American Enterprise Institute: a pack of hypocrites.

The conspiratorially named AEI project, the Shadow Financial Regulatory Committee, wants to unload the big banker’s toxic securities onto the US taxpayer.

There is, however, another option that the Shadow Committee recommends be considered. Freddie and Fannie have been placed in conservatorship and the Treasury has confirmed that their debt is now guaranteed by the U.S. Government. This means that their debt is essentially identical to Treasury debt. The Treasury could simply issue Treasury debt to Freddie and Fannie with the offsetting accounting transaction being an IOU to the U.S. Treasury. Freddie and Fannie could then swap the acquired Treasury debt for MBS held by the Federal Reserve. This transaction would have several desirable features. It would place housing debt on the books of Freddie and Fannie where it belongs and remove the Fed from financing U.S. housing policy, which is appropriately a fiscal policy and not a monetary policy function. This would also help to re-establish Federal Reserve independence from the Treasury and fiscal policy. Finally, it would free the Fed to device [sic] strategies to reduce its balance sheet by engaging in more traditional asset sales in the much deeper Treasury market where the pricing impacts would be smaller and would accommodate a more rapid reduction in excess reserves.

“Several desirable features”?!?!

• It would place housing debt on the books of Freddie and Fannie where it belongs. But the Fed took over the debt in the first place! If it rightly belonged with the Big MACs, the Fed should have left it there to begin with.
• [It would] remove the Fed from financing U.S. housing policy, which is appropriately a fiscal policy and not a monetary policy function. That’s a lie. For fifty years, the Fed has used interest rates to manipulate the debt market for real property. It’s the main mechanism used by the Fed to regulate the quantity of M3. It’s notable that the Treasury and the Fed stopped reporting on M3 in 2005.
• This [transfer of debt to the Big MACs] would also help to re-establish Federal Reserve independence from the Treasury and fiscal policy. True. However, Fed independence is a very bad thing. ‘Independent’ means independent of control by the citizenry. Fed independence is unconstitutional. The Congress cannot delegate the power to coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures. Monetary regulation is expressly put under control of the People. An independent Fed is a criminal enterprise.

The Fed is not a free-market institution. In free markets some businesses fail, and then entrepreneurs acquire the assets in an orderly bankruptcy, and then the process of creative destruction creates jobs, wealth, and freedom. That’s not what the Fed promotes. Now you know that’s not what AEI promotes.

AEI bills itself as a free-market organization. Now you know. AEI are liars and crony capitalists.

Everyone in the Fed, the heads of the large banks, everyone in Goldman Sachs, all of the Fed member banks, and most of the Treasury department – they’re hyenas feeding on the citizenry. They have stolen more money than any organized mafia in human history. The country is in thrall to a criminal gang of international bankers.

The bankers have stolen quadrillions. They are dispossessing the citizenry. They will destroy what’s left of individual economic freedom in this country.

I ask you, in grave tones, what must be done?

Related: International Monetary Fund socializes losses and privatizes profits. Neo-feudalism.