UPDATED: 10-01-09 Proof of the malignacy that may exist in the New York Federal Reserve?

The Hill.com is reporting ...

"AFL-CIO, Dems push new Wall Street tax"

"The nation’s largest labor union and some allied Democrats are pushing a new tax that would hit big investment firms such as Goldman Sachs reaping billions of dollars in profits while the rest of the economy sputters."

"The AFL-CIO, one of the Democratic Party’s most powerful allies, would like to assess a small tax — about a tenth of a percent — on every stock transaction."

“'It would have two benefits, raise a lot of revenue and discourage speculative financial activity,' said Thea Lee, policy director at the AFL-CIO."

"Lee said that taxing every stock transaction a tenth of a percent could raise between $50 billion and $100 billion per year, which could be used to pay for infrastructure projects and other spending priorities. She said the tax could be applied nationwide or internationally."

Will the appointment of a union political activist with little or no financial background impede the actions of the Federal Reserve and unduly support union activities over the Fed’s obligations to the citizens of the United States?

As I see it:

The Federal Reserve is a private institution that is owned by its member banks and has a congressional charter to act as our nation’s central banker.

On the private side, the Fed has a fiduciary interest to return a profit to its investors and to perform other such financial, repository, processing and reporting services which can not be performed by the institution’s members themselves.

On the public side, the Fed has a mandate to manipulate the monetary supply in such a manner as to encourage robust economic growth, maintain the soundness of our dollar, curtail the growth of inflation and to encourage full employment. This is does by using various “tools” to affect the economy.

And while I applaud the re-election of Ben Bernanke to another term as the Chairman of the Federal Reserve, I have great reservations about the appointment of Denis Hughes, president of the New York state branch of the AFL-CIO, who has been serving as acting chairman of the New York Federal Reserve Board since May.

About Denis Hughes …

“Denis M. Hughes, President of the 2.5 million member New York State AFL-CIO, became a union member at the age of 16 when he joined the Retail Clerks Union. In 1968, Mr. Hughes became a member of Local Union No. 3 of the International Brotherhood of Electrical Workers.”

“In 1985 Mr. Hughes joined the New York State AFL-CIO staff as Political Director and Assistant to the President. In February, 1990 he was appointed to the position of Executive Assistant to the President. In this capacity, Mr. Hughes was responsible for the coordination of the COPE and Legislative programs as well as the overall policy and development of the staff departments within the State Federation.”

“On March 23, 1999 Denis Hughes was elected President of the New York State AFL-CIO. He was subsequently re-elected to four year terms in August, 2000 and August, 2004.”

“As President of the New York State AFL-CIO, Mr. Hughes has made creating a more mobile, active and aggressive statewide labor movement a top priority. He has set a tone for organizing new members into the movement and has led the way in developing proactive legislative and political statewide strategy.”

Following up on his commitment to grow the labor movement and organize new members, President Hughes led a successful legislative effort to secure unprecedented labor protections and organizing rights for workers who work at casino gaming facilities in this state.”

“In addition, historic ‘card check’ legislation was passed that recognizes union designation by showing a majority interest through card check. This groundbreaking legislation speeds up the recognition process for those employees whose bargaining rights fall within the jurisdiction of the State Employee Relations Board.”

“In 2001, President Hughes led the way for New York State to become the first state in the country to adopt and implement the New Alliance. This historic restructuring initiative consolidates the economic, political and legislative force of the labor movement. The New Alliance allows the labor movement to better utilize its resources in order to secure progressive legislation and help labor supported candidates gain victory on Election Day.

“Denis Hughes is a graduate of the Empire State College, Harry Van Arsdale School of Labor Studies with a Bachelor of Science Degree.”  <Source: AFL-CIO>

While I have a fundamental disagreement with the concept of unions based on their socialist background, rewarding seniority over merit, raising the costs of all goods and services with ever-increasing wage and benefit demands, their promotion of anti-competitive work rules and their involvement in less savory activities, these are not the reasons I believe that Denis Hughes should not be the Chairman of the Federal Reserve.

