Ayn Rand's Ugly Step Child

[Kevin_Kennedy]

I love how the government loosened up a little bit on the banking industry, and because the banks fucked up, all the sudden that was a "free market" that should be considered a complete failure. Like it was only the banks' fault, too.

Nevermind the rest of the stifling regluations that were still in place everywhere else though.

Like the government hasn't been in bed with the banks since the friggin beginning of the practice of lending.

We're all just idiots that could never possibly figure out what's best for ourselves, right?

Not to mention the banking industry itself is a complete fraud propped up by the federal government. Fractional reserve banking couldn't exist on a truly free market for very long.

 

[Paulie]

I love how the government loosened up a little bit on the banking industry, and because the banks fucked up, all the sudden that was a "free market" that should be considered a complete failure. Like it was only the banks' fault, too.

Nevermind the rest of the stifling regluations that were still in place everywhere else though.

Like the government hasn't been in bed with the banks since the friggin beginning of the practice of lending.

We're all just idiots that could never possibly figure out what's best for ourselves, right?

Not to mention the banking industry itself is a complete fraud propped up by the federal government. Fractional reserve banking couldn't exist on a truly free market for very long.

It's been done since around 1100 AD. Goldsmiths started learning that people who deposited their gold for notes hardly ever came in to demand their metal back, so they started making more notes than the amount of gold they had on reserve, and lent them out at interest.

You can't continue making it work though if on a gold standard because a run on the banks would cause instant collapse of such a system. So enter fiat money with centralized control, and VIOLA! you've figured out to make it work in perpetuity.

So long as you have the military to cram it down the rest of the world's throat, of course.

 

[MaggieMae]

And the market can regulate itself.

That's nonsense, especially in light of the recent catastrophe. Here is where Randism, and therefore your own argument, fails:

"A source of mild entertainment amid the financial carnage has been watching libertarians scurrying to explain how the global financial crisis is the result of too much government intervention rather than too little. Like all true ideologues, libertarians find a way to interpret mounting evidence of error as proof that they were right all along.

They are intellectually immature, frozen in the worldview many of them absorbed from reading Ayn Rand novels in high school. Their heroic view of capitalism makes it difficult for them to accept that markets can be irrational, misunderstand risk, and misallocate resources, or that financial systems without vigorous government oversight and the capacity for pragmatic intervention constitutes a recipe for disaster...."
~~ Jacob Weisber, Slate.com

You want to talk about an argument that fails, let's start with the argument that the government can magically regulate us into prosperity. It's never happened, and it's not going to happen now.

Also, the fact that makes that quote look absolutely ridiculous is the fact that libertarians, and Austrian economists in particular, are really the only group that predicted this crisis as a whole.

Looks like somebody didn't even believe their own.

http://www.oecd.org/dataoecd/6/63/20209194.pdf

 

[MaggieMae]

Then don't call it what it isn't.

I think anymore the term "free market" is just a catch-all phrase meaning capitalism. I use the phrase lots of times, but I certainly don't mean it in the context of bartering or x-number of beaver pelts for 20 pieces of gold with no sheriff looking on to make sure the transaction is fair.

If there's not a real free market, and never was, then how can it be opposed?

The 'free market' you see around you is not free. If you ever knew anyone who's business was stifled because of the regulations that control its particular industry, you might understand where I'm coming from.

How does a small medical company compete with Merck, or J&J for instance? I'm invested in a small little company that makes a product that could compete with, and take market share from, products like Tylenol.

They are hurdled with FDA regulations, advertising regulations, etc. And if we're fortunate enough to get approval from the FDA, we're almost assuredly going to get bought out by one of the big fish. We'll never get to see $50 per share like the J&J's of the world.

I understand where some regulations are necessary, but the anti-free market people don't seem to put much thought into how much some regulations actually STIFLE competition and create anything BUT a free market.

I think your example is how public demand drives this whole picture. People want to be assured that products are safe, and we all know from experience that dog-earred brands of products won't stand by their name. (Not suggesting your Tylenol replica is dog-earred, though). But too, what if your competitive product did prove to be harmful? As a small company, would it be able to survive a flurry of lawsuits?

I too wish there were more competition, in some areas, but not in others. BUT, I would want the same assurances. I hate monopolies and I hate mergers which result in mega-corporations that are then able to push out all competition. I hate the fact that my bank has gone through 3 takeovers in 10 years, each time promising the same services, but which ultimately only creates an impersonal and unreachable behemoth ruled by higher echelon which doesn't give a twit about the concerns of individual customers. But did I, personally, have a voice in such mergers? I had to leave it up to the shareholders. Did they act any more in my interest than government regulators do?

 

[MaggieMae]

I love how the government loosened up a little bit on the banking industry, and because the banks fucked up, all the sudden that was a "free market" that should be considered a complete failure. Like it was only the banks' fault, too.

