Financial “Reform” – Us Versus Them Edition
My plan for reforming the financial system, which basically involves letting all the terrorists out of Guantanamo Bay and filling it up with the top executives of the Wall Street banks, doesn’t seem to be on the agenda. So I suspect that I’ll be spending a bit of time writing about the various financial reform plans. Since passing the health care “reform” bill, the Democrats seem to have found their balls and are now talking big about what sort of financial industry reform measure will make it through Congress:
The health care vote even prompted Mr. Frank to make a quip about the financial overhaul. “There are going to be death panels enacted by the Congress this year — but they’re death panels for large financial institutions that can’t make it,” he said. “We’re going to put them to death and we’re not going to do very much for their heirs. We will do the minimum that’s needed to keep this from spiraling into a broader problem.”
I’m a little hopey that Frank is playing it straight (pun intended!) as putting the big banks to death really is the minimum that’s needed, but somehow I doubt that’s going to happen. Timmeh!, of course, will fight to the death to protect the big banks from even the most trivial, but potentially effective, regulations. One idea is to change how the head of the NY Federal Reserve Bank is elected.
For example, as it stands now, the bank’s head is elected by a Board of Directors that consists primarily of the very banks that are being governed – that is, after all, how Timmeh got the job.
Currently, the New York Fed chief is chosen by the bank’s directors, six of whom are elected by member banks in that district. That, in fact, is how Geithner got his job as chief of the New York Fed before he was tapped to be treasury secretary by President Barack Obama.
Critics say that arrangement gives banks too much authority over the Fed, which regulates them. They point to JPMorgan Chase CEO Jamie Dimon, who today sits on the board of the New York Fed, which would be the lead agency deciding whether or not to bail out Dimon if JPMorgan were ever to look as though it might go the way of Lehman Brothers. Dodd agreed.
But in remarks on Monday at the American Enterprise Institute, Geithner objected to the idea. The Dodd proposal, he said, would change two things: who chooses the president of the New York Fed and the process for choosing members of its board of directors. “I’m enthusiastic about the latter, not so much about the former, in part because I think it would change the basic balance in the Fed,” Geithner said.
But it’s not just Dodd that thinks bringing a little accountability to NY Fed is a good idea:
But the ranking member of the Senate Banking Committee stands with Dodd on this. In an interview with The Huffington Post in October, Sen. Richard Shelby (R-Ala.) called the current New York Fed situation “an obvious conflict of interest.”
“It’s basically a case where the banks are choosing — or having a big voice in choosing — their regulator. It’s unheard of,” Shelby said.
And this is the NY Fed that put together the AIG bailout that funneled billions to Goldman Sachs, encouraged AIG and the SEC to withhold that information from the public, looked the other way while Lehman engaged in a massive, ongoing accounting fraud, and is the perch from which Timmeh suggested that the government guarantee every debt in the financial system (they ultimately guaranteed a little less than that, but not by much).
So, of course, the banksters don’t want to bring any real political accountability to the NY Fed. It could cause them problems with the Bailouts 4eva! gravy train.
And, as usual, Timmeh is going to bat for them instead of us.
Why does he still have a job? Oh yeah, it’s because we’re a banana republic ruled by banking oligarchs.