Goldman’s Dept of the Treasury

Ironically, when the Federal Reserve Bank system was created in 1913 it was a response to a more controversial plan called the “Aldrich Plan” that faced fierce opposition among Democrats because it was speculated that the plan would give complete control of a federal central bank to private bankers (referred to as “the Money Trust) who would use it to enrich the wealthy and powerful… somewhat prophetic considering what the Fed has become…

The problem is the politics of all this. Half of the financial world already thinks Goldman runs the U.S. Treasury and Fed, however unfairly. The American public is furious about the bailouts of AIG and banks, engineered by the Fed and Treasury, that have helped the likes of Goldman Sachs. And guess who Mr. Friedman’s search committee picked as Mr. Geithner’s successor when he left to run Treasury? Another Goldman alum, William Dudley. Yet with all of this in the political air, Mr. Friedman tried to stay in the New York Fed post at least through the end of 2009, and Mr. Kohn granted the waiver. It’s hard to imagine a more politically obtuse judgment.

[From The Friedman Flap -]