Paul’s speech in St. Cloud touched on issues like domestic economic policy, the drug war and foreign interventions.

“The country and the world is in a mess today, and I’m quite convinced that we know exactly how we get here and exactly what to do,” Paul told the crowd, “and one thing’s for sure is we don’t need more government.”

Paul blamed the Federal Reserve for helping to bring about the speculative bubbles that sunk the nation’s economy.

“It’s the Federal Reserve that by interfering in the monetary system, monkeying around with interest rates, they create the bubbles,” Paul said. “For a while they can create one bubble and patch it up again, but eventually the big bubble bursts.”

He also condemned government bailouts of big banks and companies.

“They said if we don’t bail out the system there would be a depression,” Paul said. “Guess where the depression would have been? It would have been on those who were receiving our money. Instead the depression was dealt to the people, the middle class, they lost their jobs and they lost their houses and we the taxpayer absorbed the debt.”

Paul also voiced support for abolishing the Department of Education and the federal income tax, condemned the drug war as a tragedy and worried about creation of a worldwide monetary currency.

He told supporters that the country is increasingly in agreement with their libertarian economic views.

“We’re witnessing the end of an economic era,” Paul said. “This is a tremendous opportunity for those of us who believe in liberty to get this message out.”

Paul’s foreign policy stances have drawn jeers from some Republican crowds at debates, but he continues to advocate for neutrality and condemn the United States’ assassination of American citizen Anwar al-Awlaki, saying that ”what we must worry about is the rule of law because the rule of law protects us.”

Organizers put the turnout for the Republican candidate at about 2,500. Paul has trailed in most polls, but has captured a number of high-profile straw poll victories.

“You can not stop an idea whose time has come and the idea of liberty’s time has returned,” Paul said of his supporters. “We don’t have to understand each little issue, all we have to do is legalize freedom.”

Wells Fargo is one of 30 companies that paid less than nothing in federal corporate income taxes since 2008, according to the report. The company posted over $49 billion in profits in that period but had an effective tax rate of -1.4 percent, meaning it made more after taxes than before.

The report found that amounts to $18 billion in tax subsidies over the last three years, with the company paying -$681 million in taxes.

Wells Fargo, based in San Francisco, has its main office in Sioux Falls, S.D.

The study looked at federal income taxes paid by 280 of America’s largest and most profitable corporations in 2008, 2009 and 2010. All of the companies are on Fortune Magazine’s annual list of America’s 500 largest corporations.

It found the companies reported profits of $1.4 trillion over that period, and should have paid $473 billion in income taxes, based on the 35 percent corporate tax rate. But tax subsidies over that time totaled $222.7 billion.

Of the 280 companies, 71 paid a tax rate near 35 percent; 67 paid rates less than 10 percent; and 30 paid rates less than 0 percent, in some cases actually receiving checks from the government.

A report issued last week found Wells Fargo & Co. is one of the top 10 transparent and accountable companies in the S&P 100 when it comes to political spending. It and other companies were ranked based on 29 different indicators to gauge disclosure, policies, compliance and oversight.

On Saturday it will be one of two national banks targeted by members of the Occupy movement as part of “National Bank Transfer Day.” The initiative aims to convince Americans to move their money from the larger banks and into “more responsible, community-driven financial institutions.”

In Denver, occupiers will vacate Civic Center Park this weekend in order to honor veterans, who will use the park for the start of a Veterans’ Day parade.

Occupy Denver will reestablish its Occupation at Skyline Park on 16th Street Mall, directly across from the Denver Federal Reserve building, and has planned a series of actions for Saturday to coincide with the bank boycott known as Bank Transfer Day, in which customers are urged to close their accounts with what occupiers refer to as “predatory” financial institutions like Wells Fargo, Citibank, and Chase, and redeposit their funds into their local credit unions.

Occupy Denver member Mitch Shenassa explains, “The Occupation has deliberately chosen the space across from the Federal Reserve as its temporary site to bring attention to the economic dangers posed by this independent central bank and its short-sighted fractional reserve banking system that cause the devaluation of our currency and the ballooning of our national debt.”

