The Fed is scared

Just follow the events in the past few days:

June 5 (Bloomberg) -- The Federal Reserve intends to hire a veteran lobbyist as it seeks to counter skepticism in Congress about the central bank’s growing power over the U.S. financial system, people familiar with the matter said.

Linda Robertson currently handles government, community and public affairs at Johns Hopkins University in Baltimore, and headed the Washington lobbying office of Enron Corp., the energy trading company that collapsed in 2002 after an accounting scandal. She was also an adviser to all three of the Clinton administration’s Treasury secretaries.

Robertson would help the Fed manage relations with lawmakers seeking greater oversight of a central bank that has used emergency powers to prevent Wall Street’s demise. While she wasn’t tied to Enron’s fraud, her association with the firm may raise questions, analysts said. [...]

Robertson served under Treasury Secretaries Lawrence Summers, Robert Rubin and Lloyd Bentsen. She didn’t return calls seeking comment.

Summers now heads the White House National Economic Council. Along with Treasury Secretary Timothy Geithner, he is leading Obama administration efforts to broaden the economic rescue and overhaul financial regulation. He has been mentioned as a possible successor to Fed Chairman Ben S. Bernanke should Bernanke not be renominated when his term ends in January.

The Fed is playing defense and trying to avoid spotlight:

June 9 (Bloomberg) -- The Federal Reserve has backed off from seeking a new tool to forestall inflation, refraining from asking Congress for the power to issue its own debt, according to a person familiar with the matter.

The House attacks the Fed:

June 9 (Bloomberg) -- The Federal Reserve was subpoenaed by the House Oversight Committee for e-mails and documents related to Bank of America Corp.’s purchase of Merrill Lynch & Co. after the panel was unable to obtain them through a request last week.

Ken Lewis — lacking any courage in the first place when he accepted the deal and now the courage to accept the consequences of the deal — also attacks the Fed. I had already predicted that, almost a year ago:

June 10 (Bloomberg) -- Bank of America Corp. Chief Executive Officer Kenneth Lewis said federal officials pushed him to complete the purchase of Merrill Lynch & Co. after he became aware of “significant accelerating losses” at the New York-based brokerage.

The Fed is bending and trying to avoid further litigation is chickening out:

June 10 (Bloomberg) -- The Federal Reserve unveiled its most detailed picture yet of its record $1 trillion expansion of credit, as Chairman Ben S. Bernanke responds to congressional pressure for greater transparency from the central bank.

For the first time, the Fed announced details on the number of borrowers and the ratings of securities pledged as collateral for loans. The data come in a new monthly report released by the central bank today in Washington.

Officials still stopped short of identifying the firms, a measure called for by some lawmakers and the subject of freedom-of-information requests and lawsuits. [...]

Senator Bernie Sanders, the Vermont independent who sponsored an April 2 resolution that urged the Fed to identify borrowers and passed by a 20-vote margin, said today’s Fed report is “completely insufficient.”

“It is time for the Fed to name names,” Sanders said in a statement. The money “belongs to the American people,” and disclosure would show whether banks that are repaying the government’s capital injections are getting loans from the Fed, the senator said. [...]

Everything that has a beginning has an end. The Fed's time might be up and there's never been a better moment to abolish the Fed.