The reason …

Denis Hughes is not have the requisite financial background to serve in this position … a position which affects every citizen and taxpayer in the nation as the New York Federal Reserve is often the chosen entity to implement the full economic actions of the Board of Governors of the Federal Reserve.

Denis Hughes appears to be a democrat operative and ally of President Barack Obama and appointed solely to insure that the unions continue to provide funding and voter support for democrat causes.

I believe Denis Hughes represents a major conflict of interest between the private and public sector of the Federal Reserve’s operations and I am unsure that his loyalty will fall to the citizens of the United States in the performance of his duties before those of his union members.

Considering President Obama’s promise of transparency and accountability, neither one of which is adequately enforced at the Federal Reserve, I am openly questioning whether or not Denis Hughes is the right person at the right time and will take the right action for the right reasons.

The Federal Reserve is still problematical …

Bloomberg is reporting …

“The Federal Reserve must for the first time identify the companies in its emergency lending programs after losing a Freedom of Information Act lawsuit.”

“Manhattan Chief U.S. District Judge Loretta Preska ruled against the central bank yesterday, rejecting the argument that loan records aren’t covered by the law because their disclosure would harm borrowers’ competitive positions.”

“The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under 11 programs, most put in place during the deepest financial crisis since the Great Depression, saying that doing so might set off a run by depositors and unsettle shareholders. Bloomberg LP, the New York-based company majority-owned by Mayor Michael Bloomberg, sued on Nov. 7 on behalf of its Bloomberg News unit.”

“The Federal Reserve has to be accountable for the decisions that it makes,” said U.S. Representative Alan Grayson, a Florida Democrat on the House Financial Services Committee, after Preska’s ruling. ‘It’s one thing to say that the Federal Reserve is an independent institution. It’s another thing to say that it can keep us all in the dark.’”

And so are the unions …

Nowhere has the confluence of organized labor and organized crime been so prominent as in New York. Union officials have often helped unqualified people and even organized crime members into the union.

“After two fatal tower crane accidents last year, New York City instituted a series of reforms to increase safety and oversight in the construction industry, including requiring a 30-hour class for crane operators and other workers on the safest way to raise and lower a tower crane.”

“But some sessions of the city-mandated class are being taught by a union official who has admitted that he helped unqualified people, including organized crime figures, get into his union, according to sworn testimony and investigative reports. He and other union officials helped some of those men secure licenses to operate smaller cranes at construction sites across the city, the testimony and the reports say.” <Source>

While most members of unions in the United States are hard-working individuals and family men, it is their leadership I suspect and there is no doubt in my mind that the confluence of politics, money and union activities might become more toxic as time progresses.

That is not to say Denis Hughes is not an honorable man who will do the right thing, it’s just that I do not trust President Obama and his band of community organizers to avoid influencing the upcoming elections to their advantage. After all, it’s the Chicago way – a blend of criminality, thuggishness and politics that loots the public treasury while professing to “do good” for the people.

Perhaps it is time for the membership of the unions to reassess their leadership and act first as individual citizens rather than members of an organization which may exert great influence in changing the course of America towards socialism.

And perhaps it is time to follow Representative Ron Paul’s lead in demanding an audit of the Federal Reserve. Personally, I see no reason why GSE’s (Government Sponsored Entities) should exist – often with built-in conflicts of interest. How long will it be before we discover that, like Fannie Mae and Freddie Mac, that the Fed has actually become Feddie Mad! In my opinion, the Federal Reserve should be abolished, its duties reclaimed by the Department of Treasury and the United States be slowly eased out of its fractional banking system. We should re-issue government green-backs and slowly remove Federal Reserve Notes from the system. After all, both are backed with the full faith and credit of the United States – even though the system is being co-managed by a private concern.

Be well, be safe and take care of yourself and your family first.

-- steve

_______________________________________________

OneCitizenSpeaking: Saying out loud what you may be thinking …

Reference Links:

Labor Leader Named Head of New York Fed - WSJ.com

Court Orders Fed to Disclose Emergency Bank Loans (Update2)