Nevermind the rest of the stifling regluations that were still in place everywhere else though.

Like the government hasn't been in bed with the banks since the friggin beginning of the practice of lending.

We're all just idiots that could never possibly figure out what's best for ourselves, right?

Not to mention the banking industry itself is a complete fraud propped up by the federal government. Fractional reserve banking couldn't exist on a truly free market for very long.

It's been done since around 1100 AD. Goldsmiths started learning that people who deposited their gold for notes hardly ever came in to demand their metal back, so they started making more notes than the amount of gold they had on reserve, and lent them out at interest.

You can't continue making it work though if on a gold standard because a run on the banks would cause instant collapse of such a system. So enter fiat money with centralized control, and VIOLA! you've figured out to make it work in perpetuity.

So long as you have the military to cram it down the rest of the world's throat, of course.

So what's the alternative? No country's economy can survive today without the flow of credit.

 

[Paulie]

I think anymore the term "free market" is just a catch-all phrase meaning capitalism. I use the phrase lots of times, but I certainly don't mean it in the context of bartering or x-number of beaver pelts for 20 pieces of gold with no sheriff looking on to make sure the transaction is fair.

If there's not a real free market, and never was, then how can it be opposed?

The 'free market' you see around you is not free. If you ever knew anyone who's business was stifled because of the regulations that control its particular industry, you might understand where I'm coming from.

How does a small medical company compete with Merck, or J&J for instance? I'm invested in a small little company that makes a product that could compete with, and take market share from, products like Tylenol.

They are hurdled with FDA regulations, advertising regulations, etc. And if we're fortunate enough to get approval from the FDA, we're almost assuredly going to get bought out by one of the big fish. We'll never get to see $50 per share like the J&J's of the world.

I understand where some regulations are necessary, but the anti-free market people don't seem to put much thought into how much some regulations actually STIFLE competition and create anything BUT a free market.

I think your example is how public demand drives this whole picture. People want to be assured that products are safe, and we all know from experience that dog-earred brands of products won't stand by their name. (Not suggesting your Tylenol replica is dog-earred, though). But too, what if your competitive product did prove to be harmful? As a small company, would it be able to survive a flurry of lawsuits?

I too wish there were more competition, in some areas, but not in others. BUT, I would want the same assurances. I hate monopolies and I hate mergers which result in mega-corporations that are then able to push out all competition. I hate the fact that my bank has gone through 3 takeovers in 10 years, each time promising the same services, but which ultimately only creates an impersonal and unreachable behemoth ruled by higher echelon which doesn't give a twit about the concerns of individual customers. But did I, personally, have a voice in such mergers? I had to leave it up to the shareholders. Did they act any more in my interest than government regulators do?

My company's product isn't a medicine, it's a wearable device that kills pain. It's had to spend a lot of money on clinical trials to prove that it not only has 100% safety, but also high enough efficacy to pass the FDA's strict regulations.

It uses electromagnetic frequencies, so I understand the need to prove safety. I don't oppose all regulations, they are authorized as per the interstate commerce clause in the constitution.

The problem is that the government has USED the ability to regulate and gone way overboard, which has created the ability for the multi-national conglomerates of the world to have the ADVANTAGE when regulations are made stricter.

You do realize the corporate lobbyists more often than not LOBBY FOR more regulation in an industry? Why do you think that is?

As for your post about the flow of credit, the only reason you can make that argument NOW is because it's become so mainstream all around the world that it seems like an impossibility to most people to move away from it.

It's been done for so long and its what our world financial system is based on. I guess we can't change anything now becuase we were trapped into it simply by virtue of being born during this time period.

 

[MaggieMae]

If there's not a real free market, and never was, then how can it be opposed?

The 'free market' you see around you is not free. If you ever knew anyone who's business was stifled because of the regulations that control its particular industry, you might understand where I'm coming from.

How does a small medical company compete with Merck, or J&J for instance? I'm invested in a small little company that makes a product that could compete with, and take market share from, products like Tylenol.

They are hurdled with FDA regulations, advertising regulations, etc. And if we're fortunate enough to get approval from the FDA, we're almost assuredly going to get bought out by one of the big fish. We'll never get to see $50 per share like the J&J's of the world.

I understand where some regulations are necessary, but the anti-free market people don't seem to put much thought into how much some regulations actually STIFLE competition and create anything BUT a free market.

I think your example is how public demand drives this whole picture. People want to be assured that products are safe, and we all know from experience that dog-earred brands of products won't stand by their name. (Not suggesting your Tylenol replica is dog-earred, though). But too, what if your competitive product did prove to be harmful? As a small company, would it be able to survive a flurry of lawsuits?

