(quote) Sean-851370 said: Nationalize the Fed, bring back Glass-Steagall, end globalization and tear down the anti-American empire of the Street. End floating exchange rates, ban certain types of options trading, etc. Basically gear the economy toward production and away from destructive gambling.
How ridiculous! The Fed is already part and parcel of the Federal Government.
With only one exception, the chairman and all the members of the Federal Reserve Board are nominated by the President of the US of A with the Advice and Consent of the Senate. The only exception is that the President of the Federal Reserve Bank of New York is by law a member of the Board.
The 12 Federal Reserve Banks are nominally Private Banks, owned by the member banks in their district. The reality is that the Banks are owned by the Federal Government and the private ownership is only nominal.
Ownership means that you re free to buy and sell your ownership interest at will. That you can buy as little or as much of a company as you wish at any time. It also implies that you can sell your ownership interest to whomever you want, whenever you want at any price agreeable to the buying and selling parties.
As an owner you are entitled to any and all profits of the enterprise you invest in (conversely absorbing any losses) either through dividends or an increase (decrease) in the value of your holdings. In the events that the enterprise is liquidated, as an owner you are entitled to receive your share of the amounts realized from the liquidation.
None of these necessary incidence of ownership belong to a member bank.
Membership (becoming a stockholder) is required by law. As a bank you have no say in the matter. The amount of stock you buy and the price thereof is stipulated with the force of law via the reserve requirement set by the Federal Reserve Board which you must deposit with your District Bank. You cannot buy more or less than the specified amount. You cannot sell your shares to anyone you choose but only to the District bank from which you were forced to buy them in the first place.The only amount you will receive for your shares is exactly the same amount you were forced to buy (deposit with the District Bank.)
No matter how profitable the District Bank may be, as a supposed owner, your investment never increases in value. The Governing Board of your District can (but is not required to) declare a dividend to be paid to the member (owner banks) from its profits, but by law that dividend can be no larger than 6%.
All the rest of the profit, except that which the District Bank retains to fund its level of operations, belongs to and must be paid to the US Treasury, not as a tax but because it belongs to the Federal Government.
If the Banks are ever liquidated by act of Congress, all assets and proceeds from the liquidation except for the required reserve requirements which are returned to the member banks, are turned over to the US Government to do with as it pleases.
As nominal owners, the member banks, elect the Board of Directors of the District Bank who in turn hire the major officers of the District Bank who in turn are responsible for the day to day operations of the Bank. The Board also sets the operating policy of the District Bank but only within the parameters specified by the Federal Reserve Board in Washington, who are beholden only to the Congress and the President.