Congress and the media further narrow the ‘Wall St. reform debate’ performance.
16 June 2010 | InfoShop News
The Democratic-led Congress is pushing actions which tolerates and ignores the overwhelming authority of the primary center of wealth distribution in the U.S.—the quasi-autonomous central bank—Andy Sullivan and Kevin Drawbaugh reported today at Reuters:
The report was initially only credited to Mr. Sullivan was titled, “Fed could emerge intact from Wall Street reform debate.” To which I tweeted: “What an Orwellian title. With the Fed guaranteed to ’emerge intact’, there is no ‘Wall St. reform debate’.” The Reuters title was edited within hours to read: “Fed could evade toughest scrutiny in Wall Street bill.”
The report added that the charge to perpetuate Fed command of the economy is being led by Capitol Hill Democrats:
House Democrats on the panel aim to drop a provision included in their version of the bill that would have opened the Fed’s interest rate policy to congressional audits.
They also said they would try to defeat an aspect of the Senate bill that would allow the U.S. president to name the head of the New York Fed. Currently, the head of the New York Fed—the only one of the 12 regional Fed banks with a permanent voting seat on the central bank’s policy-setting committee—is named by the bank’s board, which includes private bankers.
This cronyist cartel, led by a hand-picked puppet at the head of the table in New York, will be the chief body to “resolve disputes”, the report added.
Though, the proposed bill “is likely to crimp financial firms’ profits and saddle them with tighter regulations”, according to a Citigroup analysis, there is no reason to believe the insider cartel will not possess a much larger share of the market. It will regulate the mutual risk by not overpowering each other and taking turns scooping up the failed banks disconnected to the money-priniting, credit-manufacturing cabal.
Washington puppets can give all of the noise they want about it being imperative to end ‘too big to fail’ policy, but when four banking institutions—Bank of America, Citigroup, Goldman Sachs and JPMorgan Chase—carry over 52% of systemic risk, strengthening the cartel makes enriches the economy’s dependence on it. Ergo, political power is dependent on the safety against the failure of this risk. The result is Washington as a perpetual bailout machine for Wall Street, Philadelphia Fed President Charles Plosser implied last Friday in a speech.
Remember that the purpose for the Fed’s existence is to bail out banking institutions as the ‘lender of last resort’. The moral hazard inherent in the institutions objectives enable high risk to pocket huge rewards when the worst case scenario is that risk being nationalized.
The bill to audit the Fed, led by Reps. Ron Paul (R-Texas) and Alan Grayson (D-Fla.), which passed the House was greatly waterlogged before passing through the Senate to only audit the transactions relating to the Troubled Asset Relief Program and “emergency lending” to bail out Wall Street in the fall of 2008. Because of this, “congressional investigators would not be able to probe monetary policy decision”, the report added.
Case and point: Wall Street is betting in high volume against the viability of BP, so even if full restitution and restoration is provided directly from BP for damaging the livelihood of masses, those masses will—in the end—bail out Wall Street to cover the bets, whether or not BP is able to survive this entirely hypothetical scenario. This example is a microcosm of the derivatives market nearing $620tn—at the time of this posting—in a $14tn economy.
Rep. Sander Levin (D-Mich.), chairman of the House Ways and Means Committee said the country’s “patience has run out” on currency manipulation, Doug Palmer reported today at Reuters. He called it a “prime example” of “mercantilism” and added that if currency manipulators don’t change their policy “and the administration does not respond promptly thereafter, the Congress will act”.
Rep. David Camp (R-Mich.), a ranking member on the same committee, agreed. He noted that such economic policy “will wreak havoc” on “the global economy”.
Unfortunately, the two congressmen were only condemning China at the time. You see, the narrative is that China is undervaluing its currency against the U.S. dollar. Hinting at the possibility that the U.S. dollar—and the euro, for that matter—are overvalued, as the banking class existentially manipulates and consolidates the supply, is something you’re not allowed to do.
“The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum—even encourage the more critical and dissident views,” Professor Noam Chomsky said in a collection of interviews published in The Common Good (1998). “That gives people the sense that there’s free thinking going on, while all the time the presuppositions of the system are being reinforced by the limits put on the range of the debate.”
We immediately commented on an excellent Socialist Worker editorial, published in late March, which displayed how and why the bill touted as the “sweeping sweeping overhaul of financial regulations” would only pass as a “business-friendly bill” that would only strengthen the most powerful. Politicians easing off the Fed doesn’t—nor should it—come as a surprise. The key is to not get swept up in unjust bills being written and sold in Washington that perpetuate the puppeteers of the economy and enrich their power to do so in manners that will only trickle wealth up to their pockets and increase their authority.
No matter how many times Ezra Klein’s balls swell up per day about “FinReg” and how loud Ed Schultz’s belligerent economic illiteracy pierces the ear, calling the play-by-play and quoting shallow opinions of the narrow narrative—as I wrote in October, regarding the Fed—“when only abolition is just, reform is naïve”. And when the motions by the power that be are regressive, the totality cannot at the same time be a progressive measure.
EDIT: “The Senate will accept an expanded Federal Reserve audit proposal from the House as part of Wall Street conference committee deliberations, Sen. Chris Dodd (D-Conn.) told the panel Wednesday evening,” Ryan Grim just reported at The Huffington Post.
Given there are no details, one could drive a convoy of trucks between the House and Senate bills. That Sen. Dodd would not fully embrace the House bill displays a substantial deviation in any audit plan. The Senate is very scared to demand the wealth distributors and debt nationalizers keep their doors open or their money monopoly will end. Of course audits of integrity would result in this anyway. This “story” is a four-paragraph pacifier.
Abolish the Fed.
EDIT2: Around 9 p.m. CST, Reuters re-edited the article again, replacing “House Democrats” with “Lawmakers” in the paragraphs I quoted. They did modify the title again, as well to: “Wall Street bill likely to preserve Fed independence.”