Articles like this one: http://online.wsj.com/article/SB124934399007303077.html make me wish I was actually in a position to change things.
In it, Tim Geithner, the Treasury Secretary, is described as unleashing an expletive-laden tirade at several of the current financial regulators, including Ben Bernanke and Sheila Blair. Their offense? Stalling the new financial regulatory overhaul that Obama is making such a top priority.
Like good bureaucrats, the heads of the Federal Reserve, Federal Deposit Insurance Corp., and the Securities and Exchange Commission are all worried about the implications of the regulatory overhaul. Specifically, will it diminish the amount of power that each of them wield?
An increase in overall regulation seems a foregone conclusion at this point, but who gets the new power? Many of the proposals center around increased authority for the Fed, while some call for an entirely new board of regulators. None of this is surprising considering the misplaced blame for the financial upheaval, but what is surprising is Geithner’s reaction in the meeting.
Apparently he expects each of the individuals in power now to willingly cede some of their power to a new entity. This view directly contradicts all available evidence regarding bureaucrats and politicians. Each agency is desperate to increase their power, not give it away. To hope for anything else is willfully ignorant on the Treasury Secretary’s fault.
But wait, there’s more.
Further down in the article, White House Chief of Staff Rahm Emanuel is quoted saying: “We need to make sure we don’t slip back to risky behavior where the institutions have all the upside and the taxpayers have all the downside, which is why we need regulatory reform.”
He conveniently fails to mention that is was the government that began this process of privatising profit and socialising risk. Without the bailouts of the auto groups and the banks, the taxpayers would not have the downside that he is so quick to condemn. If the Administration could just let go of the mistaken belief that they can regulate all fluctuations in the market away, the socialising of risk would vanish.
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