Does the Federal Reserve practice crony capitalism with favored big banks? Is the Fed “helping” small banks to fail?
Chris Dodd introduced sweeping changes into our financial system. These must be delayed until after the midterm election in November. There is great danger here to our republic.
I know you’re tired. Health care was a big loss. I’m personally beat. But now is not the time to stop, because the progressives never stop. They’re doing it all now, before November.
“Crony capitalism” is favoring firends (cronies) over others. It’s saying that Goldman Sachs can prosper, but Lehman Brothers must bite the dust. It’s saying that stimulus money goes to Democrat districts and not Republican districts. It’s saying that we bail out company X and not company Y. It’s little more than fascism, in my opinion. It’s wrong and it has no place in a true capitalistic society.
Buried in John Crudele’s financial column in Tuesday’s New York Post is this very disturbing story about your friend and mine, the Fed:
You’ve heard about banks like Citigroup that are allegedly too big to fail. But one Midwest bank executive says people should be paying attention to another group of financial institutions — those that are too small for Washington to care about.
And this bank owner not only thinks these smallish institutions are being ignored, but that Washington is actually trying to put them out of business so that big money-center banks can divvy up the spoils.
“It’s disgusting,” said this exec, who I agreed not to identify because he was afraid of reprisals from Washington.
“I believe the Federal Reserve is controlled by the large banks and this is a way for big banks to pick up market share.”
The Fed is helping small banks to fail? Is that the Fed’s job?
In a previous diary here, I wrote about how Bloomberg News and Fox News had to take the Fed to court to get it to comply with the Freedom of Information Act. Both wanted to know more about the TARP bailouts to large banks, but the Fed wanted to keep this information secret.
A government policy to consolidate all the banks by controlling the big banks and squeezing the small banks out of business–let’s think about this. We’re talking total control of the banking system. Remember that all student loans were nationalized in the healthcare bill, making our students slaves to the government. This is scary stuff.
This banker complains that federal bank auditors have been “hammering” community banks, which control 50 percent of the deposits in this country, through tougher rules on marking their loans to the actual market price — which, in the case of mortgages, means reducing the value of the loans.
Bigger banks, he believes, are being given wide discretion on similar loans. And large financial institutions, aside from receiving government bailouts, are also able to turn loans into marketable securities.
That’s something community banks aren’t allowed to do.
And because of the fa vorable treatment from Washington, this execu tive believes depositors are naturally going to gravitate to big banks, something he thinks is being orchestrated.
You know who is on the Senate Banking, Housing & Urban Affairs Committee? None other than my own senator, Kay Bailey Hutchison. I wrote to her about the Lehman Brothers report and demanded answers. There was no response–not even an automated response. I rarely see KBH on Fox News. I really don’t think she’s up to the task of protecting our nation.
The other Republican members of this committee, besides the inept KBH, are Richard Shelby (AL), Jim Bunning (KY), Mike Crapo (ID), Bob Corker (TN), Jim DeMint (SC), David Vitter (LA), Mike Johanns (NE), Judd Gregg (NH), and Erick Erickson’s personal favorite (I jest), Bob Bennett (UT). Is anyone’s staff reading this?
Our entire fraudulent Federal Reserve banking system–nah, nothin’ to see here. Let’s keep hanging our heads about healthcare.