“This Was a Failure of the Entire System,” Obama Said; Solution? Make the System Bigger
June 17th, 2009More ministries, Comrade. Always more ministries! In this case, we need a Ministry of Ministry Supervision.
In Fiat Currency Hell, endless financial complexity allows for swindling at heretofore unthinkable levels. This may sound counterintuitive, but the purpose of expanding the regulatory machinery is to facilitate even vaster amounts of fraud. This is what happens when big organizations fail, but aren’t allowed to die. A small number of people makes off with unthinkable amounts of plundered money—and then the government gets bigger! The people who are left walking funny at the end of all of this get the bill.
Now that so many pieces of the machine—that were too big to fail—have failed, rather than facing the music, they’re going to try to double down, one more time.
On the one hand, I can’t see how it’s even remotely in the cards. With the people at the lower levels of the pyramid tapped out, and China saying, “Enough,” how does the band play on?
On the other hand, I’ve been thinking that for over fifteen years.
Via: Bloomberg:
President Barack Obama said his plan to refashion supervision of the U.S. financial system is needed to fix lapses in oversight and excessive risk taking that helped push the economy into a prolonged recession.
The proposal, much of which will be subject to approval by Congress, sets out the biggest overhaul of market rules in more than seven decades, adding an additional layer of regulation for the biggest firms. It would create an agency for monitoring consumer financial products, make the Federal Reserve the overseer of companies deemed too big to fail, and bring hedge and private equity funds under federal scrutiny.
“This was a failure of the entire system,” Obama said in prepared remarks for a White House event with the leaders of the Treasury, Fed and other regulatory agencies. “An absence of oversight engendered systematic, and systemic, abuse.”
The announcement marks the beginning of what promises to be a political battle that’s likely to alter the president’s plan. Obama, who has called the “sweeping overhaul” of regulations one of his top domestic priorities, said wants to sign legislation to enact it by the end of the year.
The administration’s proposal comes after a year of shocks on Wall Street that contributed to the worst U.S. recession in half a century. Since September, the government has been forced to spend billions of dollars bailing out such firms as Citigroup Inc., Bank of America Corp., American International Group Inc., General Motors Corp. and housing finance companies Fannie Mae and Freddie Mac.
It could easily continue until enough of the formerly middle and upper middle classes are completely bled white, have nothing left to lose, realize they have been cheated and having nothing left to lose, and then resort to organized violence. And it will still continue, as long as said acts are unsuccessful.
With all the crap that goes on in the U.S., you still don’t see the kind of signs of massive social unrest that you see in other countries on a routine basis. And what happens in those other countries most of the time? The unrest is quelled by the police; the ringleaders are jailed, life goes on, the beatings continue until morale improves.
i understand why you don’t want to rule out the possibility that this situation could just grind on and on. but, imo, it can only go on for as long as external participants allow it to. the US receives a lot of goods and services from the outside world (not to mention Canada and Mexico). oil and natural gas have to keep arriving every day. and all the junk sold in expensive shops and cheap shops. even key manufacturing equipment, etc., etc. the game is up when the essential stuff stops arriving. when wil that be? when the parties sending the stuff decide they have better options for what they do with their stuff. and when are they likely to reach such a conclusion? when they judge that the US dollars they are accepting in lieu of payment is not going to be useful as a mediaum of exchange or store of wealth. see, simple.
😉
the internal triggers would seem likely to rest on events like closing down of State-level services (hasta la vista, baby?) and large-scale forced evictions. anyway, Orlov has argued quite persuasively regarding why it won’t look pretty in a lot of places.