29 March 2008
Free Markets No Longer Free
Posted by Joy Bischoff under: Constitution in Peril; World Economy .
We have discussed Free Trade in past blogs but there is one aspect to it that I do fully support. That is having the markets determine success. When a central bank takes control of the financial sector, Free Trade is no longer free. I am greatly disturbed by this news regarding the Fed being given increased powers.
This reminds me of when the federal government took over public schooling. When they come to the rescue with finances, they begin the control all aspects of the institution. Their regulations clearly eat into our Constitutional rights.
March 29, 2008
Treasury Dept. Plan Would Give Fed Wide New Power
By EDMUND L. ANDREWS
WASHINGTON — The Treasury Department will propose on Monday that Congress give the Federal Reserve broad new authority to oversee financial market stability, in effect allowing it to send SWAT teams into any corner of the industry or any institution that might pose a risk to the overall system.
The proposal is part of a sweeping blueprint to overhaul the nation’s hodgepodge of financial regulatory agencies, which many experts say failed to recognize rampant excesses in mortgage lending until after they set off what is now the worst financial calamity in decades.
Democratic lawmakers are all but certain to say the proposal does not go far enough in restricting the kinds of practices that caused the financial crisis. Many of the 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.
According to a summary provided by the administration, the plan would consolidate an alphabet soup of banking and securities regulators into a powerful trio of overseers responsible for everything from banks and brokerage firms to hedge funds and private equity firms.
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.
The plan would give the Fed some authority over Wall Street firms, but only when an investment bank’s practices threatened the entire financial system.
9 Comments so far...
Pickles Says:
29 March 2008 at 12:03 pm.
I might not know a whole lot compared to most of you but I do know that a powerful central bank is socialism.
wartman Says:
29 March 2008 at 12:31 pm.
Sharon Anderson Says:
29 March 2008 at 1:32 pm.
Hey, Wartman, you are so right (pun intended)!
And thanks for your comment. If you have posted before, I missed it (sorry about that), but if this is the first time (or even second, or third or ….) I hope we hear from you again.
So now Bush wants to give the FED MORE POWER?! I think this non-governmental agency which controls our currency and hence our economy and our country AND which is not accountable to the people or our representatives has far too much power already. There has got to be a better way to address the mess we are in. Like maybe back our currency with genuine assets (gold comes to mind) and restore the manufacturing base of our country which would restore real wealth and could address our massive trade deficit. Instead, they keep creating more dollars and giving them to whomever they deem worthy recipients. Then we and our posterity will be expected to repay the debt with interest. Furthermore, while the value of our currency, wages, savings, and retirement accounts continues to decline, we get to pay more and more for everything including food, clothing, and shelter. Something is indeed wrong with this picture.
Benjamin Says:
29 March 2008 at 1:52 pm.
It is absolutely true that a central government of communism is backed by the power of a central bank. That is one of the reasons the states insisted on holding onto the powers not given to the federal government in the Constitution. This is so dangerous. A quick fix is not worth handing over this kind of power.
Jesse Says:
29 March 2008 at 3:11 pm.
Wartman, it is amazing how often those rules of thumb turn out to be right. There is something about who holds the purse strings makes all the decisions. We are really digging ourselves in deeper by solving the problem of debt with more debt. Bailing out Wall Street will enable Wall Street to continue its actions which brought about the current situation.
E.E. Says:
29 March 2008 at 7:24 pm.
Sharon, what you said about us having to repay the debt really gets to me. Wall Street gets bailed out with their executives getting to keep their billions and we have to foot the bill. Protecting the buddy system is going to crash all over us some day.
Wartman, welcome aboard.
Cavetrollhead Says:
31 March 2008 at 9:02 pm.
You make an intriguing point Benjamin- that states need to have more leverage. But as long as the economy is global, the sates have no leverage because they have to go through the fed in order to grow to competitive (international) size. It seems to me that there are many pressures growing to centralize gvt in the Fed. Maybe then we will just give that power to the UN.
National defense is a legitimate central power. beyond that I am not so sure.
Cavetrollhead Says:
31 March 2008 at 9:51 pm.
woops. . . I meant in regards to business. . .
Ghost Says:
31 March 2008 at 11:20 pm.
All of those international treaties that McCain was talking about in his speech last week will, according to Mark Levin, supersede the constitution as the law of the land so I think you’re right, Cave. I believe in a strong national defense too.
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