The Federal Reserve becomes unemployed

WA Post: The acrimony that erupted Thursday between President Obama and members of his own party largely pivoted on a single item in a 1,600-page piece of legislation to keep the government funded: Should banks be allowed to make risky investments using taxpayer-backed money?
The very idea was abhorrent to many Democrats on Capitol Hill. And some were stunned that the White House would support the bill with that provision intact, given that it would erase a key provision of the 2010 Dodd-Frank financial reform legislation, one of Obama’s signature achievements.

But perhaps even more outrageous to Democrats was that the language in the bill appeared to come directly from the pens of lobbyists at the nation’s biggest banks, aides said. The provision was so important to the profits at those companies that J.P.Morgan's chief executive Jamie Dimon himself telephoned individual lawmakers to urge them to vote for it, according to a person familiar with the effort.

What is this all about? 

The member banks want freedom from Federal regulations, they are tired of  being limited to a miserable .25% YoY interest on reserves. So they organize their bretheren, the Wall Street investmen banks to get the Federal Reserve out of the loop and allow member banks to trade other market instruments rather than just loans and deposits.

The member banks are the separate half of the Wall Street investment banks, they keep separate books by law, but ultimately remain part of the same company.  The member banks have been on welfare since the crash, and now they are free again.

Is this a fair deal?
It is no more unfair then Ben stoking the stock market to save a moribund California pension system.  If the Keynesians can get Ben to fib about his intended purpose with QE, then anything is on the table. Wasn't it Ben himself using the pseudonym for emailing among the conspirators? One lie begets another, and I say go for it.

Besides, as near as I can tell, the Fed knows they are not independent, Congress, afterall, takes 100% of their gains. We know the fiat banker can never operate unless it controls both incoming and outgoing ink and paper, yet not one Keynesian pointed out this obvious error, in fact all economists, including Uncle Milt, missed this problem for 250 years. It was not until George Selgin that we learned what the problem with fiat banking really is.

What about a better currency alltogether?

Why not? A few lines of code, the smart credit card and we have it, a new money technology that avoids the government altogether and us free to issue out own currency if we want.