Saturday’s Occupy Denver march will begin at the Federal Reserve, 1020 16th Street, and proceed to a number of Denver banks.

Scot Kersgaard contributed to this article.

Businessman Herman Cain came in second with 14 percent. Former U.S. Sen. Rick Santorum, former U.S. House Speaker Newt Gingrich, U.S. Rep. Michele Bachmann and Texas Gov. Rick Perry each got 1 percent or less. Former Utah Gov. Jon Hunstman and former Massachusetts Gov. Mitt Romney received no votes.

It was clear from the beginning of the event the majority of attendees came to see Paul, who spoke first. Former U.S. Sen. Rick Santorum also spoke at the event, while former U.S. House Speaker Newt Gingrich addressed the crowd briefly by video.

Ron Paul speaking at NFRA in Des Moines (Andrew Duffelmeyer/Iowa Independent).

Paul got a warm reception from the audience of several hundred, saying what the country needs is less government intrusion, more openness in government, a focus on dealing with the national debt and a foreign policy overhaul.

The federal government has invaded peoples’ lives, Paul said, especially through the Patriot Act. He called for repealing the law put in place following 9/11, saying it undermines liberty.

He also wants investigations into the federal reserve, the war in Iraq, the Fast and Furious operation and government loans to Solyndra.

“If there’s any one thing that would benefit us, it is to get more openness in government,” Paul said.

On foreign policy Paul delivered a strong anti-war message, calling United States foreign policy “deeply flawed” and saying “it’s time for us to come home and mind our own business.”

And on the economy, Paul said lowering the national debt, cutting the budget and auditing the federal reserve would go a long way toward putting the country back on track.

“This country needs to wake up and quit lying to itself, whether it’s on the economics or the foreign policy,” he said. “What we need is a healthy dose of renewal of the spirit of liberty.”

Rick Santorum at NFRA straw poll in Des Moines (Andrew Duffelmeyer/Iowa Independent).

A small crowd of about 50 remained by the time Santorum spoke about an hour later. He said the 2012 election is about “the heart and soul of America,” and described himself as a candidate that can win, can govern and can be trusted. He also attacked President Obama on a number of fronts, saying he’s hurt America’s security, expanded government and undermined the family.

“It is an election about whether we’re going to be a free people who believe in limited government, who believe in the free enterprise system, who believe in the dignity of human life, who believe in the central building block of our society which is the family,” he said.

President Rod Martin described the NFRA as believing in “a more libertarian strand” of conservatism than the Republican Party as a whole. The tagline for the group is “the Republican wing of the Republican Party.”

“We believe our country has been overrun by people who don’t share those values, and we think it’s time to give them the pink slips they’ve been giving all of us,” Martin said.

With Republicans in Congress unwilling to pass President Obama’s jobs bill, many believe that the Federal Reserve is the only institution left that can lift the economy out of its seemingly perpetual slump.

That has led to the normally quite secretive Federal Reserve, the nation’s most important economic institution, coming under increased scrutiny. This in turn means that the question of who leads the Fed is growing more important.

A new report has revealed that an overwhelming majority of the Fed’s leadership is made up of executives from banks and private corporations, confirming previous American Independent reporting. The report, from the Government Accountability Office (GAO), looked at the membership of the boards of directors of the 12 regional Federal Reserve banks.

Using a voluntary survey of the currently serving directors, the GAO found that over three-quarters of the regional Federal Reserve directors are the president or CEO of the company they work for. Of the directors that have served from 2006 through 2010, only six represented labor and five represented consumers, while 56 represented commerce or industry interests, and 73 represented banking interests.

The report recommends extending director recruitment efforts beyond the senior executive level: “To the extent that director searches are limited to chief-level executives, the Reserve Banks not only limit the diversity of the pool of potential candidates but also risk limiting the perspectives shared about the economy in the formation of monetary policy.”

Federal Reserve Chair Ben Bernanke said in an official response to the report that the Fed has “has already broadened the pool of candidates for these positions to consider qualified candidates who are not chief executives.”

