By John Crudele | February 14, 2016 | 6:00am | www.nypost.com
Give Federal Reserve head Janet Yellen credit for one thing: She has united Democrats and Republicans — in their hatred of her and her organization.
Yellen went before Congress last week and the elected officials from both parties held a disdain-a-thon.
Democrats basically echoed candidate Bernie Sanders, whose mantra is that America is unfair; the rich keep getting richer thanks to government policies and all strata of the middle class are getting a fastball thrown at the back of their ear.
The Republicans come to the same conclusion but from a different angle. The Fed, says the leading Republican presidential candidate of the moment, Donald Trump, has created bubbles in the financial markets and it’s going to end badly.
It used to be during these congressional hearings that you could close your eyes and tell the party affiliate of the person speaking just by barbs and blossoms thrown. Not anymore. Both sides blame Yellen, and by extension, the administration.
Americans are way ahead of our elected officials. A survey released by the Pew Research Center last week revealed that 65% say the economic system in America “unfairly favors powerful interests.”
The attitude is bipartisan, with 54% of Republicans and 73% of Democrats agreeing.
And — this is important — this poll was taken between last August and October. That’s before the stock market started tanking, the Federal Reserve raised interest rates for the first time in eight years and before Yellen was peppered with questions about the latest crazy idea — “negative interest rates.”
Negative interest rates are simple to explain: People put their money into a bank or US government securities and instead of getting interest on that deposit, they have to pay a fee for the privilege.
No Republic or Democrat said it in so many words, but it was clear this would be the last straw.
If the Fed decides to go the way of Japan and some European countries in charging savers for the safekeeping of their money, expect massive backlash.
Some in Congress have already threatened to audit the Fed just on principle. Keep it up, the Fed’s critics say, and we’ll take a look behind the curtain to see what the least regulated of American organizations has been doing with the vast power it has to set interest rates, control the economy and change people’s lives.
An audit would probably start with the trillions of dollars of government bonds purchased by the Fed through an experimental program called quantitative easing. These bonds were bought, essentially, with newly printed money. The goal was to create more demand for Washington debt at bond auctions (from Washington itself) so that interest rates would hug 0%.
In any other auction (art, cars, win-a-date) that would be considered having a shill in the audience jacking up prices and lowering rates. But the Fed has gotten away with it.