Government Seeks To Introduce New Banking Regulation To Replace The Banking Regulation It Destroyed
I don't have a link for this post. I simply want to make a few stream of conscience remarks given President Obama has started to tackle the issue of bank regulation with his remarks today.
I've seen a lot of people make a lot of claims about the fact that bank innovation somehow has been front-running regulations. This is simply a preposterous lie perpetrated by those that are complicit in this crisis. We were harping about the deregulation of banking when bankers were supposedly kings of the universe. And, mind you, this dismantling has been going on for decades. Whether it is the regulation that allowed banks to become monopolies or regulation that kept banks from scheming with depositor's money or regulation that allowed banks to get into other businesses or regulation that stripped the states of regulatory banking power or regulation that kept banks from offering these 'innovations' of corruption, all were knowingly dismantled from the regulatory system. All. There is no lack of regulation. There is only a conscious and knowing dismantling of regulation by the Federal government.
When Treasury Secretary Paulson first publicly announce a new framework to provide a new and needed central regulator for banks, I refuted that notion on here. Paulson's plan was for a super regulator with total control. This type of structure defeats the concept of a democracy and regulatory checks. It will lead to substantially more abuses than it will fix. Our system of government must have checks and balances. The argument that our regulatory structure is fragmented is a non sequitur. It is akin to arguing that three branches of government are too fragmented and we should just give the next Adolph Hitler total control. It is absolutely no coincidence that a Wall Street banker turned Treasury Secretary wants a super regulator. And, the fact that the Federal government wants this structure is the very reason it should not be granted.
The main argument I hear for a super regulator is the overlap of responsibility or that the right hand doesn't know what the left hand is doing. Well, with regards to overlap, that is preposterous. If there is any, and there is likely little, then fix it. If a firm must prepare documentation for different regulators, deal with it. It provides a check against fraud and worked just fine during the greatest economic prosperity this country has ever experienced. That is, until we saw the final fraudulent dismantling of regulation. As it pertains to the left hand not knowing what the right hand is doing, this is absolutely ridiculous. Have you ever heard of a phone? The argument that the SEC doesn't know what the Federal Reserve is doing or that state regulators don't have the national scope is a ruse.
Transparency should be the primary design point for regulation. Transparency for the people. Society is just as likely to spot irregularities in both oversight and the market as a regulator. And, can voice ideas and potential red flags. As far as the left hand knowing what the right hand is doing, any first year computer science student knows how to develop a common data repository so that the SEC, the Treasury, the OCC, the Federal Reserve and the state regulators all have access to the same data and know what actions are being taken by the other departments.
To consolidate control is exactly what the banking crooks want. The Federal Reserve or any other department of government as a super regulator makes it easier for corruption to take place. Five agencies with different points of authority and oversight makes that nearly impossible. It's no coincidence banksters have been lobbying to remove these burdens under the ruse of it's too expensive to deal with. And, frankly, that brings up another point. The Federal government should never have complete authority of anything not explicitly granted in the Constitution. Case in point - were the Federal government not to have destroyed the interstate banking laws and usurped power from state regulators, we wouldn't be in this crisis. This entire environment has developed because of corruption perpetrated by private bankers lobbying our public officials with our very deposit money. To give bankers only one organization they have to lobby and manipulate is a bloodless coup d'etat.
We don't need any new regulatory structure. All we need to do is document the banking laws that have been destroyed over the last forty years by banking lobbyists and simply re-institute them. That's a lot cheaper and less open to manipulation than creating some new scheme. And, we know it works. Why? Because bankers spent billions defrauding it.
I've seen a lot of people make a lot of claims about the fact that bank innovation somehow has been front-running regulations. This is simply a preposterous lie perpetrated by those that are complicit in this crisis. We were harping about the deregulation of banking when bankers were supposedly kings of the universe. And, mind you, this dismantling has been going on for decades. Whether it is the regulation that allowed banks to become monopolies or regulation that kept banks from scheming with depositor's money or regulation that allowed banks to get into other businesses or regulation that stripped the states of regulatory banking power or regulation that kept banks from offering these 'innovations' of corruption, all were knowingly dismantled from the regulatory system. All. There is no lack of regulation. There is only a conscious and knowing dismantling of regulation by the Federal government.
When Treasury Secretary Paulson first publicly announce a new framework to provide a new and needed central regulator for banks, I refuted that notion on here. Paulson's plan was for a super regulator with total control. This type of structure defeats the concept of a democracy and regulatory checks. It will lead to substantially more abuses than it will fix. Our system of government must have checks and balances. The argument that our regulatory structure is fragmented is a non sequitur. It is akin to arguing that three branches of government are too fragmented and we should just give the next Adolph Hitler total control. It is absolutely no coincidence that a Wall Street banker turned Treasury Secretary wants a super regulator. And, the fact that the Federal government wants this structure is the very reason it should not be granted.
The main argument I hear for a super regulator is the overlap of responsibility or that the right hand doesn't know what the left hand is doing. Well, with regards to overlap, that is preposterous. If there is any, and there is likely little, then fix it. If a firm must prepare documentation for different regulators, deal with it. It provides a check against fraud and worked just fine during the greatest economic prosperity this country has ever experienced. That is, until we saw the final fraudulent dismantling of regulation. As it pertains to the left hand not knowing what the right hand is doing, this is absolutely ridiculous. Have you ever heard of a phone? The argument that the SEC doesn't know what the Federal Reserve is doing or that state regulators don't have the national scope is a ruse.
Transparency should be the primary design point for regulation. Transparency for the people. Society is just as likely to spot irregularities in both oversight and the market as a regulator. And, can voice ideas and potential red flags. As far as the left hand knowing what the right hand is doing, any first year computer science student knows how to develop a common data repository so that the SEC, the Treasury, the OCC, the Federal Reserve and the state regulators all have access to the same data and know what actions are being taken by the other departments.
To consolidate control is exactly what the banking crooks want. The Federal Reserve or any other department of government as a super regulator makes it easier for corruption to take place. Five agencies with different points of authority and oversight makes that nearly impossible. It's no coincidence banksters have been lobbying to remove these burdens under the ruse of it's too expensive to deal with. And, frankly, that brings up another point. The Federal government should never have complete authority of anything not explicitly granted in the Constitution. Case in point - were the Federal government not to have destroyed the interstate banking laws and usurped power from state regulators, we wouldn't be in this crisis. This entire environment has developed because of corruption perpetrated by private bankers lobbying our public officials with our very deposit money. To give bankers only one organization they have to lobby and manipulate is a bloodless coup d'etat.
We don't need any new regulatory structure. All we need to do is document the banking laws that have been destroyed over the last forty years by banking lobbyists and simply re-institute them. That's a lot cheaper and less open to manipulation than creating some new scheme. And, we know it works. Why? Because bankers spent billions defrauding it.
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