Today, Treasury Secretary Henry Paulson laid out a plan that on the surface seems to be a good idea to protect the American worker, but upon further review this plan really gives the private central bank more power. I know it gets redundant that I continually point out that the Fed is not a government agency, but can anyone tell me why this privately owned entity is given more oversight by the government and why it seems to be in charge of our entire economy. Only a little while ago Ben Bernanke admitted that the Fed caused the Great Depression. That should have been the first sign that this little arrangement the government has with private bankers needs to end.
The main points from Paulson’s speech and the fact sheet issued with the new proposal included some facts that are quite disquieting. First, the Office of Thrift Supervision will lose its charter and have it transferred to a national bank charter, meaning the Fed will now have oversight of small thrift banks. The Treasury also recommended that there be direct federal supervision of state-chartered banks. What makes these banks state-chartered anymore if the federal government has oversight and supervision? Also included is that the oversight regulators have, can be made more quickly and I assume that would make back door deals easier in the dead of night.
The new structure will consist of a market stability regulator (that’s the Federal Reserve), a prudential regulator and a business conduct regulator. But before you think that this only gives the Fed a third of the power you need to know the Fed would have authority to join in examinations with the prudential and business conduct regulators. That means full oversight over everything. Paulson did say in his speech that “the Federal Reserve would be provided with a different, yet critically important regulatory role with broad powers focusing on the overall financial system.” I guess he was not kidding. The fact sheet stated that the Fed had a previous more “limited, traditional role”. I guess issuing all of our currency and lending money to everybody from banks to investment firms is considered limited.
In case all this mumbo jumbo has bored you to tears and you are no longer paying attention, let me sum this up for you. We’re screwed! The Fed led us into one Great Depression and all the moves they are currently making are following in the footsteps of Japan’s not-so-distant economic collapse and now the government wants to give them even more power. Soon they will control every aspect of the economy and be able to yo-yo it in any way they want. Whoever controls the money controls us! More regulation is not what our Founding Fathers had in mind.