I too wish there were more competition, in some areas, but not in others. BUT, I would want the same assurances. I hate monopolies and I hate mergers which result in mega-corporations that are then able to push out all competition. I hate the fact that my bank has gone through 3 takeovers in 10 years, each time promising the same services, but which ultimately only creates an impersonal and unreachable behemoth ruled by higher echelon which doesn't give a twit about the concerns of individual customers. But did I, personally, have a voice in such mergers? I had to leave it up to the shareholders. Did they act any more in my interest than government regulators do?

My company's product isn't a medicine, it's a wearable device that kills pain. It's had to spend a lot of money on clinical trials to prove that it not only has 100% safety, but also high enough efficacy to pass the FDA's strict regulations.

It uses electromagnetic frequencies, so I understand the need to prove safety. I don't oppose all regulations, they are authorized as per the interstate commerce clause in the constitution.

The problem is that the government has USED the ability to regulate and gone way overboard, which has created the ability for the multi-national conglomerates of the world to have the ADVANTAGE when regulations are made stricter.

You do realize the corporate lobbyists more often than not LOBBY FOR more regulation in an industry? Why do you think that is?

As for your post about the flow of credit, the only reason you can make that argument NOW is because it's become so mainstream all around the world that it seems like an impossibility to most people to move away from it.

It's been done for so long and its what our world financial system is based on. I guess we can't change anything now becuase we were trapped into it simply by virtue of being born during this time period.

I agree. We just have to be resilient, just like Americans always have been. I do think, however, that a major shift has occurred in the mindset of the individual consumer regarding the flow of credit (i.e., it eventually catches up with us), and hopefully sometime in the future that will carry over to the entire world of finance. Eventually, the plug will be pulled completely.

 

[Kevin_Kennedy]

That's nonsense, especially in light of the recent catastrophe. Here is where Randism, and therefore your own argument, fails:

"A source of mild entertainment amid the financial carnage has been watching libertarians scurrying to explain how the global financial crisis is the result of too much government intervention rather than too little. Like all true ideologues, libertarians find a way to interpret mounting evidence of error as proof that they were right all along.

They are intellectually immature, frozen in the worldview many of them absorbed from reading Ayn Rand novels in high school. Their heroic view of capitalism makes it difficult for them to accept that markets can be irrational, misunderstand risk, and misallocate resources, or that financial systems without vigorous government oversight and the capacity for pragmatic intervention constitutes a recipe for disaster...."
~~ Jacob Weisber, Slate.com

You want to talk about an argument that fails, let's start with the argument that the government can magically regulate us into prosperity. It's never happened, and it's not going to happen now.

Also, the fact that makes that quote look absolutely ridiculous is the fact that libertarians, and Austrian economists in particular, are really the only group that predicted this crisis as a whole.

Looks like somebody didn't even believe their own.

http://www.oecd.org/dataoecd/6/63/20209194.pdf

I'm hoping this post was a joke, but if it's not I'll clarify why the Austrian economists are called Austrian in the first place. The Austrian school of economics is not the mainstream in Austria today, and the most notable Austrian economists of the day aren't even Austrian themselves. Ron Paul, Peter Schiff, Lew Rockwell, Thomas Woods, Robert Murphy, Hans-Hermann Hoppe, Jesús Huerta de Soto, Jörg Guido Hülsmann, etc... The Austrian school headquarters, the Ludwig von Mises Institute, is based in Auburn, Alabama here in the U.S. The reason it's called the Austrian school is because those who developed this branch of economic thought were Austrians. Carl Menger, Eugen von Böhm-Bawerk, Ludwig von Mises, and then continued by Friedrich von Hayek.

Obviously what goes on in Austria today has nothing to do with the Austrian school of economics.

 

[MaggieMae]

You want to talk about an argument that fails, let's start with the argument that the government can magically regulate us into prosperity. It's never happened, and it's not going to happen now.

Also, the fact that makes that quote look absolutely ridiculous is the fact that libertarians, and Austrian economists in particular, are really the only group that predicted this crisis as a whole.

Looks like somebody didn't even believe their own.

http://www.oecd.org/dataoecd/6/63/20209194.pdf

I'm hoping this post was a joke, but if it's not I'll clarify why the Austrian economists are called Austrian in the first place. The Austrian school of economics is not the mainstream in Austria today, and the most notable Austrian economists of the day aren't even Austrian themselves. Ron Paul, Peter Schiff, Lew Rockwell, Thomas Woods, Robert Murphy, Hans-Hermann Hoppe, Jesús Huerta de Soto, Jörg Guido Hülsmann, etc... The Austrian school headquarters, the Ludwig von Mises Institute, is based in Auburn, Alabama here in the U.S. The reason it's called the Austrian school is because those who developed this branch of economic thought were Austrians. Carl Menger, Eugen von Böhm-Bawerk, Ludwig von Mises, and then continued by Friedrich von Hayek.

Obviously what goes on in Austria today has nothing to do with the Austrian school of economics.

Yes, meant to be funny.

