U.S. Seeks Expanded Power to Seize Firms
Goal Is to Limit Risk to Broader Economy
The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.
The government at present has the authority to seize only banks.
Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president's Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document.
The administration plans to send legislation to Capitol Hill this week. Sources cautioned that the details, including the Treasury's role, are still in flux.
Treasury Secretary Timothy F. Geithner is set to argue for the new powers at a hearing today on Capitol Hill about the furor over bonuses paid to executives at American International Group, which the government has propped up with about $180 billion in federal aid. Administration officials have said that the proposed authority would have allowed them to seize AIG last fall and wind down its operations at less cost to taxpayers.
The administration's proposal contains two pieces. First, it would empower a government agency to take on the new role of systemic risk regulator with broad oversight of any and all financial firms whose failure could disrupt the broader economy. The Federal Reserve is widely considered to be the leading candidate for this assignment. But some critics warn that this could conflict with the Fed's other responsibilities, particularly its control over monetary policy.
The government also would assume the authority to seize such firms if they totter toward failure.
Besides seizing a company outright, the document states, the Treasury Secretary could use a range of tools to prevent its collapse, such as guaranteeing losses, buying assets or taking a partial ownership stake. Such authority also would allow the government to break contracts, such as the agreements to pay $165 million in bonuses to employees of AIG's most troubled unit.
The Treasury secretary could act only after consulting with the president and getting a recommendation from two-thirds of the Federal Reserve Board, according to the plan.
Geithner plans to lay out the administration's broader strategy for overhauling financial regulation at another hearing on Thursday.
The authority to seize non-bank financial firms has emerged as a priority for the administration after the failure of investment house Lehman Brothers, which was not a traditional bank, and the troubled rescue of AIG.
"We're very late in doing this, but we've got to move quickly to try and do this because, again, it's a necessary thing for any government to have a broader range of tools for dealing with these kinds of things, so you can protect the economy from the kind of risks posed by institutions that get to the point where they're systemic," Geithner said last night at a forum held by the Wall Street Journal.
The powers would parallel the government's existing authority over banks, which are exercised by banking regulatory agencies in conjunction with the Federal Deposit Insurance Corp. Geithner has cited that structure as the model for the government's plans.
The willful ignorance of human nature, and FORCES of nature is what characterizes, inevitably some of the greatest failures we have seen, which have unimaginable sized consequences.
The Volstead Act presaged the rise of organized crime as a multinational force majeure WE STILL DEAL WITH.
The League of Nations and our failure to join (which would have made no ultimate difference anyway) caused Wilson to allow the allies to raid German wealth for a generation, causing 45 million more deaths
The Washington/Kellogg-Briand series of treaties guaranteed a west unready physically, mentally, emotionally and morally ready to fight.
The reason the Founding Brothers were so successful in their endeavor was that they recognized, cynically, human nature and capitalized on it.
Dictatorships were to be averted by putting the desire for power of one branch of govt against another ..purposefully.
The powers of the govts were to be ultimately controlled by arming the populace.
Property and the HUMAN DESIRE FOR IT was to be recognized as the basis of freedoms.
Inherent in the system for property (which is PRECISELY what THOSE PEOPLE wish to end) is risk.
Just as the puritanical idealism in america caused the 20th amendment, so now the social, and frankly Marxian utopian idealism to make us all safe from risk is driving this delusional administration to create a system which will inevitably cause calamities of untold dimension, because of two things:
HUMAN NATURE IS PART OF NATURE
DENIAL OF NATURE ALWAYS FAILS
With each step of enforcement towards the goal of elimination of worry from our lives THOSE PEOPLE will create with EACH STEP a society more and more in which everything not compulsory is forbidden.
They mean well, but they are dangerously naive fools, with ULTIMATE BELIEFS NOTHING like our founding ideals.
Through the looking glass, this idealism is far more dangerous than ANYTHING they imagined the dreaded (but now looking correct) neo-conservatives could do.
Ready out there SANCHO?
Everyone should start considering WHICH commodity will retain the value they now have.
Savings, 401k's et al, all depend on a valuable dollar.
Diamonds, Gold, Oil do not.
If the government acts so as not to protect the freedoms our private property endows us with, we must act ourselves.
The chain of events we are all witnessing are all related. Each one causes the next action, thought and event in a cascade of utter calamity. Like a plane crash, the inevitability of each act causing the next will be viewable only by the NTSB of historians 50 years from now.
RISK CAN NEVER BE ELIMINATED.
LAW OF NATURE
2 comments:
I don't believe they mean well, Epa. A month or so I may MAY have given them the benefit of the doubt but no longer.
This is all very frightening and needs to be stopped.
Gun up. It may yet come to every community for themselves.
Obama addresses dissent:
‘Fusion Centers’ Expand Criteria to Identify Militia Members
Do you like Ron Paul or oppose abortion? You may be a member of a militia, according to a new report by a government information collection agency.
If you’re an anti-abortion activist, or if you display political paraphernalia supporting a third-party candidate or a certain Republican member of Congress, if you possess subversive literature, you very well might be a member of a domestic paramilitary group.
That’s according to “The Modern Militia Movement,” a report by the Missouri Information Analysis Center (MIAC), a government collective that identifies the warning signs of potential domestic terrorists for law enforcement communities.
“Due to the current economical and political situation, a lush environment for militia activity has been created,” the Feb. 20 report reads. “Unemployment rates are high, as well as costs of living expenses. Additionally, President Elect Barrack [sic] Obama is seen as tight on gun control and many extremists fear that he will enact firearms confiscations.”
MIAC is one of 58 so-called “fusion centers” nationwide that were created by the Department of Homeland Security, in part, to collect local intelligence that authorities can use to combat terrorism and related criminal activities. More than $254 million from fiscal years 2004-2007 went to state and local governments to support the fusion centers, according to the DHS Web site.
During a press conference last week in Kansas City, Mo., DHS Secretary Janet Napolitano called fusion centers the “centerpiece of state, local, federal intelligence-sharing” in the future.
“Let us not forget the reason we are here, the reason we have the Department of Homeland Security and the reason we now have fusion centers, which is a relatively new concept, is because we did not have the capacity as a country to connect the dots on isolated bits of intelligence prior to 9/11,” Napolitano said, according to a DHS transcript.
“That’s why we started this…. Now we know that it’s not just the 9/11-type incidents but many, many other types of incidents that we can benefit from having fusion centers that share information and product and analysis upwards and horizontally.”
Read it all at the link
HRW
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