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March 29, 2008
The Facts
On Monday, March 31, Treasury Secretary Henry Paulson will announce a proposal that would ‘give the Federal Reserve the power to regulate virtually the entire financial industry’. The proposal will require Congressional approval. Supposedly this is an attempt to give the Treasury Department authority to oversee financial institutes in an effort to ward off the kinds of problems the industry has had over the past year.
My View
OK, let’s first take a quick look at a few facts on how this proposal is being announced in the news media. The CNN article about this announcement credits Paulson for proposing these changes, and that “the proposal has been in the works since last June”. CNN goes on to say “the financial industry’s initial response was positive”, and quotes Tim Ryan, president and CEO of the Securities Industry and Financial Markets Association, as saying “Paulson’s proposals is a thoughtful and sweeping plan”. In other words, this article is giving Paulson credit for coming up with this idea. (Naturally the industry would go for a Republican plan, but this angle is not my point here.) Let’s take a look at Fox News’ announcement about this proposal.
On Fox’s home page, the articles introductory headline reads “Bush Proposes Financial Overhaul”. Then you click on that headline which takes you to the actual article about this and the headline says “Bush Administration Proposes Sweeping Overhaul of Financial Regulation”.
So whose idea is this? If this was Bush’s idea, why haven’t we heard from the White House before now that this was in the works? It seems to me this would have given the public some encouragement that our government was trying to do something about the mess our financial institutes has gotten the country into over the past several months & years. You don’t suppose Bush, with the help of Fox News, is just grabbing onto someone else’s idea that he knows the public would be generally in favor of in an effort to bolster his low approval ratings and help establish his legacy, do you? Yes, I know Paulson is part of the “Bush Administration” and is a Bush appointee, but this is something Bush could have got some good mileage from had he announced that they were working on this about two or three months ago. And to top all this off, the Democratic Congress is also working on a similar program. Boy, we should really come out of this with a simple, efficient, working plan, huh?
But here’s the real scary part; the Fox News article says “The plan would shut down the Office of Thrift Supervision, which supervises thrift institutions, and transfer its functions to the Office of the Comptroller of the Currency, which regulates banks”. Now this really makes me feel good about the proposed changes. Do you know who the OCC is and how they operate? Try going to one of my earlier post and check out OCC. They are so ‘efficient, cooperate, and fair minded’! Oh, yea! I really trust them to oversee the financial institutions.
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