Peter Morici rips Treasury, Federal Reserve amid bank failures: 'Run by amateurs'
Former International Trade Commission Chief Peter Morici joined 'Fox & Friends First' to discuss the fallout over the bank failures and what the Fed should do moving forward.
When a crisis occurs and it becomes clear that government is not being accountable to the American people, two things have to happen. First, you have to make changes so that the crisis never happens again, and then you have to hold anyone that failed to do the right thing fully accountable. This isn’t easy, but it’s necessary if you want to truly reform anything and make it better.
Following the last two years of failed policy from the Federal Reserve, and this month’s shocking failures of Silicon Valley Bank (SVB) and Signature Bank, it’s clear we need big change now at the Fed. That’s why I’m introducing legislation to make needed changes at our central bank and hold bad actors at the banks accountable. I will fight like hell to protect American families and workers so the only winners here aren’t woke big tech billionaires and Wall Street.
Federal Reserve Chairman Jerome Powell testifies during a House Financial Services Committee hearing on Capitol Hill on Sept. 30, 2021. (Sarah Silbiger/Pool Photo via AP, File)
I was a bit shocked when President Biden and Treasury Secretary Janet Yellen repeatedly claimed last week that the U.S. banking system is strong. Excuse me for not jumping to believe the economic opinions of the people who told us inflation was "only temporary" in 2021. The people I talk to in Florida feel the same way. You can't trust anything out of the federal government right now, it's all massaged to fit their narrative.
The Biden administration lied about inflation, COVID origins, Afghanistan and countless other crises. That’s why we need independent authorities who can investigate government and fight for the transparency and accountability our citizens deserve. Across most of the government, we have these officials in the form of inspectors general. These presidentially appointed, Senate-confirmed investigators have the authority to get answers and expose fraud, waste, abuse and corruption. What’s shocking is that the Federal Reserve doesn’t have this oversight.
Treasury Secretary Janet Yellen testifies during the Senate Finance Committee hearing on Thursday, March 16, 2023. (Tom Williams/Getty Images)
Yes, you read that right. The Federal Reserve, the world’s largest and most powerful central bank, does not have a truly independent IG to investigate it. I’m fighting to fix that and will be introducing a bill soon – that I believe will have bipartisan support – to establish a presidentially-appointed, Senate-confirmed inspector general at the Fed like every other major government agency. This is commonsense and something that should have been done a long time ago.
If Fed Chairman Jerome Powell really cares about the American economy and serving the taxpayers, he will do three things during the Fed’s meeting this week: put his support behind this idea, tell us who at the Fed is being fired for its lack of bank oversight, and tell us what changes have been made so this never happens again. Let’s see if he’s brave enough to do it.
We cannot repeat 2008, where the Federal Reserve fails to do its job, no one at the Fed is held accountable, no changes are made there, and the rich and Wall Street get richer while working families struggle.
Of course, forcing more accountability at the Fed is only one piece of fixing this disaster. Banks need to be held accountable too.
The fact that executives at Silicon Valley Bank handed out bonuses, and paid themselves, when they knew they were going under is disgusting and shouldn’t be allowed. Along with my bill to install an independent IG at the Fed, I’ll be fighting to pass legislation that claws back these bonuses and any other excess compensation. We have to make sure that money is paid back to cover their losses and make innocent customers whole.
Right now, the system is set up to benefit the old Washington-Wall Street insiders while the American people are on the hook. We saw it in 2008 when the banks got a bailout and you paid for it. Now it’s happening again.
President Joe Biden speaks with reporters before departing from the South Lawn of the White House on Marine One on March 17, 2023. (Anna Moneymaker/Getty Images)
They might claim that the banks are going to pay for it with higher fees, but that’s just a pass through to bank customers. No one believes that. Everyone in Washington and on Wall Street is expecting you to pay for it, again. I say no. No more "free lunches" for the banks while the American people continue to foot the bill and suffer the consequences of failures they had no fault in.
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We need to recognize that there are moments in life when you work with a scalpel and others when you use a hammer. This moment calls for a hammer. It’s the only way we will make Wall Street and the old Washington insiders understand that we won’t take this corruption anymore.
Unfortunately, I don’t think we’ll have that kind of accountability in Washington until a Republican is back in the White House and Republicans in Congress stop caving to the radical agenda being pushed by President Biden and Senate Majority Leader Chuck Schumer, D-N.Y. But that doesn’t mean we should just sit and wait. We have to keep bringing this fight up every day because that’s the only way things will ever change. Installing a truly independent IG at the Fed is a great start and we should do it RIGHT NOW.
So, it’s time for some tough questions to get answered. We clearly need accountability from each of the failed banks. We don't need to bail out bad actors who mismanaged money, devoted themselves to woke nonsense instead of fiscal accountability and even gave themselves bonuses as the ship was sinking.
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The Fed needs to tell us what they knew about these bank’s vulnerabilities, when they knew it, who is at fault and what changes they are making. These failures have to stop. If they simply weren’t doing their job and keeping watch, we need to know that too.
The American people are tired of caving, tired of broken promises, and tired of paying the bill for Wall Street’s mismanagement and Washington’s failure to stand up and say enough. So am I and that’s why I won’t give up this fight.
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