Tuesday, April 1, 2008

Government's "Fed" Overhaul a Huge Con Job

The Federal Reserve sounds like a solid branch of the "Federal" government, doesn't it? So putting the banks, the markets, the economy in the hands of the "objective, fair" U.S. government of which the Presidentially-appointed Alan Greenspan was appointed Chairman for decades, ah, this should put things in order, right? Most Americans think the "Feds" are Federal as in Federal government. No. They are "Federal" as in "Federal Express." It's a private corporation. Welcome to government by the "New Corporate People".

Here's one take from Ellen Hodges Brown on the huge and significant Bush/Cheney plan to "consolidate" the sectors of our economy:

The Federal Reserve, which has been credited with creating the current housing
bubble and bust just as it created the credit bubble of the Roaring Twenties and
the bust of 1929, is now to be given vast new powers to oversee regulation of
the banking industry and promote "financial market stability."

Worse, there will be even less regulation than before, according to the Wall Street Journal:

Many of the [Treasury's] proposals, like those that would consolidate
regulatory agencies, have nothing to do with the turmoil in financial
markets. And some of the proposals could actually reduce regulation. ...
The blueprint also suggests several areas where the S.E.C. should take a
lighter approach to its oversight. Among them are allowing stock exchanges
greater leeway to regulate themselves and streamlining the approval of new products
, even allowing automatic approval of securities products that are
being traded in foreign markets. ...
While the plan could expose Wall Street investment banks and hedge funds to
greater scrutiny, it carefully avoids a call for tighter regulation. The plan
would not rein in practices that have been linked to the housing and mortgage crisis, like packaging risky subprime mortgages into securities carrying the highest ratings. . . .
And the plan does not recommend tighter rules over the vast and largely
unregulated markets for risk sharing and hedging, like credit default swaps,
which are supposed to insure lenders against loss but became a speculative
instrument themselves and gave many institutions a false sense of security.

So it is not designed to fix or even help the economy, the one that's heading into a recession or worse, but rather to allow banks greater leeway in order to be "more competitive" in the "global market". Somehow, devaluation of US currency and a downward economic spiral don't sound like good ways to be "competitive" in any market. It sounds like a snake-oil scheme designed to serve old, white, rich men in self-deluded power and wealth that doesn't really exist.
As Ms. Brown so eloquently summarizes:
And as the falling debris of the American economy still piles up around us,
the very agency that enabled disaster is now seeking to consolidate ultimate
authority and accountability to itself, and through centralization and
arrogation of power, eliminate all those pesky little Constitutional and State
regulations and agencies, recalcitrant governors and the last few whistle
blowers, so that the further abuse of power can be streamlined through one
agency only. That agency is to consist of an alliance of the banking powers and the executive branch, a perfect formula for the institutionalization of continual abuse.

Meanwhile, the cost of basic necessities like wheat, oil, corn, milk, meat, and everything else, spikes so fast people are reeling. And as usual, the poor get poorer, the hungry get hungrier, the rich get more disconnected from reality, and the military gets more wars to eat. Is it too late to turn this thing back?

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