Newt Gingrich’s video attack on the Federal Reserve
“When hundreds of billions of dollars of our money is being spent, it can’t be in secret and I think the Federal Reserve has become so important to our economy and it affects our lives in so many ways that we the American people have the right to know how our money is being spent. …We should repeal the Dodd-Frank bill…This economy is going to stay mired in a bad economy until we bring the Fed under control and we repeal the Dodd-Frank bill ”
— Former House speaker Newt Gingrich (R-Ga.), in a new campaign video titled “Who Got the Money?”
With exquisite timing, former House speaker Newt Gingrich released a new presidential campaign video titled “Who Got the Money?” on the same day reports surfaced that Gingrich had a second line of credit at Tiffany and Co., this one valued at $500,000 to $1 million.
The two-minute video (embedded at the end of the column) is a somewhat confusing attack on the Federal Reserve, which appears to be part of an attempt by Gingrich to appeal to supporters of Rep. Ron Paul (R-Tex.), a fierce critic of the Fed.
In the video, Gingrich also calls for the repeal of the Dodd-Frank law, the financial regulatory overhaul that was signed into law less than a year ago. In the video, Gingrich never quite makes clear the reasons for repeal, besides an animus for the Democratic lawmakers whose names adorn the bill, Sen. Chris Dodd (Conn.) and Rep. Barney Frank (Mass.)
The video, which closes with an appeal to demand an audit of the Fed, leaves the impression that the Fed has not disclosed what it did to shore up financial institutions during the 2007-2008 financial crisis. Is that the case?
On the Federal Reserve website, there’s a section titled “Usage of Federal Reserve Credit and Liquidity Facilities.” As the website explains, the page provides “detailed information about the liquidity and credit programs and other monetary policy tools that the Federal Reserve used to respond to the financial crisis that emerged in the summer of 2007.”
The right side of the website provides links to 13 facilities and programs used by the Fed, along with excel spreadsheets and other details on the loans.
The Federal Reserve did not release this detailed information on its own accord. As Rep. Paul said in a statement earlier this month: “It took an act of Congress, the Dodd-Frank Act, to bring about the December releases that discovered the details of the emergency lending facilities set up by the Fed during the crisis.”
Yep, Dodd-Frank -- the very same law that Gingrich condemns in the video. (Paul goes on to say that this information, along with disclosures on discount window lending that were ordered by the courts, is “woefully incomplete.”)
To be fair, Gingrich explained his position more fully in a speech he delivered Wednesday before the Atlanta Press Club. He acknowledged that “the Fed has begrudgingly made two rounds of disclosures about who got the money and how much between 2007 and 2010.” Some of the information released, such as loans to the Arab Banking Corp., were “shocking,” Gingrich said.
Gingrich called for narrowing the Fed’s mandate and a comprehensive audit of the Fed to learn “the whole story.” He also said that he wants to repeal Dodd-Frank because it is “the most destructive assault on businesses in a decade” and he believes it will stifle job growth.
Gingrich spokesman Joe DeSantis acknowledged that “Dodd-Frank did indeed provide a one-time limited audit of specific Fed lending that occurred during the financial crisis, thanks to an amendment added by [Sen.] Bernie Sanders,” a Vermont Independent. “We think this is a good start,” he added. “However, this limited disclosure fell well short of the comprehensive audit that many in Congress have sought for years.”
The Pinocchio Test
Even at a running length of more than two minutes, Gingrich’s video gives a misleading impression of the Federal Reserve’s explanation of its actions during the economic crisis — and the role of the Dodd-Frank law in forcing those disclosures. His speech gives a clearer view of his critique but that is not an excuse since fewer people will read the speech than see the video.
Watch the Gingrich video