Sen. Bernie Sanders (I-Vt.), who requested the report as part of the Dodd-Frank financial regulatory reform law, called the financial sector’s influence over Fed leadership “unacceptable.”

“Not only do they run the banks,” said Sanders in a statement, “They run the institutions that regulate the banks.”

“Recruiting consumer and labor representatives is a challenge”

The Federal Reserve System is comprised of the central bank in Washington, D.C. and 12 regional Federal Reserve banks. These are charged with carrying out policy dictated by the Federal Reserve guiding committee, the Federal Open Market Committee (FOMC), which in turn is required by Congress to craft policy keeping unemployment low and prices stable. The presidents of the regional Feds, which are selected by the boards of directors, also rotate through five of the twelve voting seats on the FOMC.

Each board consists of nine members: six members are selected by the member banks of the Federal Reserve, and three are selected by the national Federal Reserve Board in Washington. “Class A” members of the regional Fed boards are selected by banks that participate in the Federal Reserve to represent their interests, and are usually commercial bank officials.

The Federal Reserve Act requires that the other 6 directors of each board, 3 “Class B” members appointed by the member banks and 3 Class C members appointed by the national Board, “represent the public” and be “elected with due but not exclusive consideration to the interests of agriculture, commerce, industry, services, labor, and consumers.”

But Fed officials told the GAO that “they generally focus their search on senior executives… usually CEOs or presidents.” Officials also told the GAO that “having senior executives on the board of directors helps elevate the stature of the board” and that senior executives “may have a broader view of how their industry is being affected by the economy.”

Despite the fact that Class B and Class C directors aren’t allowed to have ties to the banking industry while serving on the board, the GAO report found that “at least 56 percent [of the surveyed directors] have had some financial industry experience.”

The GAO cited a 2010 memo from the Federal Reserve Board that said recruiting representatives of organized labor and consumers to serve on the regional Fed boards was a “high priority.” But two Fed officials told the GAO that “recruiting consumer and labor representatives is a challenge because many of them are politically active,” and the Board’s policy restricts a director’s political activity.

It’s unclear how the national Board defines “political activity”. TAI’s previous reporting has shown many of the directors have donated generously to political campaigns. And the political activities of at least one director, JPMorgan CEO Jamie Dimon, are regularly the target of speculation by the national media, given his close relationship with the Obama administration and his recent meetings with Republican candidate former Massachusetts Gov. Mitt Romney.

Using data from the Equal Opportunity Employment Commission, the GAO compared the demographics of the Fed board directors with the demographics of “executive and senior level officials and managers” of firms with more than 100 employees, and found that they were quite similar.

Women and racial minorities are extremely underrepresented on the boards: In 2010, 15 of the 108 directors were minorities, and 18 were women. Despite officials telling the GAO that “Class B and Class C directors are a source of demographic diversity on Reserve Bank boards,” only 32 of the 202 Class B and C directors since 2006 have been women, and 23 have been minorities.

The education level of the directors is also unrepresentative: An “overwhelmingly majority” of the directors have a bachelors’ degree, and at least 55 percent have some type of advanced degree.

The GAO found that the selection process relies heavily on personal networking, with many directors selected after a personal recommendation from a current or previously serving director. 86 out of the 91 surveyed directors in 2010 serve on some other board of a for-profit or non-profit company.

One official told the GAO that “they look for candidates in a variety of industry lists such as a Forbes’ magazine list of the most powerful women in business,” while other directors have pursued the job by reaching out to the Fed staff themselves.

“The appearance of conflict of interest”

Fed watchers have noted that regional Fed presidents, selected by the boards of directors, tend to have the most conservative voting records on the FOMC when considering whether to use extraordinary measures to reduce unemployment. Reuters recently rated FOMC members and Fed presidents on their aversion to further stimulating the economy, and found that the most hawkish or anti-stimulus members of the Committee were all regional Fed presidents.

The importance of diversity in the country’s most important economic institution can be seen in the unemployment statistics: While the unemployment rate for people with at least a bachelor’s degree was 4.2 percent in September, for those with only a high school diploma it was 9.7 percent. For whites, the unemployment rate is 8 percent, but for Hispanics it’s 11.3 percent and for African-Americans it’s 16 percent.

