But to be fair, who really needs a democratic system anyway? Barney Frank just doesn't understand that this is the new Republican model that does away with pesky democratic controls and streamlines the system.
Setting up such an entity also would give lawmakers a chance to determine the parameters of future bailouts, as opposed to leaving the decision in Bernanke's hands. While most lawmakers said they trust Bernanke's judgment, Frank said he was troubled to learn in the meeting Tuesday that Bernanke has legal authority to use the central bank's reserves, which total $888 billion, to make loans to any entity under any terms he deems economically justified.It's probably OK as well that neither Bernanke or Paulson could address the financial impact on the federal budget or to taxpayers. Let's just leave them be and let it all work itself out. What could go wrong and why do we need democracy interfering with this?
"No one in this democracy -- unelected -- should have $800 billion to dispense as he sees fit," Frank said. "It may be that there is so much bad debt out there clogging our system that we may have to have some intervention. But it shouldn't be the unilateral decision of the chairman of the Federal Reserve with the backing of the secretary of the Treasury."
