Breaking news: When it came to the collapse of the bubble that touched off the 2008 meltdown of the U.S. economy, the Federal Reserve was a placid herd of clueless blockheads.
Less than two years before the housing market turned kamikaze, Fed officials were gathering around conference rooms, congratulating one another on what a genius job they were doing managing the economy.
"We are unlikely to see growth being derailed by the housing market," Ben Bernanke assured the rest of the Open Market Committee, the Fed's major policymaking group, adding that the nation could expect "a relatively soft landing in housing." Not that anybody needed much convincing.
"We just don't see troubling signs yet of collateral damage (from housing prices) and we are not expecting much," declared Timothy Geithner, then head of the Fed's New York regional bank.
These remarkably unperceptive remarks were made at Open Market Committee meetings in 2006. The reason they're breaking news more than five years later is that the Fed has only just now made minutes of the meetings public.
You might think that when the agency that controls the entire money supply of the United States -- an agency that tosses trillions of dollars around like they were rolls of nickels -- routinely engages in such pathological secrecy, there would be a public outcry, especially in a Washington press corps that likes to brag about its role as watchdog of American democracy.
Sadly, the truth is quite the opposite. When it comes to the Fed, the press plays more like one of those toy poodles that sits in your lap.
The Fed has been the most compulsively furtive part of the U.S. government since the plans for it were hatched during a secret 1910 meeting of powerful bankers and Taft administration officials on a private island. (They blandly told the press they were hunting ducks.)
Practically nobody knows what the Fed is up to, ever. The same laws that make it independent of the rest of the government make it largely unaccountable. Its policymaking meetings are closed, and most of its significant documents are exempt from the Freedom of Information Act.
"The Fed is so inscrutable that big banks employ Ph.D.s whose entire lives are dedicated to trying to figure out what the Fed is doing," says Johns Hopkins economist Steve H. Hanke, himself a venerable reader of Fed tea leaves.
One academic study found that three-quarters of the articles on the Fed written by economists during 2002 were either authored by Fed staff economists or published by Fed-sponsored publications. Independent economists are mercilessly frozen out.
Bernanke has fought like a tiger to keep the Fed shielded from the prying eyes of the American peasantry. When Bloomberg News and Fox News filed Freedom of Information Act requests to find out exactly how much money the Fed spent on bailouts after the 2008 financial meltdown and to whom it went, Bernanke stonewalled them for two years before a court order forced him to comply. He also battled ferociously against a proposal for an audit of the Fed proposed by a couple of strange ideological bedfellows -- socialist Sen. Bernie Sanders and libertarian GOP Rep. Ron Paul -- united by their disgust over the Fed's stealth policy-making.
When the Occupy movement and the tea party agree on something, maybe the rest of us ought to pay attention.
Glenn Garvin is a columnist for The Miami Herald.