Rep. Barney Frank (D-Mass.), the Ranking Member of the U.S. House Financial Services Committee, has proposed eliminating the voting power of the regional presidents. Frank says that all of the voting members of the FOMC should be directly appointed by the president and confirmed by Congress, rather than selected by boards made up of business leaders.

The GAO appears to agree, at least in part, with Frank: “The statutory requirement for three classes of directors was intended to provide representation of both stockholding banks and the public… However, the existence of Class A and to a lesser extent Class B directors on the boards creates an appearance of a conflict of interest, particularly in matters involving supervision and regulation.”

This became especially apparent during the recent financial crisis, when the Fed created multiple emergency programs that provided direct financial support to the country’s largest banks.

The report found no instance of a director being directly involved with the supervision of a program that benefited his or her banking institution. Nevertheless, the GAO recommended that any waivers granted to directors in the event of a conflict of interest be made public.

Transportation costs — including gas — were again the biggest contributor to the West’s year-over-year price spike last month, up 9.6 percent from a year earlier, BLS said. Food and beverage prices rose 4.4 percent from year-ago levels, and apparel costs rose 3.7 percent. Month-over-month, the greatest increase from August to September in the western states was for apparel, up 3.8 percent.

Compiled by the Bureau of Labor Statistics, the Consumer Price Index measures headline inflation, which includes changes in the prices of energy and food. The high year-to-year change of global fuel prices, which economists say is driven by a combination of increasing demand from emerging markets and speculation, means that ordinary American consumers typically experience higher average expenses than they would otherwise.

Core inflation, a measure of inflation that strips out volatile fuel and food, remains relatively stagnant even as expectations of higher nationwide inflation rose a small amount in September. The Cleveland Federal Reserve announced today that the public expects average annual inflation to be 1.4 percent over the next ten years, up from 1.37 last month. That’s significantly lower than the unofficial target of the Federal Reserve, which is 2 percent.

The Western states had the lowest amount of headline inflation in the past year, with the highest being in the South which experienced a 4.1 percent increase.

… As crop prices pushed toward record highs in 2011, farmland values have followed. After slowing somewhat during the 2007-09 recession, cropland has surged since 2010, with values jumping 20 percent or more compared to a year earlier. In some cases, fertile land that sold for $6,000 an acre in 2009 is now going for $12,000 an acre.

But, this surge in farmland values has raised some concerns about its sustainability. Recent figures from the U.S. Department of Agriculture show that while farmland values have risen 40 percent since 2004, cash rents have risen only 17 percent. …

“The apparent decoupling of land values and rents suggests that other factors could be driving the farmland value surge,” said Jason Henderson, vice president and Omaha branch executive at the Kansas City Fed. “One of these factors could be interest rates, which remain at historically low levels and are likely helping drive the rise in land values.”

Despite strong export demands and tight supplies, corn and wheat prices have doubled since June 2010. According to the report, much of the export demand is due to countries such as China, “where rising incomes, improved diets and a weaker dollar are making U.S. agricultural exports more attractive.”

… For now, agriculture market observers don’t see a high probability that crop prices will fall soon. … As a result, aggressive bidding at land auctions appears to remain in play for at least the near term. …

The full report is embedded below:

Growing Value: Is the farmland boom sustainable?

Among the targets: Conservative donor David Koch, media mogul Rupert Murdoch and JPMorgan Chase CEO Jamie Dimon. The march plays into the broader themes of the 99 Percent movement by directly confronting leaders of the business and financial elite. It also specifically condemned Gov. Andrew Cuomo’s (D) proposal of a cap property taxes thought to benefit New York’s highest earners.

But Dimon has another connection to economic policy apart from his wealth, his politics and his role as head of a major financial firm: He sits on the Board of Directors of the New York Federal Reserve, one of the most important economic policymaking institutions in the country.

