I know that you have laughed, as I have laughed, at the notion being floated that if we don’t allow obscene bonuses at financial institutions, there may be an “exodus of talent.”

REALLY? Then let’s cut out ALL bonuses as soon as possible, so the greedy idiots that set up the financial crisis we’re now suffering through make a hasty exit from the financial business. With any luck, maybe they’ll go overseas and wreck THEIR economies, for a change.

I take that back….. that would be tantamount to an act of war. But you know what I mean.

The same stupid argument that asshats are making for bonuses is now being transferred to greater oversight of the Fed. NOOOO, we can’t infringe on their independence! Why, that might be disastrous!

Really….. someone, ANYONE, please… tell me how they could do any WORSE because of oversight. How could checking their activities lead to anything worse than we’ve already seen?

Senate Banking Committee Chairman Christopher Dodd’s sweeping new financial overhaul legislation, which proposes to strip the Federal Reserve of its authority to regulate banks, threatens the central bank’s time-honored independence and its premier international standing, experts warn.

Critics counter, however, that the Fed pumped trillions of dollars into the economy to combat the recent financial crisis with virtually no direct authority to do so, and no effective oversight from publicly accountable branches of government. They argue that the Fed should be subjected to democratic checks and balances, just as other powerful arms of government are.

Under Dodd’s proposed bill, the Fed would lose its power to regulate banks and to issue rules affecting mortgages and other forms of consumer credit. Dodd, D-Conn., would combine several existing bank regulators into a single new Financial Institutions Regulatory Administration.

That approach would be similar to Britain’s Financial Services Authority, which guards against risks to the financial system and leaves monetary policy to the Bank of England, the British central bank. Dodd reasons that the Fed and other bank regulators didn’t foresee the coming financial storm because they were too close to the banks they oversee.

Dodd called the Fed’s regulatory record an “abysmal failure” and said it should concentrate on its primary mission of conducting monetary policy to promote its twin goals of restraining inflation and promoting full employment.

His approach differs greatly from the Obama administration’s and the legislation going soon before the House of Representatives. Both would empower two bank regulatory agencies and give the Fed more power, not less.

Which approach is right? There isn’t consensus, even among former Fed governors.

“I am with Dodd on this one,” said Alice Rivlin, a former vice chairman of the Fed from 1996 to 1999. “The Fed has not distinguished itself as a regulator.”

Rivlin said that bank regulation is too fragmented, which creates opportunities for banks to shop for the weakest regulator.

“I think Dodd is right to consolidate bank regulation and not put it at the Fed,” she said. “The Fed needs to concentrate on its role as central bank.”

On the other side, Rivlin’s former colleague Laurence Meyer, a Fed governor from 1996 to 2002, called the Dodd legislation “political posturing” by a “hate the Fed crowd.” He warned that taking the most experienced regulators off the supervisory beat “increases the risk of crisis going forward.”

What’s indisputable is this: the Fed is at a crossroads, and in the crosshairs of Congress like a deer in hunting season.

Another sign of this is a bill by Fed critic Rep. Ron Paul, R-Texas, to have the Government Accountability Office — the auditing arm of Congress — audit the Fed’s operations. That measure now has at least 307 supporters in the House and 30 or more in the Senate. Paul’s book “End the Fed” is a national best seller.

Ron Paul is exactly right on this one. The Fed is comprised of Governors who tend to have come right from the firms that created this crisis. The cronyism of the Fed with the greedy asshats of Wall Street meant that they were able to play like a gambling addict at the crap tables, and the Fed was right there next to them, cheering them on. People like me, a barefoot hillbilly, were screaming YEARS AGO that a collapse was a certainty-but all those financial wizards didn’t know a thing about it.

I believe I could regulate better than the Fed does. They sure don’t have a record with which to prove me wrong.

Tags: chris dodd, failure, federal reserve, financial crisis

This entry was posted on Thursday, November 12th, 2009 at 8:38 pm and is filed under Jolly Roger, The Republican Depression of 2008-?. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.