Readers Debate More Power for Fed
Our Readers Who Comment are of two minds this morning about the possible endowment of great powers for the Federal Reserve to regulate not just banks but the entire financial industry. Some support the concept. Some hate it.
As Neil Irwin and Binyamin Appelbaum write, "no agency is responsible for understanding or containing risks affecting the financial system as a whole." And that is the impetus for the House to consider such a role for the Fed or maybe another agency.
Someone with the screen name of wind-head suggested that "a regular citizen who is smart with much common sense, someone like me" should have the job. But most readers take the question seriously and argue its merits (somebody should do this) and demerits (the proposal places too much power in one set of hands and the Fed is too close to the banking industry).
We'll start with jonathanlarge, who wrote, "The Federal Reserve Board is not a federal agency. It answers to no one. Do we not remember recent history? This is a terrible idea!..."
But tarheelraj said, "This sounds like something we should have a done a long, long time ago"
And rocketman528 observed that "All I can say is that something must be done to ensure sanity in the financial sector. I still can't see the difference between Enron-style behavior and the financial sector firms that contributed to this debacle. At the heart of both scandals were incorrectly valued assets."
wmboyd wrote, "Sounds like a plan. Course, they'll have to hire millions of CPAs to actually perform those tasks (good ones should be 6 figure salaries easily), but Congress has money to burn, so they'll pay for it."
officermancuso said, "I don't like this. The Fed is a proxy for the interests of the those who care more about the value of money and investments than the value of their labor. Its members are not elected. It is nowhere named in the Constitution... the upshot will be the concentration of even more power in this most curious and brazenly capitalistic branch of government."
gberke wrote, "Rather than follow the industry farther out in the wild and wooly, the fed needs to define a core set of requirements for participation, insurance, etc... it's not that it left some parts unregulated, it's that it let the regulated parts deal with the unregulated, and than made regulation pretty much worthless...
When risk is unknown, it should be considered infinite..."
wind-head said, "They should have a regular citizen who is smart with much common sense, someone like me, to accompany the decisions and just report how they think it is going. For a fair amount with benefits, of course."
likovid wrote, "The Fed? Once on the saddle, who do they report to? They have great authority but seemingly no responsibility-to the public anyway.
Barney Frank and both sides of the congress on the other hand are fully compromised with large contributions from the financial system..."
fernando1958 said, "we need to regulate the regulators. I have been watching many videos in YouTube explaining step by step how the Federal Reserve Bank is the source of all the economic problems in the US, that increases their debt year after year, without having gold reserves or anything else..."
jmcauli1 wrote, "Whoa, whoa, whoa!!! The Federal Reseerve is a QUASI-Government agency. It has private shareholders. Giving this agency that power could imperil the Republic.Give it to The Treasury NOT The Fed."
lionelroger said, "This is a Banking family Coup d'Etat on America. If this passes Congress, all of these Congressmen need to be taken to the Supreme Court or judged by a People's Tribunal. The Fed must be abolished immediately. Congress is now in the hands of the Banking cartel..."
We'll close with these two views:
jhough1 wrote, "We need some agency. The Fed is in no way independent of the President, but is political cover. Not very democratic, but that's the way it is. It does have a large and knowledgeable staff."
And therebel said, "Abolish the Fed, they got us in this mess in the first place!!! Doesn't anybody get it??"
All comments on this article are here.
January 26, 2009; 9:10 AM ET
Categories: Congress , Economy Watch , Fed | Tags: Barney Frank, Congress, Economy Watch, Federal Reserve
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