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Posts Tagged ‘FED

Ron Paul & Ralph Nader: A Libertarian-Progressive Alliance?

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Ron Paul and Ralph Nader joined Judge Andrew Napolitano on Freedom Watch to discuss the possibility of fighting the establishment through a libertarian-progressive alliance.

Uncontrolled Lending to Consumers Spawned the Financial Crisis

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“the broad claim that the financial crisis has nothing to do with fraud or consumer protection dissolves in the face of the facts: the crisis can be attributed to failures of consumer protection, including those that enabled lenders to make the loans Zywicki decries.”

Posted: 05 Mar 2010                         The Baseline Scenario

This guest post was contributed by Norman I. Silber, a Professor of Law at Hofstra Law School, and Jeff Sovern , a Professor of Law at St. John’s University. They were principal drafters of a statement signed by more than eighty-five professors who teach in fields related to banking and consumer law, supporting H. 3126, which would create an independent Consumer Financial Protection Agency.  Some of the research on which this essay is based is drawn from an article by Professor Sovern.

Did under-regulated lending to consumers play a big part in destabilizing the financial system? Many knowledgeable people say yes, but Professor Todd Zywicki disagrees. (“Complex Loans Didn’t Cause the Financial Crisis,” Wall Street Journal, February 19, 2010).  He claims that the present troubles resulted from the “rational behavior of borrowers and lenders responding to misaligned incentives, not fraud or borrower stupidity.”

Professor Zywicki’s argument enjoys, at least, the modest virtue of technical accuracy, because many objectionable misleading sales practices and agreements that lenders used were, and continue to be, unfortunately, quite legal.  Lending practices may have been regularly misleading and confusing and reckless-but fraudulent?  Well, no, usually not unlawful by the remarkably low standards of the day.   But that in itself is an argument for saying consumer protection laws failed.

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Banksters win again: Dodd wants insider regulation

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Banksters Win Yet Again: Dodd Proposes Putting Consumer Protection Agency at the Fed

Naked Capitalism March 2, 2010

I felt certain when I read the Financial Times headline, “Proposal sees consumer watchdog role for Fed,” that I must have woken up in a bizarre parallel universe (but that is probably unfair to pretty much all universes parallel to ours: I imagine it would be very difficult to have one more perverse than ours). But no, sadly, this headline is for real; the only possible good news in this account it that this dreadful idea is far from a done deal.

Putting the proposed consumer financial services watchdog in any existing agency, save perhaps the FDIC, no matter what the professed logic is, is really a plan to neuter it (ironically. Richard Shelby, who was the original moving force against having the proposed new agency be independent, wanted to house it at the FDIC; it is the Democrats who are now responsible for the further devolution of this plan). The Treasury, Fed, and Office of the Comptroller of the Currency are notoriously bank friendly. Think they are gonna do anything to seriously inconvenience their charges? Not on your life. The sole reason the FDIC could be a viable choice is that it is the only Federal bank regulator that is serious about enforcement. And that is due to the simple fact that if they mess up on enforcement, they wind up with more dead banks, which is embarrassing, costly, and a ton more work for them than preventing train wrecks in the first place (to the extent they can).

And as bad a choice as the Treasury was (the former planned place to bury the financial products consumer protection agency), it would be part of the Administration, and hence subject to political pressure. Although the Fed is in the process of getting its wings clipped a tad, has managed the neat trick of playing an increasingly political role (starting with Greenspan, in a break with the practice of past Fed chairman, of weighing in on policy issues) while remaining utterly unaccountable to anyone.

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Written by laudyms

March 2, 2010 at 10:00 am

Niall Ferguson- Complexity and Collapse

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Empires on the Edge of Chaos


Imperial collapse may come much more suddenly than many historians imagine. A combination of fiscal deficits and military overstretch suggests that the United States may be the next empire on the precipice.

NIALL FERGUSON is Laurence A. Tisch Professor of History at Harvard University, a Fellow at Jesus College, Oxford, and a Senior Fellow at the Hoover Institution at Stanford University. His most recent book is The Ascent of Money: A Financial History of the World.

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Banksters worry Congress will ask the right questions

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Today’s commentary by David Reilly at Bloomberg.com has an alarming (if not surprising) header: Secret Banking Cabal Emerges From AIG Shadows. Now it’s not just conspiracy-nuts or fringe Congressmen who are wondering why and how so much power-without-oversight has been given to the NY Fed et al,  just what they have been doing with it, and how so many profited from the meltdown of AIG.

Reilly notes:   “…when it became clear information would be disclosed, New York Fed legal group staffer James Bergin e-mailed colleagues saying: “I have to think this train is probably going to leave the station soon and we need to focus our efforts on explaining the story as best we can. There were too many people involved in the deals — too many counterparties, too many lawyers and advisors, too many people from AIG — to keep a determined Congress from the information.”

Think of the enormity of that statement. A staffer at a body with little public accountability and that exists to serve bankers is lamenting the inability to keep Congress in the dark.”

Oh yes. Think!

Written by laudyms

January 29, 2010 at 3:49 pm

An Introspective Look at the Future of America: Systemic Fraud, Corruption and Financial Instability

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by Craig Harris            

Global Research, Jan. 2, 2010

As we close out 2009 and look forward into 2010 and beyond, this has been a year of near financial catastrophe and monumental change, none of which benefited America or ordinary Americans. Late in 2008 and throughout 2009, events have happened in the US which would have been labeled unfathomable just a few short years ago, and yet already these monumental changes are expected to be filed into the memory hole and Americans are expected to believe nothing has changed.

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