Who owns the Fed? No, really who owns the Federal Reserve?

Inevitably while exploring the nature of our frail financial system one gets awfully suspicious of the big bad federal reserve, an institution created by several bankers and politicians at the turn of the century in order to avoid banking panics.  Several core tasks of the Federal Reserve were to preserve and maintain the health of the American economy and avoid banking panics the likes of 1908.  A secondary and rather subjective task was to preserve the integrity of the US Dollar.  After eleven recessions, a great depression and the current financial crisis one would agree that the Fed failed.  Worse yet, since 1913 (The Fed's creation) the dollar has lost 95% of it's value, so that is another second failure. 

A catastrophic failure of such proportion would send most private corporations into exile and permanent banishment, but since the Fed is the creation of Congress and the Fed's members are partially appointed by our Government - continued failure can be tolerated.  If screwing up everything from the Post office, Medicare, Medicaid and Social Security did not result in our government from hanging it's head in shame - then I doubt the Fed's failure will be any different.

However there are plenty of people who are more suspicious of the Fed and cannot imagine that our Government can screw up everything.  Furthermore the failure to understand that our Government can essentially create money out of thin air for the purpose of funding entitlement programs, wars and anything else they desire makes the rest of us poorer.  They demand answers, specifically who owns the Federal Reserve and who profits from our demise.  These conspiracy theorists would like you to believe that a powerful international banking elite owns the Fed and profits from our woes.  It is usually a ragtag combination of anti-Semite nuts who run around with outdated charts proving that powerful Jewish families are in charge of the Fed and profit not only from each dollar "printed", but interest collected. 

For a wonderful and detailed explanation of these conspiracy theories, consult Bill Woolsey's piece.
For the most part, all you need to know is:

Who owns the Fed? The owners of a business typically have ultimate authority over operations and serve as residual claimant. Stockholders elect directors, who appoint top management. Stockholders receive the profits — excess revenues after all other claims on funds are paid.

For the Fed, final authority is in the hands of the politicians. They appoint the Board of Governors, who dominate the Federal Reserve banks. Further, any earnings of the Federal Reserve banks beyond expenses, including the 6% dividend to the member banks, goes to the U.S. Treasury. Since the U.S. government has final authority and serves as residual claimant, the most reasonable view is that the Federal Reserve system is government-owned.

The conspiracy theorists' claim that private owners of the Fed are making bundles of money is false. The conventional view among economists (including libertarian ones) that the Fed is a government operation that partially finances fiscal deficits by money creation is fundamentally correct. The live question among libertarians is how to get the government out of the banking system — perhaps by truly privatizing the Fed's operations — in a way that prevents inflation and macroeconomic instability.

Here Occam's Razor applies.  If something is wrong, does not seem right then look for the heavy hand of Government and you will usually find your culprit.  We need to strip the Government's ability to create money out of thin air, abolish the Federal Reserve and return to a free-market banking system once envisioned by our founding fathers.   Not because of some conspiracy nuts who lack basic economic understanding, but because having a Fed centrally planning the nerve system of our so-called free market economy is ludicrous and economically unfeasible. 

If you are still dying to know who REALLY owns the Fed, or rather who are the shareholders then you can find the list of all 121 banks here of the NY Fed (as of 2006).  The rest of the member banks will probably have a similar structure, but the NY Fed is the most prominent and important of the member banks.