Chris Dodd might be a lame duck and completely unethical, but he’s surely doing God’s work in re-writing our nation’s financial regulations and ramming it through Congress.
Today’s Wall Street Journal article by Gregory Zerzan (“Mr. Zerzan was Deputy Assistant Secretary and Acting Assistant Secretary of the United States Treasury in the Administration of President George W. Bush”) is chilling and a must-read:
OPINION: EXTRA MARCH 23, 2010, 4:18 P.M. ET
Will Walmart Pay for the Next Bailout?
The Dodd bill would regulate and tax plenty of non-banks.
By GREGORY ZERZAN
On Monday the Senate Banking Committee passed the “Restoring American Financial Stability Act of 2010” on a 13-10, party-line vote. The legislation, drafted by committee chairman Chris Dodd, gives the Federal Reserve power to regulate any large company in America. When considered alongside similar legislation that passed the House of Representatives in December, at least part of the intent of the bills’ sponsors becomes clear. The current proposals for “financial” reform are stalking horses allowing government intervention into virtually every facet of the U.S. economy.
The bill that passed the House proposed to create a systemic risk regulator with the power to look into any company in America to determine if it poses a “threat” to the economy. If so, the bill gave the Federal Reserve power to order the company to segregate its financial dealings into a separate business to be regulated as a bank holding company. Remarkably the provision was aimed not just at financial firms like insurers or securities and investment businesses. Under its terms the bill would apply to potentially every large company in America, no matter its primary line of business. Were there any thought that this was a mistake, or overly zealous legislative drafting, the plain language of the Senate financial reform legislation should dispel all doubts. The Senate bill is even more explicit in giving the Fed power to regulate commercial, non-financial services companies.
Giving the Fed the power to control any large company in America? What could go wrong?
I’m told (through other articles) the bill gives the government the right to go in and inspect and seize any bank and any financial institution in trouble, whatever the size. This is to protect against another Lehman Brothers, Dodd and others say.
Big government will look out for us, just like it did when people wrote to the SEC stating that Bernie Madoff was running a Ponzi scheme. Big government (the SEC) saved the day with Madoff, right? Wrong. This bill is all about government power and control of just about every business. It must be stopped.
Senator Dodd’s systemic risk proposal would authorize the Federal Reserve to have an unprecedented role in regulating the U.S. economy. This proposition deserves more scrutiny and debate than it has thus far received.
I’m doing my best, Mr. Zerzan. Red Staters can help, too. Wake up, everybody! This is a big f—ing deal!
From a comment to that WSJ article:
Donald Bistrow wrote:
It’s amazing how far we’ve come by standing still.
Chris Dodd, who should be frog-marched off to prison or at least be indicted is writing massive regulatory legislation on his way out of the Senate because he has been formally deemed tainted by his own party.
He couldn’t get reelected, has more than one smoking gun in his portfolio, should be up on ethics charges by the Senate Ethics Committee and is now writing the sequel to Blazing Saddles.
BANK OF AMERICA DOES REPO 105, JUST LIKE LEHMAN
From Business Insider:
Bank Of America Says Its Lehman-Style Bogus Balance Sheet Manipulation Is A-Okay
Henry Blodget | Mar. 23, 2010, 10:52 PM
As John Hempton pointed out last week, Lehman wasn’t the only bank that engaged in bogus end-of-quarter balance sheet manipulation to trick investors into thinking it was less leveraged than it was.
Turns out, Bank of America (BAC) did it, too.
Thus, Bank of America interrupted its wild gambling for a few days at the end of the quarter, presented a sober snapshot to its investors, and then went right back to gambling again.
Which leads to another Business Insider article:
Here’s Why Lehman’s Accounting Was Completely Bogus — And Why The Rest Of Wall Street’s Still Is
John Hempton | Mar. 21, 2010, 8:54 AM
Do we want to prosecute?
There is a big debate in the blogosphere as to whether anything in the Valukas Report rises to the level of prosecution.
I suspect in a vacuum it does. But this was a collective insanity every bit as mad as the poisoning craze written about Charles Mackay. Mass insanity does lower moral culpability and it takes an extraordinary person to stand up to it.
Besides – if we are going to slap Erin Callan’s wrists in handcuffs then we are going to have to do the same to Ken Lewis and probably have to extradite the top-end of the Japanese establishment who were the counterparties.
I do not want to go there – and I do not think it would be constructive.
Mass insanity does lower moral culpability? Are you kidding me, John Hempton? It’s less of a crime if everybody does it? Are my stock losses of 2008 any less because everyone else was losing also? The people who defrauded me into buying those companies should get off because all of Wall Street is corrupt?
Yes, prosecute every criminal, everyone who knowingly defrauded investors that led to the largest bankruptcy in American history.
I do want to go there. I do think it would be constructive.
We must have confidence in the integrity of our government and our financial system. You don’t get that by giving the criminals who profited a free pass.