 

[MaggieMae]

Kevin, if you can get past the fact that this is a proposal by a Democrat, and Chris Dodd of all people, what do you think of it? A step in the right direction? (I have no opinion, yet. I'd like to see more discussion.)

Senate Dems move to curb Fed's powers
By ANNE FLAHERTY, Associated Press Writer Anne Flaherty, Associated Press Writer
Tue Nov 10, 5:17 pm ET

WASHINGTON – Senate Democrats on Tuesday proposed stripping the Federal Reserve of its supervisory powers and creating instead three new federal agencies to police banks, protect consumers and dismantle failing institutions.

The 1,136-page bill, released by Senate Banking Committee Chairman Chris Dodd, would represent a significant shift in power in federal oversight of the U.S. market. The Fed has been a dominant figure in managing the economy, although many lawmakers blame the central bank for not doing enough to prevent last year's crisis.

"We saw over the last number of years when (the Fed) took on consumer protection responsibilities and the regulation of bank holding companies, it was an abysmal failure," said Dodd, a Connecticut Democrat.

Dodd's proposal prompted cheers from consumer advocates and other Democrats, including Sen. Mark Warner, D-Va., an influential moderate who said swift action was necessary to prevent future government bailouts of big banks.

"Never again should the American taxpayers have to hear about 'too big to fail,' where the American taxpayer has to pick up the slack," Warner said.

But the financial industry quickly pushed back.

The bill "would produce conflicts among regulators, undermine the state-chartered banking system and impose extensive new regulatory burdens on those banks that had nothing to do with creating the financial crisis," said Edward Yingling, president of the American Bankers Association.

While Republicans were expected to oppose much of the bill, Sen. Bob Corker, a Tennessee Republican on Dodd's committee, issued a statement setting an optimistic tone.

"I'm more hopeful than I was a few weeks ago that we will be able to come up with a bipartisan bill," said Corker, who has worked closely with Warner on banking issues.

Among the top points of contention is Dodd's desire to create a Consumer Financial Protection Agency to protect consumers taking out home loans or using credit cards against predatory lending and surprise interest rate hikes.

Republicans and industry officials say that creating another bureaucracy will make it harder for banks to do business and would limit the availability of credit.

Other provisions in Dodd's bill would:

• Consolidate federal supervision of banks under a "Financial Institutions Regulatory Administration."

• Abolish the Office of the Comptroller of the Currency and the Office of Thrift Supervision, and strip the Federal Deposit Insurance Corporation and the Fed of their bank supervision duties.

• Create an "Agency for Financial Stability" that would enforce new rules and dismantle complex financial firms if they threaten the broader economy.

• Regulate privately traded derivatives, hedge funds and other private pools of capital so that regulators have a sense of how much risk is being assumed by financial firms.

• Impose new rules on investment rating agencies.

• Limit the Fed's ability to provide emergency loans to mostly healthy institutions, instead of failing firms.

The Senate Banking Committee was expected to take up the legislation next week and vote by early December. Dodd said he expects to need Republican support to get the bill through Congress and that he remains optimistic consensus could be reached.

The bill will also have to be reconciled with the House version. Rep. Barney Frank, chairman of the House Financial Services Committee, said he expects a floor vote in December on his proposal.

Like Dodd, Frank wants to strip the Fed of its consumer protection powers and create a separate agency dedicated to the mission. Both House and Senate bills also would limit the Fed's ability to provide emergency loans and create a council of regulators to monitor the risks posed by large financial firms.

But the House bill wouldn't consolidate federal banking supervision and would ultimately put the Fed in charge of enforcing new requirements for large and influential firms.

Frank said Dodd's announcement on Tuesday confirmed that "we are moving in the same direction" and will enact legislation soon.

Senate Dems move to curb Fed's powers - Yahoo! News

 

[Kevin_Kennedy]

Kevin, if you can get past the fact that this is a proposal by a Democrat, and Chris Dodd of all people, what do you think of it? A step in the right direction? (I have no opinion, yet. I'd like to see more discussion.)

Senate Dems move to curb Fed's powers
By ANNE FLAHERTY, Associated Press Writer Anne Flaherty, Associated Press Writer
Tue Nov 10, 5:17 pm ET

WASHINGTON – Senate Democrats on Tuesday proposed stripping the Federal Reserve of its supervisory powers and creating instead three new federal agencies to police banks, protect consumers and dismantle failing institutions.

The 1,136-page bill, released by Senate Banking Committee Chairman Chris Dodd, would represent a significant shift in power in federal oversight of the U.S. market. The Fed has been a dominant figure in managing the economy, although many lawmakers blame the central bank for not doing enough to prevent last year's crisis.

"We saw over the last number of years when (the Fed) took on consumer protection responsibilities and the regulation of bank holding companies, it was an abysmal failure," said Dodd, a Connecticut Democrat.

Dodd's proposal prompted cheers from consumer advocates and other Democrats, including Sen. Mark Warner, D-Va., an influential moderate who said swift action was necessary to prevent future government bailouts of big banks.

