More on the Fed Tapes story from one of the great financial journalists left, William Cohan.
By WILLIAM D. COHAN September 26, 2014
Poor Carmen Segarra. She thought she was dropping the goods on Wall Street, but no one cares.
So now, thanks to secret tape recordings made by Carmen Segarra, a rightly disgruntled former employee of the Federal Reserve Bank of New York, the Fed has had its Ray Rice moment, as Michael Lewis suggested. You know, where the media gets all shirty with righteous indignation and won’t let go of the story until it has a serious scalp.
For those of you who haven’t been paying attention, here’s the basic beef: After Segarra raised questions with her superiors at the Fed about its light-hands treatment of Goldman Sachs, she was fired. Segarra later passed over tape recordings of internal Fed conversations to ProPublica, the investigative reporting nonprofit, and alleged that the New York Fed was being pushed around and cowed by Goldman and other Wall Street banks rather than acting in its proper role as regulator.
The sudden appearance of Segarra’s tape recordings in the news this week was reminiscent of the way that the NFL was embarrassed by the videotape that showed Rice, the now-suspended Baltimore Ravens running back, knocking out his girlfriend in an elevator – all of which suggested the NFL knew about the abuse but gave Rice kid-gloves treatment, as it does in many cases of abuse. The truth is, although both incidents do reveal something about the way the powerful and famous get away with more stuff than the rest of us, there’s no real comparison. The Segarra Tapes actually reveal little or nothing that was not already known, assuming you have a shred of understanding how the Federal Reserve banks actually work. Nor is William Dudley, the president of the Federal Reserve Bank of New York, about to get pilloried in public like NFL Commissioner Roger Goodell.
Sorry, folks, but this is simply the way the New York Fed was designed to behave.
Read the entire post at Why the Fed Will Always Wimp Out on Goldman – William D. Cohan – POLITICO Magazine.