The Conservative Cave
Current Events => Politics => Topic started by: SSG Snuggle Bunny on December 30, 2009, 05:06:03 PM
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Hunkering down by the fire, I snuggled up with H.R. 4173, the financial-reform legislation passed earlier this month by the House of Representatives. The Senate has yet to pass its own reform plan. The baby of Financial Services Committee Chairman Barney Frank, the House bill is meant to address everything from too-big-to-fail banks to asleep-at-the-switch credit-ratings companies to the protection of consumers from greedy lenders.
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The reading was especially painful since this reform sausage is stuffed with more gristle than meat. At least, that is, if you are a taxpayer hoping the bailout train is coming to a halt.
If you’re a banker, the bill is tastier. While banks opposed the legislation, they should cheer for its passage by the full Congress in the New Year: There are huge giveaways insuring the government will again rescue banks and Wall Street if the need arises.
Nuggets Gleaned
Here are some of the nuggets I gleaned from days spent reading Frank’s handiwork:
-- For all its heft, the bill doesn’t once mention the words “too-big-to-fail,†the main issue confronting the financial system. Admitting you have a problem, as any 12- stepper knows, is the crucial first step toward recovery.
-- Instead, it supports the biggest banks. It authorizes Federal Reserve banks to provide as much as $4 trillion in emergency funding the next time Wall Street crashes. So much for “no-more-bailouts†talk. That is more than twice what the Fed pumped into markets this time around. The size of the fund makes the bribes in the Senate’s health-care bill look minuscule.
-- Oh, hold on, the Federal Reserve and Treasury Secretary can’t authorize these funds unless “there is at least a 99 percent likelihood that all funds and interest will be paid back.†Too bad the same models used to foresee the housing meltdown probably will be used to predict this likelihood as well.
More Bailouts
-- The bill also allows the government, in a crisis, to back financial firms’ debts. Bondholders can sleep easy -- there are more bailouts to come.
-- The legislation does create a council of regulators to spot risks to the financial system and big financial firms. Unfortunately this group is made up of folks who missed the problems that led to the current crisis.
-- Don’t worry, this time regulators will have better tools. Six months after being created, the council will report to Congress on “whether setting up an electronic database†would be a help. Maybe they’ll even get to use that Internet thingy.
-- This group, among its many powers, can restrict the ability of a financial firm to trade for its own account. Perhaps this section should be entitled, “Yes, Goldman Sachs Group Inc., we’re looking at you.â€
Managing Bonuses
-- The bill also allows regulators to “prohibit any incentive-based payment arrangement.†In other words, banker bonuses are still in play. Maybe Bank of America Corp. and Citigroup Inc. shouldn’t have rushed to pay back Troubled Asset Relief Program funds.
-- The bill kills the Office of Thrift Supervision, a toothless watchdog. Well, kill may be too strong a word. That agency and its employees will be folded into the Office of the Comptroller of the Currency. Further proof that government never really disappears.
-- Since Congress isn’t cutting jobs, why not add a few more. The bill calls for more than a dozen agencies to create a position called “Director of Minority and Women Inclusion.†People in these new posts will be presidential appointees. I thought too-big-to-fail banks were the pressing issue. Turns out it’s diversity, and patronage.
-- Not that the House is entirely sure of what the issues are, at least judging by the two dozen or so studies the bill authorizes. About a quarter of them relate to credit-rating companies, an area in which the legislation falls short of meaningful change. Sadly, these studies don’t tackle tough questions like whether we should just do away with ratings altogether. Here’s a tip: Do the studies, then write the legislation.
Consumer Protection
-- The bill isn’t all bad, though. It creates a new Consumer Financial Protection Agency, the brainchild of Elizabeth Warren, currently head of a panel overseeing TARP. And the first director gets the cool job of designing a seal for the new agency. My suggestion: Warren riding a fiery chariot while hurling lightning bolts at Federal Reserve Chairman Ben Bernanke.
-- Best of all, the bill contains a provision that, in the event of another government request for emergency aid to prop up the financial system, debate in Congress be limited to just 10 hours. Anything that can get Congress to shut up can’t be all bad.
http://www.bloomberg.com/apps/news?pid=20601039&sid=a48c8UpUMxKQ
Lurking liberals: no free-market capitalist conservative would permit this sort of market meddling. Just because we conservatives are pro-profit does NOT mean we are pro-meddling/bailout. Bad businesses are supposed to fail, big or otherwise. Even if your only concern is the number of common workers laid off bad businesses are replaced by good ones because while a business may have a bad model demand generally continues or at least shifts elsewhere.
This is YOUR congressman spending YOUR money for HIS pet constituency. This is invariably the result each and every time government meddles in the economy in any capacity beyond enforcing laws against force and fraud.
When are you people going to wake-up?
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Bailout Mania = Tulip Mania?
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All Aboard the Debt Train Death Spiral!
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Bailout Mania = Tulip Mania?
I try not to think about where Bawney Fwank's tulips have been.
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I try not to think about where Bawney Fwank's tulips have been.
:lmao:
:puke:
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(http://standupforamerica.files.wordpress.com/2009/07/barney-frank-chutzpah.jpg)
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I try not to think about where Bawney Fwank's tulips have been.
I'll second that...... :lmao:
Yep, old Bonnie Fwank has done so many pole dances with those tulips he can hardly talk anymore.
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With the age of many of the Democrat (and even most Republicans) Congresscritters and Senators, I have to wonder how much LSD these people took in the 60s. They have definitely been tripping since 2006, and some of them long before that.