supporters of the bill to refute that argument and end the article. The style of writing is definitely expository, as it states facts and figures rather rhetoric. While it spends most of the time talking about different aspects of the bill and positive reactions to it, it at least mentions the opposition in a fair manner, which is more than the other sources. This article attempts to explain the situation (the vote in the Senate) and tie it in to the larger underlying context that made the bill relevant, and offers different voices with differing views about the bill. So overall, the New York Times has done a good job of reporting on this issue.

The article from the Huffington Post is quite interesting and says a lot about the nature of citizen media. First off, the article itself is written by Senator Sanders, who wrote the bill and was its main proponent. That in itself speaks volumes, when an influential Senator can write a news article. In mainstream media, politicians are usually interviewed, and sometimes they write opinion or editorial pieces, but in citizen media, it is easy for anyone to write articles. This article is a great example of politicians using the power of the web and alternative media sources to spread their views. However, Senator Sanders didn’t just stop at writing an article- at the bottom of his article, he attached a YouTube video of himself speaking about the problems of the financial system and what he aims to do with his bill. There are quite a few savvy things about the video. For one, it is a YouTube video, which makes it extremely accessible, easy to embed, easy to search, easy to load, and easy to view. Second, it is edited and put together quite well. Powerful images and words are strung together masterfully to elicit a desired reaction in the viewer. Apart from the way technology is used, the actual message in the article and the video isn’t so bad either. Sanders does a good job of explaining a problem and his solution, and of coming across as a concerned politician who wants to do something positive through this bill. This is a good persuasive piece.

The Fox News video is one of the more entertaining pieces, partly because it was from Fox News and the personality hosting the show was entertaining. But that aside, it obviously wasn’t a fair and balanced story. Only Ron Paul was interviewed, and his views were celebrated and explained. So while this is bad in that only one side gets all the attention and support, Fox News did a pretty good job in this piece of explaining the views of supporters of the bill. It systematically ties in the bill in Congress to the recent economic downturn in the United States and the precarious economic situation in Europe and the riots in Greece. It explores some of the flaws in the system and some failures on the part of leadership, and makes the case for this bill to pass in its strongest form. The video makes great use of symbols, images, and footage to accentuate the points made by the talking heads. So while not balanced, it is a good video for the supporting side.

The final piece, an article from the Daily Kos, takes an interesting approach. It is a short article that makes the case for the bill by harping on a separate event and relating that to the present. It states how more transparency at the Fed could help prevent future economic disasters. This is definitely a blog post on a political blog and not a news piece. However, it illustrates the power of citizen media. In this case, the author was able to draw attention to an aspect of the debate that has often been overlooked in other sources. Citizen media sources allow alternative voices to be heard and other points to be made, and this blog post on the Daily Kos is a prime example of that happening.

One of the oddities that was hard to ignore while searching for articles on this subject was that most mainstream news sources didn’t cover this bill much. There were slight references in other stories and small explanations on their blogs, but most sources like ABC, MSNBC, and CNN did not cover this story, at least back when this page was being produced. The New York Times covered it, but not as extensively as it covers other important stories. Fox News seemed to be the only mainstream source that pounced on the story. However, there was no shortage of stories on the subject on citizen media sources. So why was this story largely ignored? Perhaps the editors at mainstream sources didn’t see auditing the Fed as being important enough, and supporters of the bill found other sources to be better suited for propagating the story. Perhaps there wasn’t enough economic incentive for mainstream sources to cover this story, so supporters had to turn to other sources that didn’t have the same problem. Whatever the reason, there was a stark contrast between the sources that reported the story and those that didn’t.

Another interesting aspect of the story was that most of the pieces that covered this story largely presented one side of it, and became more persuasive than expository. While this is a problem if the standard that media sources are held to is for them to be unbiased and fair, this style of reporting is more in line with the hopes of the founding fathers of this country. They envisioned a country where citizens subscribed to different viewpoints and got their information from their respective sources, and then discussed the issues with each other. This would lead to rational discourse between citizens, and this, they felt, would keep democracy alive. In today’s media world, the standard has changed drastically, but for this story anyways, each source seemed to offer more reasons to support the bill than to oppose it. Interestingly enough, there was very little if any coverage given to the opposition of this bill.

In conclusion, there are many differences in the way news is reported in our news media system, and there are pros and cons with different sources and source types. As this page shows, there are various degrees of differences, and ultimately, it is up to the consumer to look at different sources with a critical eye to get the best and widest range of views on any given issue. The future of our democratic political system depends on it.