Dimon is a “Class A” director on the New York Fed board, meaning he is a banker who was chosen by the New York Fed’s member banks to represent them on the board. Under the Dodd-Frank financial regulation law, “Class A” directors no longer have a role in selecting the president of the regional Feds, but they did have that power during the first three years of Dimon’s tenure on the board.

When it comes to the Fed’s power to stimulate the economy by boosting spending, Dimon has mostly been a supporter. He endorsed “quantitative easing” and keeping short-term interest rates low. However, he has also been one of the leading proponents of the view that many of the current economic problems are caused by too much government regulation.

In the minds of many Wall Street observers, Dimon’s name is strongly associated with the financial crisis of 2007-2008. It was JPMorgan that initially developed the type of credit derivative that caused the failure of multiple financial firms, although JPMorgan itself managed to escape mostly unscathed from the crisis because it wasn’t as exposed as other firms.

Dimon has been a strong critic of financial regulation in the post-crisis era. He has called for the United States to withdraw from the Basel international regulatory regime after a raise was made to the minimum amount of capital that banks are required to keep on their books. He called the new rules “anti-American.” And he has publicly speculated that sluggish U.S. job growth is caused by new financial regulations from the federal government since 2008.

Most economists point to insufficient capital as the reason why so many financial firms failed or were bailed out by the government during the crisis. The New York Federal Reserve, as one of the institutions charged with regulating Wall Street banks, approved Wall Street’s use of credit derivatives, contracts that transfer risk from one financial firm to another. Wall Street banks used derivatives as a way to free up capital that they were otherwise required to keep on their books as insurance against a loan failing.

Since the crisis, Dimon has also been very involved in politics. He has close ties with the Obama administration and for a while had open access to Treasury Secretary Tim Geithner, who was president of the New York Fed during Dimon’s first three years on the board.

Many say that Dimon’s close relationship with Obama officials has cooled, and he has recently met with Republican presidential candidate Mitt Romney, who has surpassed President Obama as the biggest recipient of Wall Street campaign contributions in 2012.

Here’s video of the “Millionaires’ March” getting ready to head to Dimon’s house:

As TAI has reported, bankers and business executives chosen by the member banks dominate the board of directors of the Federal Reserve banks. These boards choose the bank presidents, some of which vote in the Federal Open Market Committee (FOMC), the Fed’s policy committee responsible for voting on coordinated Federal Reserve action.

That institutional relationship has given private bankers a lever by which to influence debates about inflation and interest rates. Three of the five bank presidents on the Committee have joined together in an unprecedented move and dissented from the Fed’s modest efforts to reduce unemployment. Many have put the onus on them to take more dramatic action to turn around the economy and reduce private debt levels.

Occupy movements are expected to camp out in front of Regional Fed Banks in Dallas, San Francisco, Boston, Chicago, Kansas City, and Philadelphia.

Some economists believe that the Federal Reserve can do even more to boost spending and ease debt burdens. These critics argue that the Federal Reserve should announce that it will continue to inject money into the economy until unemployment is low again, even if that means higher inflation.

Conservatives, including the four highest-ranked Republicans in Congress, have called on the Federal Reserve to abandon its unemployment mandate and focus on keeping prices low. They say using the Federal Reserve to reduce unemployment will cause harmful inflation.

But economists at the Cleveland Federal Reserve say inflation is currently expected to average at only 1.37 percent per year for the next decade, an historic low. Inflation is also not always a bad thing, in particular for people with a lot of debt because it causes the value of the debt to decline over time. But because banks are the lenders to whom the money is owed, they dislike inflation for precisely that reason.

This is why today’s march to the Dallas Fed will have particular significance for the “We are the 99 percent” movement to end banker influence over the economy. In a recent speech, Richard Fisher, president of the Dallas Fed and current FOMC member, said: “I believe the foremost duty of any central banker is to ensure price stability.” That’s a rejection of the Federal Reserve’s legal requirement to pay attention to the unemployed as well as inflation.

The Federal Reserve has the power to increase total spending in the economy. Normally it does this by targeting lower interest rates. This is when the Fed buys Treasury bonds from banks and keeps buying them there’s enough money in the system for the banks to lend at the targeted rate.

