Monetary Democracy

Unsurprisingly, the major national banks tasked with issuing the money favored their own big clients. Since the loans were basically government grants, they offered little to the banks besides the opportunity to give some extra goodies to the companies they did a lot of business with. Writing for the American Prospect, David Dayen observed, "The monopolists get concierge service, the small businesses get to take a number." Because it is accountable to the people of the state instead of shareholders, it has a public mandate that goes beyond its bottom line. Other policy engagements concerned postal savings accounts, farm credit facilities, bank deposit guarantees, and ensuring that the Federal Reserve was overseen by public officials instead of financial insiders. Playing on the idea of central bank independence-which today means independence from the government-Shaw observes that "the abiding demand of workers and farmers" empowered the Fed to increase its "independence from the banking fraternity."