"Never again should the American taxpayers have to hear about 'too big to fail,' where the American taxpayer has to pick up the slack," Warner said.

But the financial industry quickly pushed back.

The bill "would produce conflicts among regulators, undermine the state-chartered banking system and impose extensive new regulatory burdens on those banks that had nothing to do with creating the financial crisis," said Edward Yingling, president of the American Bankers Association.

While Republicans were expected to oppose much of the bill, Sen. Bob Corker, a Tennessee Republican on Dodd's committee, issued a statement setting an optimistic tone.

"I'm more hopeful than I was a few weeks ago that we will be able to come up with a bipartisan bill," said Corker, who has worked closely with Warner on banking issues.

Among the top points of contention is Dodd's desire to create a Consumer Financial Protection Agency to protect consumers taking out home loans or using credit cards against predatory lending and surprise interest rate hikes.

Republicans and industry officials say that creating another bureaucracy will make it harder for banks to do business and would limit the availability of credit.

Other provisions in Dodd's bill would:

• Consolidate federal supervision of banks under a "Financial Institutions Regulatory Administration."

• Abolish the Office of the Comptroller of the Currency and the Office of Thrift Supervision, and strip the Federal Deposit Insurance Corporation and the Fed of their bank supervision duties.

• Create an "Agency for Financial Stability" that would enforce new rules and dismantle complex financial firms if they threaten the broader economy.

• Regulate privately traded derivatives, hedge funds and other private pools of capital so that regulators have a sense of how much risk is being assumed by financial firms.

• Impose new rules on investment rating agencies.

• Limit the Fed's ability to provide emergency loans to mostly healthy institutions, instead of failing firms.

The Senate Banking Committee was expected to take up the legislation next week and vote by early December. Dodd said he expects to need Republican support to get the bill through Congress and that he remains optimistic consensus could be reached.

The bill will also have to be reconciled with the House version. Rep. Barney Frank, chairman of the House Financial Services Committee, said he expects a floor vote in December on his proposal.

Like Dodd, Frank wants to strip the Fed of its consumer protection powers and create a separate agency dedicated to the mission. Both House and Senate bills also would limit the Fed's ability to provide emergency loans and create a council of regulators to monitor the risks posed by large financial firms.

But the House bill wouldn't consolidate federal banking supervision and would ultimately put the Fed in charge of enforcing new requirements for large and influential firms.

Frank said Dodd's announcement on Tuesday confirmed that "we are moving in the same direction" and will enact legislation soon.

Senate Dems move to curb Fed's powers - Yahoo! News

Well I'm not a Republican anymore than I'm a Democrat so I don't care whether it's a Democratic proposal or not, but it's true I'm no fan of Chris Dodd.

At any rate, I support stripping the Fed of its power, but I do not support giving that power to other government agencies. We need to get government out of the way, not simply switch which part of the government does what. This is simply Dodd trying to make up for his complicity in the housing bust by putting it on the Fed because he knows he's got a tough re-election campaign coming up next year. He's right it's mostly the Fed's fault but he's been a part of the problem as well. But this really wouldn't change anything in the end.

 

[Paulie]

All I have to say is if it weren't for Ron Paul and his becoming a house name, none of this kind of stuff from the likes of Dodd or Frank would EVER be happening.

The Ron Paul movement opened up people's eyes to the potential damage that the Fed can do and got them picking their phones up and making calls.

NO WAY Dodd proposes this, absent the Paul movement.

 

[MaggieMae]

Kevin, if you can get past the fact that this is a proposal by a Democrat, and Chris Dodd of all people, what do you think of it? A step in the right direction? (I have no opinion, yet. I'd like to see more discussion.)

Senate Dems move to curb Fed's powers
By ANNE FLAHERTY, Associated Press Writer Anne Flaherty, Associated Press Writer
Tue Nov 10, 5:17 pm ET

WASHINGTON – Senate Democrats on Tuesday proposed stripping the Federal Reserve of its supervisory powers and creating instead three new federal agencies to police banks, protect consumers and dismantle failing institutions.

The 1,136-page bill, released by Senate Banking Committee Chairman Chris Dodd, would represent a significant shift in power in federal oversight of the U.S. market. The Fed has been a dominant figure in managing the economy, although many lawmakers blame the central bank for not doing enough to prevent last year's crisis.

"We saw over the last number of years when (the Fed) took on consumer protection responsibilities and the regulation of bank holding companies, it was an abysmal failure," said Dodd, a Connecticut Democrat.

Dodd's proposal prompted cheers from consumer advocates and other Democrats, including Sen. Mark Warner, D-Va., an influential moderate who said swift action was necessary to prevent future government bailouts of big banks.

"Never again should the American taxpayers have to hear about 'too big to fail,' where the American taxpayer has to pick up the slack," Warner said.