Since the crisis began, the Fed has also tried “quantitative easing”, buying bonds which last longer in order to push down interest rates for bigger investments. This is particularly helpful for some struggling homeowners, who are desperate to refinance their mortgages so that they can avoid default. But easing has slowed down, and the most recent Fed action, “Operation Twist”, merely rearranges some of the Fed’s balance sheet without aggressively committing to new stimulus.

The “99 percenters” can hope that their “occupation” will change the central bankers’ minds.

Economists and consumer groups aren’t the only parties signing off on the idea.

From the article:

Renowned economist Stephen Roach, currently non-executive chairman of Morgan Stanley Asia, has gone a step further, calling for Wall Street to get behind what others have called a “Debt Jubilee” to forgive excess mortgage and credit card debt for some borrowers. The notion of a Debt Jubilee dates back to biblical Israel where debts were forgiven every 50 years or so. In an August appearance on CNBC, Roach said debt forgiveness would help consumers get through “the pain of deleveraging sooner rather than later.” (here)

[…]

“If there is something constructive that can be done it should be,” said Ash Williams, executive director of the Florida State Board of Administration, which oversees $145 billion in public investments and pension money. “You don’t want to reward bad behavior and you don’t want to reward people who were irresponsible. But if there is a way to do well by doing good, then let’s take a look at it.”

[…]

Kenneth Rogoff, professor of economics and public policy at Harvard University and former chief economist at the International Monetary Fund, has said the ongoing crisis should be called the “Second Great Contraction” because households remain highly leveraged. He says the high level of consumer debt is what distinguishes this from other recessionary periods.

So far, stimulus packages have come in the form of tax cuts, mortgage-relief measures and activities by the Federal Reserve to keep borrowing rates low. But those efforts have been unable to countervail the full effects of the economic downturn.

The 2009 stimulus program has come close to adding or keeping four million jobs — the intended result at the time of law’s passage — but over eight million jobs were lost in late 2008 and early 2009. Road projects and the auto rescue were the chief players in keeping more Americans off unemployment insurance.

Debt forgiveness ideas have been swirling since the recession began. One popular proposal is to allow college graduates to write off their loans, the argument being income not spent on paying down borrowed money for tuition will instead lead to big ticket purchases like cars and homes.

That approach, however, has many economists scratching their heads — most college graduates are higher income earners and are more likely to save than persons who earn less. The best stimulus value involves low-income earners because that cohort spends more of its paycheck on standard goods; crudely, they’re more likely to spend the money a government program hands them.

The Fed, meanwhile, has engaged in monetary policy in an attempt to drive debt down and encourage lending. But with interest rates near zero, the Fed has hit a wall, and appears unwilling to raise interest rates as a way of lowering the unemployment rates. Higher inflation encourages more investment as the rate of return jumps, helping create new jobs.

From Reuters:

Such a measure could help the economy by temporarily allowing greater inflation, reducing the debt burden of businesses and consumers and giving them added incentive to spend by pushing the dollar down.

Read more of The American Independent’s coverage of the Fed, including an in-depth look at the voting dynamics within the Federal Reserve.

Two days prior to the vote, the top four GOP leaders in Congress sent a letter to Federal Reserve Chair Ben Bernanke urging the FOMC to refrain from using monetary policy to stimulate the economy. The letter garnered considerable controversy since it was made public on Tuesday, given it represents an unusual attempt by the leaders of a political party to influence the Federal Reserve. Senate Majority Whip Dick Durbin (D-Ill.) told The Hill the letter was “wrong-headed” and quoted a former Fed official who said it was “outrageous” that the Fed receive “direct political communications from Republican leaders.”

However, three FOMC members appear to agree with Republican leaders, voting against Wednesday’s statement announcing “operation twist.” These members are Richard Fisher, Narayana Kocherlakota and Charles Plosser. According to the FOMC statement, they ”did not support additional policy accommodation at this time.” These members are also three of the five regional Fed presidents who currently sit on the FOMC, alongside Bernanke and four members of the Federal Reserve Board. Two other seats on the Board are currently vacant because President Obama’s nominees to fill the positions have yet to be confirmed by the Senate.

