Sunday, May 17, 2009

Bank Regulation Case Pits Feds Against States

I wanted to get this up while it is still relatively timely. There is a little known court case going on right now that has potentially huge implications in the economy. I can assure you while main street probably isn't aware of this case, that money for this case is flowing in from every major special interest in the finance industry. This is how special interests dismantle our economy while the country seemingly is unaware of the consequences.

The Office of the Comptroller of the Currency and other federal regulators argue a position of more power of regulation to them. The states argue they should regulate banks. Banksters argue that having to deal with 51 regulators would be a near impossibility. And, so did Hank Paulson as Treasury Secretary. These clowns were asleep at the switch for the last thirty plus years. Literally. We have written numerous times that the last thing we should see is the oversight put together at the federal level for the very reason that the banks prefer this. There are countless reasons why but none of them virtuous.

We used to have interstate banking laws in this country which promoted competition and limited banking to the local level. Monied interests in this country have completely dismantled these laws by corrupting the law making process of our federal government.

In 1927 the McFadden Act prohibited branch banking across state lines. It was pro-competitive legislation (Unlike the anti-competitive, anti-capitalist system we have morphed into due to corruption) meant to put small or local banks on equal footing with national banks. Simply reinforcing the McFadden Act would help dismantle all of these systemic risks presented by mega banks.

You might think about something as it pertains to the productivity and efficiency in the economy that is always touted by Federal Reserve idgits and generally unthinking economists. A role of the government should be to instill inefficiencies into the market place. Or to prevent efficiencies on some level. This for the economy to operate most effectively. Think about this and we'll talk about it in a later post.

The title link is also here for those viewing in a reader.
posted by TimingLogic at 10:29 AM