The Black Hats Strike Back (Bernanke)
November 28. 2009
Posted by
Karl Denninger
It appears that Ben Bernanke has his knickers in a bit of a bind this morning....
The right reform for the Fed
By Ben Bernanke
Sunday, November 29, 2009
http://www.washingtonpost.com/wp-dyn...22.html?sub=AR
For many Americans, the financial crisis, and the recession it spawned, have been devastating -- jobs, homes, savings lost. Understandably, many people are calling for change. Yet change needs to be about creating a system that works better, not just differently. As a nation, our challenge is to design a system of financial oversight that will embody the lessons of the past two years and provide a robust framework for preventing future crises and the economic damage they cause.
That's correct Ben. Indeed, the only people who aren't calling for change are those who have abused their power to loot, pillage, and violate Americans over the last thirty years or so. They're quite content with how things are now, and indeed, have gone so far as to threaten Congress with events that will lead to martial law if they don't get their way.
There is some history behind this, is there not?
The American Bankers Association secretary James Buel expressed the bankers attitude well in a letter to fellow members of the association. He wrote: "It is advisable to do all in your power to sustain such prominent daily and weekly newspapers, especially the Agricultural and Religious Press, as will oppose the greenback issue of paper money and that you will also withhold patronage from all applicants who are not willing to oppose the government issue of money. To repeal the Act creating bank notes, or to restore to circulation the government issue of money will be to provide the people with money and will therefore seriously affect our individual profits as bankers and lenders. See your congressman at once and engage him to support our interest that we may control legislation."
That would be 1890 Mr. Bernanke. More than 100 years ago. Once a viper, always a viper.
I am concerned, however, that a number of the legislative proposals being circulated would significantly reduce the capacity of the Federal Reserve to perform its core functions. Notably, some leading proposals in the Senate would strip the Fed of all its bank regulatory powers.
You should not have bank regulatory powers. The reason is simple: You have abused them and willfully ignored the abuses served upon the people, specifically:
The marketing of trash securities with alleged "AAA" ratings that you either knew or should have known were backed by no ability to repay on the original terms - indeed, the only hope of payment was the continued appreciation of property values.
The abusive practices of banks with regards to overdraft fees and costs - fees and charges that amount to the imposition of interest rates of hundreds of percent on terms that customers not only did not opt into but could not opt out of. This has generated more than $30 billion in illicit profits in the last year alone. Your belated half-hearted actions in this regard in the last two months come only after decades of abuse and threats to impose that which you would not do as a regulator by statute.
Likewise, the "rate jack" operations of credit card issuers has not come under attack or regulation by The Fed. Indeed, it was once again Congress that had to step in after years of willful blindness on your part.
Finally, The Fed refused to regulate various predatory lending practices - including but not limited to those targeting minorities and low-income persons in general.
In short, The Federal Reserve is one of the primary architects of the current economic malaise and indeed the credit bubble that led to it. For you to come to The People of this Nation and ask for more power and authority, say much less keeping that which you have had but refused to exercise in the best interest of the people, is an outrage.
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