But the financial industry quickly pushed back.

The bill "would produce conflicts among regulators, undermine the state-chartered banking system and impose extensive new regulatory burdens on those banks that had nothing to do with creating the financial crisis," said Edward Yingling, president of the American Bankers Association.

While Republicans were expected to oppose much of the bill, Sen. Bob Corker, a Tennessee Republican on Dodd's committee, issued a statement setting an optimistic tone.

"I'm more hopeful than I was a few weeks ago that we will be able to come up with a bipartisan bill," said Corker, who has worked closely with Warner on banking issues.

Among the top points of contention is Dodd's desire to create a Consumer Financial Protection Agency to protect consumers taking out home loans or using credit cards against predatory lending and surprise interest rate hikes.

Republicans and industry officials say that creating another bureaucracy will make it harder for banks to do business and would limit the availability of credit.

Other provisions in Dodd's bill would:

• Consolidate federal supervision of banks under a "Financial Institutions Regulatory Administration."

• Abolish the Office of the Comptroller of the Currency and the Office of Thrift Supervision, and strip the Federal Deposit Insurance Corporation and the Fed of their bank supervision duties.

• Create an "Agency for Financial Stability" that would enforce new rules and dismantle complex financial firms if they threaten the broader economy.

• Regulate privately traded derivatives, hedge funds and other private pools of capital so that regulators have a sense of how much risk is being assumed by financial firms.

• Impose new rules on investment rating agencies.

• Limit the Fed's ability to provide emergency loans to mostly healthy institutions, instead of failing firms.

The Senate Banking Committee was expected to take up the legislation next week and vote by early December. Dodd said he expects to need Republican support to get the bill through Congress and that he remains optimistic consensus could be reached.

The bill will also have to be reconciled with the House version. Rep. Barney Frank, chairman of the House Financial Services Committee, said he expects a floor vote in December on his proposal.

Like Dodd, Frank wants to strip the Fed of its consumer protection powers and create a separate agency dedicated to the mission. Both House and Senate bills also would limit the Fed's ability to provide emergency loans and create a council of regulators to monitor the risks posed by large financial firms.

But the House bill wouldn't consolidate federal banking supervision and would ultimately put the Fed in charge of enforcing new requirements for large and influential firms.

Frank said Dodd's announcement on Tuesday confirmed that "we are moving in the same direction" and will enact legislation soon.

Senate Dems move to curb Fed's powers - Yahoo! News

Well I'm not a Republican anymore than I'm a Democrat so I don't care whether it's a Democratic proposal or not, but it's true I'm no fan of Chris Dodd.

At any rate, I support stripping the Fed of its power, but I do not support giving that power to other government agencies. We need to get government out of the way, not simply switch which part of the government does what. This is simply Dodd trying to make up for his complicity in the housing bust by putting it on the Fed because he knows he's got a tough re-election campaign coming up next year. He's right it's mostly the Fed's fault but he's been a part of the problem as well. But this really wouldn't change anything in the end.

I think I heard Ron Paul say that it's a step in the right direction.

 

[Kevin_Kennedy]

Kevin, if you can get past the fact that this is a proposal by a Democrat, and Chris Dodd of all people, what do you think of it? A step in the right direction? (I have no opinion, yet. I'd like to see more discussion.)

Senate Dems move to curb Fed's powers
By ANNE FLAHERTY, Associated Press Writer Anne Flaherty, Associated Press Writer
Tue Nov 10, 5:17 pm ET

WASHINGTON – Senate Democrats on Tuesday proposed stripping the Federal Reserve of its supervisory powers and creating instead three new federal agencies to police banks, protect consumers and dismantle failing institutions.

The 1,136-page bill, released by Senate Banking Committee Chairman Chris Dodd, would represent a significant shift in power in federal oversight of the U.S. market. The Fed has been a dominant figure in managing the economy, although many lawmakers blame the central bank for not doing enough to prevent last year's crisis.

"We saw over the last number of years when (the Fed) took on consumer protection responsibilities and the regulation of bank holding companies, it was an abysmal failure," said Dodd, a Connecticut Democrat.

Dodd's proposal prompted cheers from consumer advocates and other Democrats, including Sen. Mark Warner, D-Va., an influential moderate who said swift action was necessary to prevent future government bailouts of big banks.

"Never again should the American taxpayers have to hear about 'too big to fail,' where the American taxpayer has to pick up the slack," Warner said.

But the financial industry quickly pushed back.

The bill "would produce conflicts among regulators, undermine the state-chartered banking system and impose extensive new regulatory burdens on those banks that had nothing to do with creating the financial crisis," said Edward Yingling, president of the American Bankers Association.

While Republicans were expected to oppose much of the bill, Sen. Bob Corker, a Tennessee Republican on Dodd's committee, issued a statement setting an optimistic tone.

