Sen. Bernie Sanders has tapped some of the nation's top progressive economists to help draft a plan to overhaul the Federal Reserve, which he says is "riddled" with conflicts of interest and other problems. Joseph Stiglitz, a Nobel Prize winner, and Jeffrey Sachs, director of the Earth Institute are on the advisory committee. Sanders acted after a damning report by the Government Accountability Office found apparent conflicts of interest by bank-picked board members at the 12 regional Fed banks.
Top executives from Goldman Sachs, J.P. Morgan Chase, General Electric and other firms sat on the boards of regional Federal Reserve banks while their firms benefited from the central bank's policies during the financial crisis, the investigation found. The dual roles created an appearance of a conflict of interest, according to the GAO.
After the report was issued Wednesday, Sanders said he would work with top economists to develop legislation to restructure the Fed and tighten rules on conflicts of interest, ensure that the Fed fulfills its full-employment mandate, increase transparency, protect consumers and reduce income inequality.
Sanders' panel of experts includes:
- Joseph Stiglitz, the 2001 winner of the Nobel Prize. The economics professor at Columbia University is a former chief economist for the World Bank.
- Jeffrey Sachs, director of The Earth Institute and an economics professor at Columbia University. He also is special advisor to United Nations Secretary-General Ban Ki-moon.
- Robert Reich, Professor of Public Policy at the University of California, Berkeley. Reich has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President-Elect Obama's transition advisory board. In 2008, Time Magazine named him one of the ten most successful cabinet secretaries of the century.
- James K. Galbraith, Lloyd M. Bentsen Jr. Chair in Government/Business Relations and Professor of Government at the Lyndon B. Johnson School of Public Affairs, University of Texas at Austin. Galbraith served in several positions on the staff of the U.S. Congress, including Executive Director of the Joint Economic Committee.
- Lawrence Mishel, president of the Economic Policy Institute, the premier research organization focused on U.S. living standards and labor markets.
- William Black, associate professor of economics and law at the University of Missouri, Kansas City. He worked with the Federal Home Loan Bank Board, the Federal Savings and Loan Insurance Corporation and the Office of Thrift Supervision.
- Nomi Prins, a senior fellow at Demos, was a managing director at Goldman Sachs, a senior manager at Bear Stearns in London, a senior strategist at Lehman Brothers, and an analyst at the Chase Manhattan Bank (now JPM Chase)
- William Greider, author of Secretsof the Temple: How the Federal Reserve Runs the Country, a monumental account of how the American central bank, cloistered and protected from public accountability, exercises its control over the US economy - workers, consumers, investors.
- Jane D'Arista, an Economic Policy Institute research associate, has written on the history of U.S. monetary policy and financial regulation, The former Boston University School of Law professor previously served as a staff economist for Congress.
- Tim Canova, professor of economics and law and co-director of the Center for Global Law & Development at the Chapman University School of Law in Orange, Calif. He was an early critic of financial deregulation and warned of the dangers of the bubble economy.
- Robert Johnson, senior fellow and director of the Project on Global Finance at the Roosevelt Institute. He was chief economist of the Senate Banking Committee and a senior economist for the Senate Budget Committee.
- Dean Baker, co-director of the Center for Economic and Policy Research in Washington, D.C. He was a senior economist at the Economic Policy Institute, a consultant for the World Bank and the Joint Economic Committee of the U.S. Congress.
- Gerald Epstein, chair of the economics department at the University of Massachusetts at Amherst. Epstein also is the co-director of the Political Economy Research Institute.
- Robert Auerbach, professor at the Lyndon B. Johnson School of Public Affairs with the University of Texas at Austin. Auerbach was an economist with the House banking committee during the tenure of four Federal Reserve Chairmen: Arthur Burns, William Miller, Paul Volcker, and Alan Greenspan. Auerbach also served as an economist in the U.S. Treasury's Office of Domestic Monetary Affairs during the first year of the Ronald Reagan administration and as a financial economist with the U.S. Federal Reserve System.
- Robert Pollin, co-director of the Political Economy Research Institute and economics professor at the University of Massachusetts-Amherst. He has worked with the Joint Economic Committee and the U.S. Competitiveness Policy Council.
- L. Randall Wray, a professor of economics and research director of the Center for Full Employment and Price Stability at the University of Missouri-Kansas City, and a Senior Scholar at the Levy Economics Institute.
- Stephanie Kelton, associate professor of Economics at the University of Missouri, Kansas City and a research scholar at the Center for Full Employment and Price Stability.
The need for major reforms at the Federal Reserve was driven home by the GAO findings announced Wednesday and in an earlier report issued on July 21. Both unprecedented audits of the Federal Reserve were required by a Sanders' amendment to last year's Wall Street reform law.
To read an analysis of the GAO report prepared for Sen. Sanders, click here.
To read the full GAO report, click here.