Sticky Fingers ObaMarx Grabbing For More Economic Power – Even Internationally…
Obama wants his unprecedented historic power grab before he leaves office and the crisis window is closing soon. Obama’s plan Wednesday will officially call for the supervision of global financial firms through supervisory colleges.
The Obama administration this week will propose the most significant new regulation of the financial industry since the Great Depression, including a new watchdog agency to look out for consumers’ interests.
Under the plan, expected to be released Wednesday, the government would have new powers to seize key companies — such as insurance giant American International Group Inc. — whose failure jeopardizes the financial system. Currently, the government’s authority to seize companies is mostly limited to banks.
But critics say the easing of the financial crisis that gripped the country last year appears to have reduced the momentum for some of the most far-reaching proposals, such as merging several banking regulatory agencies.
The administration’s move to seize greater power over the financial industry is quite frankly… making me seize. This is so incredibly unconstitutional and will completely crush the economy. The banks are already too tight on lending and Obama wants to regulate them more – makes tons of sense!/sarc. Too many regulations on the free market make it completely dysfunctional – can we not let capitalism work? Why is it that difficult?
What’s worse? This new push for regulation will also give the Federal Reserve additional power and control. The Federal Reserve, as many of us already realize, has been behind many of the economic collapses/recessions in this country, since it’s creation in 1913.
The Federal Reserve, already arguably the most powerful agency in the U.S. government, will get sweeping new authority to regulate any company whose failure could endanger the U.S. economy and markets under the Obama administration’s regulatory overhaul plan.
Just what we need, an entity accountable to no one, not even an auditing agency…
To understand Obama’s intentions we could also take a look back at his G20 plan from a couple months prior:
The Financial Stability Board then has the international authority to set policies in these corporations, including compensation packages the private boards of directors in the examined companies decide to pay top executives and senior managers.
Morris charged that the Obama administration, by agreeing to create the Financial Stability Board, has gone beyond nationalizing U.S. corporations, to “internationalize” U.S.-based corporations under the control of this new global regulator.
While the G20 focused on regulating risks in hedge funds and derivatives, the authority of the Financial Stability Board extends to any banking, brokerage or business practice by a major U.S. corporation that the Financial Stability Board on its own authority determines is unduly risky.
Under the premise that the IMF and the Financial Stability Board would have the ability to make loans to important U.S. corporations, the IMF and the Financial Stability Board become the effective global regulators over the corporate world, superseding all U.S. governmental authorities, including the Federal Reserve, the U.S. Treasury, the Federal Deposit Insurance Corporation and a host of corporate regulators, including the U.S. Department of Commerce and the U.S. Department of Labor.
So Obama says no meddling in Iran but, we can meddle in Capitalism around the globe…? Huh?
Mo’ Money; Mo’ Power: Geithner to Change Regulation Rules
Treasury Secretary Timothy Geithner told lawmakers that the changes are needed to fix the flaws exposed by the current financial crisis, the worst to hit the country in seven decades.
The goal is to repair a system that has proven “too unstable and fragile,” he said.
“Over the past 18 months, we have faced the most severe global financial crisis in generations,” Geithner said in testimony to the House Financial Services Committee. “To address this will require comprehensive reform. Not modest repairs at the margin, but new rules of the game.”
The administration’s proposal, which will require congressional approval, would represent a major expansion of federal authority over the financial system. It would impose tougher standards on financial institutions judged to be so big that their failure would represent a risk to the entire system.
It also would extend federal regulations for the first time to all trading in financial derivatives, exotic financial instruments such as credit default swaps that were blamed for much of the damage in the meltdown.
The administration also wants larger hedge funds to be required to register with the Securities and Exchange Commission.
In addition, the administration proposed the creation of a systemic risk regulator to monitor the biggest institutions. Geithner did not designate where such authority should reside, but the administration is expected to support awarding this power to the Federal Reserve.
The plan also includes a measure that Geithner and Fed Chairman Ben Bernanke discussed before the committee on Tuesday to give the administration expanded powers to take over major nonbank financial institutions, such as insurance companies and hedge funds that were teetering on the brink of collapse.
Should hedge funds be regulated? Of course they should, but the issue is whether or not they will be, since they have so much control on Capitol Hill. I also have a major concern with those who are stating they will have the oversight responsibility or who really want these regulations. The Federal Reserve, Geithner, Bernake, Barney Frank, Obama, etc. are all responsible for the collapse of the market and had a major role to play in it. Why would I want any of these yahoos having accountability and responsibility for oversight and business management?
Most of these players received kickbacks from Wall Street and hedge fund managers – there is a major principle-agent issue here (conflict of interest).
I have a feeling this is all fancy rhetoric to hide what is really going on here… The nationalization of banks and possibly the intent to nationalize more than financial institutions. The government wants complete power and control to shape society – welcome to Statism.
Regulation, Regulation, Regulation!
I do agree with some of what needs to be regulated or at least made more transparent, such as hedge funds, hybrid securities/derivatives and higher capital requirements for financial institutions. My issue is who and what entities will be overseeing these regulations. My major concern is the amount of regulation and the constitutionality of it all, especially a possible plan to regulate executive pay and moving towards pay caps… this is another slippery slope we are embarking on. Here are some excerpts:
The new rules will cover all financial institutions, including those not now covered by any pay rules because they are not receiving U.S. government bailout money. Officials say the rules could also be applied more broadly to publicly traded companies, which already report about some executive pay practices to the Securities and Exchange Commission. Last month, as part of the stimulus package, Congress barred top executives at large banks getting rescue money from receiving bonuses exceeding one-third of their annual pay.
Beyond the pay rules, officials said the regulatory plan is expected to call for a broad new role for the Federal Reserve to oversee large companies, including major hedge funds, whose problems could pose risks to the entire financial system.
It will propose that many kinds of derivatives and other exotic financial instruments that contributed to the crisis be traded on exchanges or through clearinghouses so they are more transparent and can be more tightly regulated. Read more