Voting on the FOMC has traditionally been very close to unanimous in order to avoid the perception that its decisions are politicized. Transcripts of FOMC meetings are released on a five-year lag in order to disconnect their deliberations from day-to-day politics. The fact that Bernanke and Federal Reserve Board member Elizabeth Duke, both originally appointed by Republican President George W. Bush, have voted in favor of the easing policies that Republican leaders vociferously oppose throws the dissenting votes from regional Fed presidents into sharp contrast with the Board members’ commitment to consensus.

A flash graphic from Reuters that rates where each Committee member stands in relation to the recent easing decisions confirms the regional Fed presidents are systemically more “hawkish,” or fearful of inflation, than the other members:

(Image via Thomson Reuters)

Construction of regional Fed boards

Regional Fed presidents are chosen by the boards of each of the regional Federal Reserve banks. These nine-member boards are divided into three “classes.” Class A and B are appointed by the “member banks” — private banks that are shareholders in the regional Fed. Class A board members are chosen “to represent member banks.” Class B board members are chosen to “represent the public.” Class C members are appointed by the national Federal Reserve Board. The Federal Reserve Act stipulates that both Class B and Class C members “shall be elected … with due but not exclusive consideration to the interests of agriculture, commerce, industry, services, labor, and consumers.”

Under the Dodd-Frank financial regulatory reform bill, Class A board members no longer have any role in selecting class presidents, which under the letter of the law suggests that presidents are now exclusively chosen by “representatives of the public.” In theory, Class B board members are considered representatives of the business community, and Class C board members are considered representatives of the public interest. In practice, current and former business executives dominate both classes in many of the regional banks.

Minneapolis, Dallas and Philadelphia Fed boards

Narayana Kocherlakota, president of the Minneapolis Federal Reserve Bank, was selected for his position by a board whose current Class B and Class C members are exclusively CEOs. Five are from for-profit companies, one is from a nonprofit HMO.

The chair of the Minneapolis Fed board, John Marvin, is the CEO and chairman of Marvin Windows and Doors. According to the Center for Responsive Politics, he has personally donated to the campaigns of Sen. John Hoeven (R-N.D.), former Sen. Norm Coleman (R-Minn.), Rep. Erik Paulsen (R-Minn.), the Republican National Committee and former Minn. Gov. Tim Pawlenty’s PAC, Freedom First.

The American Independent has determined that, in the past two years, four of the nine Minneapolis Fed board members have disclosed donating exclusively to Republican candidates and party organizations, two have disclosed giving to both Republican and Democratic candidates and one has disclosed donating exclusively to Democrats. The remaining two have not contributed enough to political campaigns to warrant disclosure.

The board of the Dallas Federal Reserve bank, which appointed Richard Fisher, is chaired by the co-founder and former CEO of Southwest Airlines, Herb Kelleher. He leads a board that includes three other current or former executives (one is the president of J.C. Penney), the president of the University of Houston and a finance professor, as well as the three Class A banker members. Three board members disclosed donating exclusively to Republicans and one only to Democrats. Kelleher himself was a McCain supporter who has also donated to Democratic candidates.

Charles Plosser is president of the Philadelphia Fed., whose board currently consists of five current or former executives of for-profit companies and one president of a philanthropic foundation. One board member has disclosed donating exclusively to Republicans, one only to Democrats and three to both parties.

It’s worth noting New York Fed chair William Dudley, who voted in favor of yesterday’s statement, was appointed by a board with greater diversity than many of the other regional Fed boards — none of the New York Fed Class C members are CEOs of for-profit companies — but business executives still have all three Class B seats. And Chicago Fed President Charles Evans, who has been one of the loudest voices on the committee for the Fed taking an even stronger role in promoting economic growth, answers to a board whose Class C members are all CEOs.

The fact that anti-stimulus Fed leaders were selected by boards dominated by business executives is at the heart of Democratic Rep. Barney Frank’s proposal for reforming the Committee, wherein the four members of the Committee not from Washington would be appointed by the President of the United States, just as the other Committee members are.