GOP staffer on Dodd's banking plan: "the issues are much too complex"
I applauded Senator Dodd for his recent call to partly defang the Federal Reserve by eliminating its regulatory responsibility - a responsibility at which it has failed miserably.
But now comes the hard part.
What now fills that function?
Senator Dodd seemingly wants to create a whole new regulatory environment. Needless to say, I'm certain it will also fail in time because it will be far too complex. But even before a new regulatory environment fails, it must be created.
In an effort to create it, the Senate Banking Chairman has formed bipartisan working groups within his committee. And while that sounds nice, it won't make a difference in the long run of proper regulation... and it may not even help in the short run in the creation of the new system.
But don't take my word for it. Time Magazine's Massimo Calabresi reports:
In theory, the process could succeed. "We have points of agreement," says one top GOP staffer. But he adds: "The working groups may not work because the issues are much too complex."
Exactly. The issues are too complex, particularly the issue of leveraging. That's another way to say creating money out of thin air. That's exactly what the Federal Reserve System does. It creates money out of thin air. And the leveraging is what led to all these problems.
Nonetheless, America needs a strong regulatory framework to ensure the stability of our banking system. As such, I offer Senator Dodd a solution aimed at stabilizing the banking system by ending the creation of money out of thin air:
The Congress shall have Power... To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures (Article I, Section 8)
But legalizing the Constitution is not about to happen anytime soon. So in the meantime, I suggest Senator Dodd continue moving the ball down the field by beginning a national dialogue on:
1) fractional reserve banking vs. full reserve banking
2) fiat money vs. honest money
3) the existence of the Federal Reserve
Tim White
3 comments:
I have a different take on the issues are too complex. The problem is that government does not want to think things through and take time to investigate the problems and real solutions. Look at cash for clunkers and now cash for appliances, not to mention healthcare reform. Our politicians are really a bunch of dopes, who just repeat their party's rhetoric and do not look at a long term timeline in how their "solutions" will work and what the consequences of those solutions will be.
Also on another note the "too complex" phrase is just BS. It makes average people think this stuff is too complicated and that is why we need these officials to figure it out. Don't worry Joe Six Pack we know what we are doing; give me a break.
After the collpase of Bear Stearns, Lehamn Brothers and AIG you would have thought fixing the financial regulatory system would be the first priority of Dodd and Obama.
Evidently not. Throwing a trillion dollars at their political allies in bailouts and stimulus was.
Sure this is a "complex issue". Which is why Chris Dodd once again went AWOL when we needed him, wasting the year subbing for the late Ted Kennedy on the disasterous health care bill....instead of running his own damm committee and getting a bill done on hmmmm ......BANKING!.
Like reducing the tax withholdings from your paycheck...so you owe the IRS in April....thanks alot.
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