Saying it would give the executive branch far too much “unprecedented power,” both Republicans and Democrats struck out at the bill introduced to battle against financial risk in the economy.
Responses were it would not only institutionalize “too big to fail,” but would also offer “permanent, unlimited bailout authority,” to the executive branch.
What it essentially does is take away the checks and balances of Congress and allow implementation of taxes and spending without congressional approval, a major reason for the increasing attacks from all quarters of the political spectrum. It would evidently, based on whatever an administration would want, allow the transfer of money to Wall Street from the Treasury whenever they wanted.
Embattled Treasury Secretary Timothy Geithner tried to make a case for the proposed legislation saying, “Without the ability for the government to step in and manage the failure of a large firm and contain the risk of the fire spreading, we will be consigned to repeat the experience of last fall. It’s a really stark, simple thing.” He’s even saying that with a straight face.
Geithner attempted to blast the bankruptcy code as not being an “effective tool” for handling large, global financial institutions which fail, citing Lehman Brothers. He added that government interference would only apply to banks, while other financial firms could continue to go the bankruptcy route.
As usual, the executive branch’s response is to increase regulations and power, while attempting to limit the feedback and checks other branches of the government would provide so they don’t run amok like they have been even under the current economic conditions.
The bill even allows for increased powers for the Federal Reserve, which has been a major culprit in the the global economic crisis in the first place, and continues to be as it keeps on printing money at unprecedented levels.
New powers afforded the Federal Reserve would include restricting the pay and bonuses of executives, limiting credit exposure, forcing bankruptcies and blocking acquisitions. This of course is an agency which battles and refuses to allow its books to be audited by anyone. They only let out the information they choose to with the faux audits currently used.
As far as the FDIC, they would be allowed to offer more credit to solvent banks and other financial corporations in order to allegedly protect against the financial markets becoming unstable again.
Leaders of these governmental entities, like Sheila Bair at the FDIC, assert taxpayers won’t flip the bill for this but the financial companies will. But that’s far from the truth, as when money is extracted from banks and other financial institutions, it is passed on to consumers through higher prices for products and services they offer. It’s just a hidden consumer tax rather than one that is up front and easy to identify.
The idea that you can take all the risk out of life in general, and the financial sector in particular, is a messianic complex and not one based in reality. Lawmakers rightly oppose this as all of us should, and we need to go back to allowing the market to make these decisions and not megalomaniac members of this confused and socialist administration trying to take over the free market, which has only partially existed for some time as it is.
