This American Life has an article on and a recording of the program 536: The Secret Recordings of Carmen Segarra.

An unprecedented look inside one of the most powerful, secretive institutions in the country. The NY Federal Reserve is supposed to monitor big banks. But when Carmen Segarra was hired, what she witnessed inside the Fed was so alarming that she got a tiny recorder and started secretly taping.

This story was developed in partnership with Pro Publica. I reported on their coverage in the previous post Inside the New York Fed: Secret Recordings and a Culture Clash.

The quibble I had with how the other report ended is thoroughly covered in This American Life audio. This coverage makes it quite clear that Segarra was willing to come out with a public compromise with her supervisors even though she told them in confidence that she did not agree with them.

I hope that Senator Elizabeth Warren makes as big a deal over this issue as she possibly can. As soon as Eric Holder is out of the Department of Justice, perhaps we can get some investigation of this from the highest levels.

It is clear from this, that the people who are concerned about the Fed and “who watches the watchers” are quite right to be demanding more oversight of the Fed. This is not a call to do away with the Fed, nor is it a call to rein them in. It is quite the opposite. It is a recognition that the FED is not doing its job diligently enough. There needs to be a systemic change in the organizational structure that makes it impossible for the FED to hide its failures to do its job.