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TIL that „The Federal Reserve […] is an institution that is mostly privately owned by banks“ Maybe my view is too European on that, but are Americans aware the

TIL that „The Federal Reserve […] is an institution that is mostly privately owned by banks“ Maybe my view is too European on that, but are Americans aware their federal money supervision system is run by banks and how can they possibly be okay with that?

drewvolpe 5y ago
It's owned by banks but run by government appointees. Most Americans who watch the news and follow finance understand it's a public-private hybrid structure. As Lyn notes, this isn't unusual. Many national banks are not owned by the government, including Swiss National Bank.
Ancapistani 5y ago
> Maybe my view is too European on that, but are Americans aware their federal money supervision system is run by banks [...] Honestly, most Americans aren't even aware that monetary policy is a "thing". > and how can they possibly be okay with that? I'd argue that we aren't. The US Constitution explicitly gives Congress the power to "coin Money". The current reading of that phrase is that it only applies to metallic coins, not paper money. Congress then set up the legal structure around the Federal Reserve Bank system - and it's more complicated than "privately owned banks" in practice, due to the blurring of the lines between "public" and "private", and the prescribed structure of the Fed that is at least partially under direct Congressional oversight. I'll also point out that the US has had multiple monetary systems since its inception, and the Federal Reserve System has only existed for about a century.
- nverno 5y ago
  > I'd argue that we aren't It's been a hot-button issue since it was created. If it's characterized as a system run by a bunch of bankers with greedy fingers on the tap, it sounds terrible- if it's a system to stabilize the economy, or any number of its other arguably beneficial purposes, it mightn't sound so bad. All of this things can be true, but without deep knowledge of the system (does anyone really understand all of the interactions?), it's hard to weigh the tradeoffs and so easy to jump to conclusions. I appreciate the desire for the relative simplicity of things like the gold standard. Just reading this article has made me reconsider my opinions on the matter (I was pretty certain QE was a primary mover driver of wealth centralization going in). My intuition tells me there is a lot of misleading correlation here, given how interlinked all these systems are.
kardamon 5y ago
No one knows until they actually investigate it. Calling it the "Federal Reserve" implies that it's part of the government, sort of like the "US Chamber of Commerce". Allowing a private entity to be in charge of our currency (and collect interest) is absurd.

drewvolpe 5y ago

It's owned by banks but run by government appointees. Most Americans who watch the news and follow finance understand it's a public-private hybrid structure. As Lyn notes, this isn't unusual. Many national banks are not owned by the government, including Swiss National Bank.

Ancapistani 5y ago

> Maybe my view is too European on that, but are Americans aware their federal money supervision system is run by banks [...] Honestly, most Americans aren't even aware that monetary policy is a "thing". > and how can they possibly be okay with that? I'd argue that we aren't. The US Constitution explicitly gives Congress the power to "coin Money". The current reading of that phrase is that it only applies to metallic coins, not paper money. Congress then set up the legal structure around the Federal Reserve Bank system - and it's more complicated than "privately owned banks" in practice, due to the blurring of the lines between "public" and "private", and the prescribed structure of the Fed that is at least partially under direct Congressional oversight. I'll also point out that the US has had multiple monetary systems since its inception, and the Federal Reserve System has only existed for about a century.

nverno 5y ago
> I'd argue that we aren't It's been a hot-button issue since it was created. If it's characterized as a system run by a bunch of bankers with greedy fingers on the tap, it sounds terrible- if it's a system to stabilize the economy, or any number of its other arguably beneficial purposes, it mightn't sound so bad. All of this things can be true, but without deep knowledge of the system (does anyone really understand all of the interactions?), it's hard to weigh the tradeoffs and so easy to jump to conclusions. I appreciate the desire for the relative simplicity of things like the gold standard. Just reading this article has made me reconsider my opinions on the matter (I was pretty certain QE was a primary mover driver of wealth centralization going in). My intuition tells me there is a lot of misleading correlation here, given how interlinked all these systems are.

kardamon 5y ago

No one knows until they actually investigate it. Calling it the "Federal Reserve" implies that it's part of the government, sort of like the "US Chamber of Commerce". Allowing a private entity to be in charge of our currency (and collect interest) is absurd.