"I'm more hopeful than I was a few weeks ago that we will be able to come up with a bipartisan bill," said Corker, who has worked closely with Warner on banking issues.

Among the top points of contention is Dodd's desire to create a Consumer Financial Protection Agency to protect consumers taking out home loans or using credit cards against predatory lending and surprise interest rate hikes.

Republicans and industry officials say that creating another bureaucracy will make it harder for banks to do business and would limit the availability of credit.

Other provisions in Dodd's bill would:

• Consolidate federal supervision of banks under a "Financial Institutions Regulatory Administration."

• Abolish the Office of the Comptroller of the Currency and the Office of Thrift Supervision, and strip the Federal Deposit Insurance Corporation and the Fed of their bank supervision duties.

• Create an "Agency for Financial Stability" that would enforce new rules and dismantle complex financial firms if they threaten the broader economy.

• Regulate privately traded derivatives, hedge funds and other private pools of capital so that regulators have a sense of how much risk is being assumed by financial firms.

• Impose new rules on investment rating agencies.

• Limit the Fed's ability to provide emergency loans to mostly healthy institutions, instead of failing firms.

The Senate Banking Committee was expected to take up the legislation next week and vote by early December. Dodd said he expects to need Republican support to get the bill through Congress and that he remains optimistic consensus could be reached.

The bill will also have to be reconciled with the House version. Rep. Barney Frank, chairman of the House Financial Services Committee, said he expects a floor vote in December on his proposal.

Like Dodd, Frank wants to strip the Fed of its consumer protection powers and create a separate agency dedicated to the mission. Both House and Senate bills also would limit the Fed's ability to provide emergency loans and create a council of regulators to monitor the risks posed by large financial firms.

But the House bill wouldn't consolidate federal banking supervision and would ultimately put the Fed in charge of enforcing new requirements for large and influential firms.

Frank said Dodd's announcement on Tuesday confirmed that "we are moving in the same direction" and will enact legislation soon.

Senate Dems move to curb Fed's powers - Yahoo! News

Well I'm not a Republican anymore than I'm a Democrat so I don't care whether it's a Democratic proposal or not, but it's true I'm no fan of Chris Dodd.

At any rate, I support stripping the Fed of its power, but I do not support giving that power to other government agencies. We need to get government out of the way, not simply switch which part of the government does what. This is simply Dodd trying to make up for his complicity in the housing bust by putting it on the Fed because he knows he's got a tough re-election campaign coming up next year. He's right it's mostly the Fed's fault but he's been a part of the problem as well. But this really wouldn't change anything in the end.

I think I heard Ron Paul say that it's a step in the right direction.

Well I haven't heard him comment on it, but if this is true it's likely that he simply meant taking power from the Fed is good. I can't imagine him supporting some other federal agency having those same powers.

 

[Paulie]

Well I'm not a Republican anymore than I'm a Democrat so I don't care whether it's a Democratic proposal or not, but it's true I'm no fan of Chris Dodd.

At any rate, I support stripping the Fed of its power, but I do not support giving that power to other government agencies. We need to get government out of the way, not simply switch which part of the government does what. This is simply Dodd trying to make up for his complicity in the housing bust by putting it on the Fed because he knows he's got a tough re-election campaign coming up next year. He's right it's mostly the Fed's fault but he's been a part of the problem as well. But this really wouldn't change anything in the end.

I think I heard Ron Paul say that it's a step in the right direction.

Well I haven't heard him comment on it, but if this is true it's likely that he simply meant taking power from the Fed is good. I can't imagine him supporting some other federal agency having those same powers.

Just like he thinks the Fair Tax is a step in the right direction. I think he said he'd vote yes on fair tax simply because it removes the income tax, but he doesn't support it as a real solution.

I might be wrong about him saying he'd vote yes though. I know he said it was better than NOTHING.

 

[Kevin_Kennedy]

I think I heard Ron Paul say that it's a step in the right direction.

Well I haven't heard him comment on it, but if this is true it's likely that he simply meant taking power from the Fed is good. I can't imagine him supporting some other federal agency having those same powers.

Just like he thinks the Fair Tax is a step in the right direction. I think he said he'd vote yes on fair tax simply because it removes the income tax, but he doesn't support it as a real solution.

I might be wrong about him saying he'd vote yes though. I know he said it was better than NOTHING.

I heard him say he'd vote for the fair tax to replace the income tax as well, but that he'd ultimately want to get rid of that form of taxation as well. He'd rather abolish the income tax and replace it with nothing.

 

[The_Halfmoon]

when I first watched the program, I was like "oh no, people are going to blame this as a regulatory problem"

but it was NOT. It simply was not. The problem, first and foremost, was the excessive control the Fed had in the first place, which led it to lower interest rates far bellow what the market would have.

This was in part due to the fact that, at times of war (this was around 2001), low interest rates ease the borrowing load of the government. It was also in part due to the entire system of $USD recycling which requires continuous re-investment of dollars in USD assets.

