Just when you think the Obama White House couldn’t find any more power to seize… what with already successful takeovers of banks, Wall Street CEO salaries, auto industries, the energy industry with cap and trade, health care and his proposed Medicare czars, and seizing control from the CIA over terrorist interrogations… Boston.com lets us know what Barney Frank has been tasked with – “…assembling a complex bill to give the federal government unprecedented control over the country’s financial institutions.”
And the ambitious agenda – catering to Obama’s agenda – will be creating the unlikely bedfellows of the Barney Frank liberal/progressive faction and the Ron Paul supporters.
Frank says the legislation is necessary to help fend off future episodes of financial panic. Hedge funds and derivatives traders would have to operate under new limits. A financial products safety commission would regulate the consumer marketplace, down to payday loans and check-cashing stores. Federal officials would gain new powers to unwind failed financial institutions.
In addition, Frank hopes to secure congressional auditing authority over the secretive Federal Reserve, a proposal he describes with phrases – “Ron Paul agrees with that’’ and “secondly, Ron Paul agrees with this’’ – that are jarring coming from a liberal Democrat. He comes close to smiling when describing his narrow alliance with the cranky Texas libertarian and former presidential candidate who is on the committee and whose distrust for the Federal Reserve has led him to propose abolishing the paper money system.
Of course, the omnipotent Treasury Secretary, Tim Geithner, has been complaining that this additional power seize is long overdue, complaining that the federal regulators were “… slowing the bill’s progress with skeptical comments about a proposal to establish a new authority to monitor investment risk.”
Frank, who elsewhere has had kind words for two of George W. Bush’s nominees, Federal Deposit Insurance Commission chairwoman Sheila Bair and Federal Reserve chairman Ben Bernanke, said the administration should not be shocked by the officials’ response.
“They don’t want to lose their control,’’ said Frank. “What a surprise: Regulators don’t want to lose turf.’’
It all sounds so perfectly harmless, most will say. Shouldn’t there be Congressional oversight over the consumer marketplace? And for those who recognize the flaws of the Federal Reserve, this should be right up their alley.
Geithner’s comments and insistence at such increased Congressional oversight is particularly poignant. You all should be reminded that TARP… all that cash for which Geithner is responsible? … *has* “oversight” in the form of SIGTARP (Special Inspector General of TARP). His name is Neil Barofsky, and it was only a few weeks ago that he was complaining that Geithner’s Treasury was ignoring their advice, and refusing valuation data on a monthly basis.
The U.S. Treasury Department ignores advice on how to help the public better understand how banks are using hundreds of billions of dollars of taxpayer funds they were given, the government’s bailout watchdog said Monday.
Neil Barofsky, the Special Inspector General for the $700 billion Troubled Asset Relief Program (TARP), said in a report that Treasury has made only limited steps toward implementing recommendations that his office has made.
“It has repeatedly failed to adopt recommendations that SIGTARP believes are essential to providing basic transparency,” Barofsky said, noting that Treasury won’t even put a value on its TARP portfolio.
“Notwithstanding that Treasury has now retained asset managers and is receiving such valuation data on a monthly basis, Treasury has not committed to providing such information except on the statutorily required annual basis,” he said.
Barofsky also said that in the case of so-called public-private partnership funds, which will buy toxic assets from banks using a substantial portion of taxpayer-provided money, Treasury was not willing to make timely disclosures on trading activity, holdings and value of the assets the partnerships will hold.
“Not only should this disclosure be required as a matter of basic transparency in light of the billions of taxpayer dollars at stake, but such disclosure would also serve well one of Treasury’s stated reasons for the program in the first instance: the promotion of ‘price discovery’ in the illiquid market for MBS (mortgage-backed securities),” Barofsky said.
“Treasury has indicated it will not require such disclosure,” he added.
Apparently, Geithner is one of those “do what I say, not what I do” types….
Then, of course, there’s the irony of picking Barney Frank to lead *any* kind of financial reform. Or as Michelle Malkin put it:
Last time I checked Barney Frank’s financial oversight record was the pits. Only in Beltway Bizarro World does such an epic failure get rewarded with even more expansive powers to screw things up.
Michelle was referring to, in part, Barney’s incestuous relationship with Fannie/Freddie… with yet more being revealed with the FOIA documents obtained by Judicial Watch.
uh yeah…. that fox still has a rigor mortis grip on the hen house door handle.
But it can be said that Barney’s appointed task of Obama financial reform… or increased power over the consumer marketplace… is not a new one. Indeed, most of the Congressional and WH battles is not that it should, or should not be done. They all love these new found power they can pass over the US taxpayer so easily. Instead, they are battling over who *gets* the power to supervise the largest financial firms… the Federal Reserve, or Congress.
The administration wants the Federal Reserve to do this, supported by a council of regulators that keeps a lookout for emerging risks. But lawmakers on both sides worry that the central bank is already too powerful, or that expanding its role would undermine its monetary credentials. Barney Frank, the House financial-services committee’s ebullient chairman, has criticised plans to draw up a list of firms that are “too big to fail”, fearing it will entrench them.
So how much will this notion of “reform”… a word from this admin that should make everyone’s blood run cold in itself… reach into the average citizen’s life? How about mortgages and credit? Obama’s admin wants control over them because they think too much of financial “safety” instead of “treatment of customers”.
ummmm…. why does this start smelling like a wide spread CRA ‘tude?
The loudest opposition has been reserved for a proposed consumer-protection agency, which would write and enforce rules for mortgages, credit cards and so forth. This is needed, the administration argues, because bank regulators are inclined to focus on safety rather than the treatment of customers—even if they have recently become, in Mr Frank’s words, “born-again consumer advocates”, rushing out new curbs on predatory lending as their turf has come under threat.
Lawmakers would like to support the new agency—there are votes in championing the little guy. But banks, including politically powerful community lenders, have stoked fears that the new regulator could become an unwieldy monster and that its mandate to make products simpler could constrain credit. Existing regulators have weighed in too, arguing that separating prudential regulation from consumer protection could make the system less safe. A House vote on the agency, scheduled for July, has been postponed until September because of lukewarm support.
No matter how one views it, it will be yet another bureaucratic government behemoth that will be expensive, inefficient, wields far too much power and will make deplorable decisions. But hey… it’s what Obama wants, so Barney hikes up his baggy pants, and does the deed.
And, as usual, the US economy and the consumer will be paying the price for yet another transfer of power to the inept.
Vietnam era Navy wife, indy/conservative, and an official California escapee now residing as a red speck in the sea of Oregon blue.