Project Censored: Uncovering the most underreported news stories of 2012
Published: December 5, 2012
Source: Trevor Aaronson, "The Inform-ants," Mother Jones, September/October 2011; "FBI Organizes Almost All Terror Plots in the US," RT.com, Aug. 23, 2011.
5. First-ever Federal Reserve audit reveals at least 1 trillion in loans and conflicting interests
The Federal Reserve, the United States' quasi-private central bank, was audited for the first time in its history this year. The audit report states, "From late 2007 through mid-2010, Reserve Banks provided more than 1 trillion dollars ... in emergency loans to the financial sector to address strains in credit markets and to avert failures of individual institutions believed to be a threat to the stability of the financial system." These loans had significantly lower interest and fewer conditions than the high-profile TARP bailouts, and were rife with conflicts of interest.
Some examples: The CEO of JP Morgan Chase served as a board member of the New York Federal Reserve at the same time that his bank received more than $390 billion in financial assistance from the Fed. William Dudley, who is now the New York Federal Reserve president, was granted a conflict of interest waiver to let him keep investments in AIG and General Electric at the same time the companies were given bailout funds. The audit was restricted to Federal Reserve lending during the financial crisis.
On July 25, 2012, a bill to audit the Fed again, with fewer limitations, authored by Rep. Ron Paul, passed the House of Representatives. HR 459 is expected to die in the Senate, but the movement behind Paul and his calls to hold the Fed accountable, or abolish it altogether, seems to be growing.
Source: Matthew Cardinale, "First Federal Reserve Audit Reveals Trillions in Secret Bailout," Inter Press Service, Common Dreams, Aug. 28, 2011.
6. Small network of corporations controls global economy
A University of Zurich study reported that a small group of companies – mainly banks – wields huge power over the global economy. The study is the first to look at all 43,060 transnational corporations and the web of ownership among them. The researchers' network analysis identified 147 companies that form a "super entity," controlling 40 percent of the global economy's total wealth. The close connections mean that the network could be prone to "systemic risk" and vulnerable to collapse.
Some have criticized the study, saying control of assets doesn't equate to ownership. True, but as we clearly saw in the 2008 financial collapse, corporations are capable of mismanaging assets in their control to the detriment of their actual owners.
Sources: Rob Waugh, "Does One 'Super Corporation' Run the Global Economy? Study Claims It Could Be Terrifyingly Unstable," Daily Mail, Oct. 20, 2011; Stefania Vitali, James B. Glattfelder and Stefano Battiston, "The Network of Global Corporate Control," Public Library of Science, Oct. 26, 2011.