Derivatives were the worst form of excess in terms of useless junk used to store excessive cash, another one being California and Nevada real estate, etc.

The crisis was clearly from the very beginning an issue of government over-stepping its bounds and dropping rates too low for too long. This created TOO MUCH MONEY IN THE MARKET. Which is the problem, first and foremost. All other problems were basically related to this one major issue.

Now I'm not saying I agree with everything Rand said, nor that regulation was not blocked by many people (because it is evident it was). But to assume Greenspan and the republicans genuinely believed Rand's ideas and attempted to genuinely implement them is akin to suggesting Stalin's actions are to be blamed on the writings of Marx, or the Nazis inherited Nietzsche's philosophy.

 

[Procrustes Stretched]

when I first watched the program, I was like "oh no, people are going to blame this as a regulatory problem"

but it was NOT. It simply was not. The problem, first and foremost, was the excessive control the Fed had in the first place, which led it to lower interest rates far bellow what the market would have.

This was in part due to the fact that, at times of war (this was around 2001), low interest rates ease the borrowing load of the government. It was also in part due to the entire system of $USD recycling which requires continuous re-investment of dollars in USD assets.

Derivatives were the worst form of excess in terms of useless junk used to store excessive cash, another one being California and Nevada real estate, etc.

The crisis was clearly from the very beginning an issue of government over-stepping its bounds and dropping rates too low for too long. This created TOO MUCH MONEY IN THE MARKET. Which is the problem, first and foremost. All other problems were basically related to this one major issue.

Now I'm not saying I agree with everything Rand said, nor that regulation was not blocked by many people (because it is evident it was). But to assume Greenspan and the republicans genuinely believed Rand's ideas and attempted to genuinely implement them is akin to suggesting Stalin's actions are to be blamed on the writings of Marx, or the Nazis inherited Nietzsche's philosophy.

You're wrong, but at leats you had the time to view things with a critical skill set. Maybe you can help transform this message board into something mirroring ... ahhh, on second thought...

I never suggested that Greenspan's actions (really a lack of actions and actions are what are being criticized by everyone) are to be blamed on Rand's writings. Greenspan agreed with and attempted to introduce her ideas into policy with disastrous results. MAybe you'd like to suggest giving more of that medicine to the dying patient because more of IT would be better?

 

[Kevin_Kennedy]

when I first watched the program, I was like "oh no, people are going to blame this as a regulatory problem"

but it was NOT. It simply was not. The problem, first and foremost, was the excessive control the Fed had in the first place, which led it to lower interest rates far bellow what the market would have.

This was in part due to the fact that, at times of war (this was around 2001), low interest rates ease the borrowing load of the government. It was also in part due to the entire system of $USD recycling which requires continuous re-investment of dollars in USD assets.

Derivatives were the worst form of excess in terms of useless junk used to store excessive cash, another one being California and Nevada real estate, etc.

The crisis was clearly from the very beginning an issue of government over-stepping its bounds and dropping rates too low for too long. This created TOO MUCH MONEY IN THE MARKET. Which is the problem, first and foremost. All other problems were basically related to this one major issue.

Now I'm not saying I agree with everything Rand said, nor that regulation was not blocked by many people (because it is evident it was). But to assume Greenspan and the republicans genuinely believed Rand's ideas and attempted to genuinely implement them is akin to suggesting Stalin's actions are to be blamed on the writings of Marx, or the Nazis inherited Nietzsche's philosophy.

You're wrong, but at leats you had the time to view things with a critical skill set. Maybe you can help transform this message board into something mirroring ... ahhh, on second thought...

I never suggested that Greenspan's actions (really a lack of actions and actions are what are being criticized by everyone) are to be blamed on Rand's writings. Greenspan agreed with and attempted to introduce her ideas into policy with disastrous results. MAybe you'd like to suggest giving more of that medicine to the dying patient because more of IT would be better?

Except that never occurred.

 

[Neubarth]

when I first watched the program, I was like "oh no, people are going to blame this as a regulatory problem"

but it was NOT.
... But to assume Greenspan and the republicans genuinely believed Rand's ideas and attempted to genuinely implement them is akin to suggesting Stalin's actions are to be blamed on the writings of Marx, or the Nazis inherited Nietzsche's philosophy.

You're wrong, but at leats you had the time to view things with a critical skill set. Maybe you can help transform this message board into something mirroring ... ahhh, on second thought...

I never suggested that Greenspan's actions (really a lack of actions and actions are what are being criticized by everyone) are to be blamed on Rand's writings. Greenspan agreed with and attempted to introduce her ideas into policy with disastrous results. MAybe you'd like to suggest giving more of that medicine to the dying patient because more of IT would be better?

Except that never occurred.

Having been an IT manager (Data Comm), I know that more IT is always the answer to work problems. The more IT the merrier.