Geithner Adopts Part of Wall Street Derivatives Plan

[Badgerman]

Source: Bloomberg

May 23 (Bloomberg) -- The U.S. Treasury’s plan to regulate the over-the-counter derivatives market outlined by Secretary Timothy Geithner on May 13 contains recommendations similar to those made by Goldman Sachs Group Inc., JPMorgan Chase & Co., Credit Suisse Group AG and Barclays Plc three months earlier.

The banks sent the Treasury a plan written in February titled “Outline of Potential OTC Derivatives Legislative Proposal,” saying the Federal Reserve should extend capital and margin requirements to companies and hedge funds that trade in the $592 trillion unregulated market, according to a document obtained by Bloomberg News and confirmed by the Treasury. Energy companies, corporations and hedge funds don’t face such requirements now, while banks do under central bank oversight.

“The banks appear to wish to maintain the intra-dealer market and raise barriers to new entrants to keep the OTC business as compartmentalized as possible and to protect their profitable market conditions,” said Brad Hintz, an analyst at Sanford C. Bernstein & Co. in New York. “The Street’s lobbyists appear to be asking for a ‘club’ structure in OTC trading.”

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=anmB1ArPsWIY&refer=home

---

Could be the final straw in the bundle of 'proofs' that this administrations economic policy is run completely by the creatures that created the mess. Geithner agrees that an exclusive club made up of the largest beneficiaries of our tax dollar bailout should be established. Further that their 'profitable market conditions' need these things to protect them.

Read the whole article and if you have some anti-nausea pills laying around I suggest you take an overdose...this is some of the sickest crap yet! The next logical steps this bunch will take would be to allow waterboarding by local police agencies, and the complete removal of all public health-care for women and children (in order to save to pay for continuing Wall St bailouts).

This crap has got to be stopped NOW, Obama and anyone else supporting these sort of programs and policies have got to have all the pressure that can possibly brought to bear placed on them. People must be made aware that this isn't a Dem vs Them situation, money truly does OWN this country today, we cannot outspend them, but we still have enough health and energy to stop them (and those resources are rapidly dwindling).

[Hugin]

1. K&R

:kick:

[natrat]

2. a slick and vast political aparatus fully owned by big banks-sorry no one is stopping it

it is amusing watching intelligent people "support thr president" though

[notesdev]

3. The scam continues...

"Could be the final straw in the bundle of 'proofs' that this administrations economic policy is run completely by the creatures that created the mess."

Geithner was the head of the New York Fed when all the worst of this was going on. He was at ground zero, an essential player in the machinations that have stolen so much of our wealth and handed it to those who deserve nothing.

And now he is running the Treasury.

Thought a Democrat in office would save us? Keep hoping to be left some spare change when all is said and done.

[kentuck]

30. appears to be so...

more and more every day.

[sandnsea]

4. Could you be specific?

About what part of the plan you object to?

“This proposal had little impact on our final result,” he said. “Our proposal calls for dramatically increased transparency and the enhancement of regulatory powers to prevent market manipulation that go well beyond anything in that draft.”

[D-Lee]

7. Yes, good question. What alternative do you propose? nt

[femrap]

45. Did you see that we are

talking about a TRILLION $$$$$$ market that has not been regulated???????

Derivatives are the next leg down in the Decline of the American Empire. Derivatives are AIR....they make nothing, they produce nothing, they are nothing.

WASF

edited for spelling

[Lucky Luciano]

50. 3/4 of the notional of those derivs are interest rate swaps.

They serve a very practical purpose. A client of a bank on some notional amount like $100M can agree to swap a fixed interest rate for a floating rate or vice versa. So, if said client had taken out a floating rate loan for $100MM, but was scared that rates could rise, they would enter into thsi swap and receive a floating rate from an interest rate swaps dealer while paying them a fixed rate with the net effect that their original $100MM floating rate loan has become a fixed rate loan. That is pretty practical - and it is a super duper liquid market in the OTC derivatives category. It also has not been a concern so far from a systemic risk standpoint. CDS's did cause problems and there has to be a way to manage that better -does not mean the general idea of the CDS was bad though - it is good to find a easier mechanism with which to short credit.

[No Elephants]

55. You are still betting on something and still can get "too big to fail." Besides, nothing requires

the OTC derivative gamblers to keep 3/4 of their business in that area. They could decide that betting on the weather would be more lucrative, and off most of them would go in that direction.

Thing is, some things are a pure gamble (or the next closest thing to a pure gamble) and should not be called a security or treated as such. That is deceptive per se. (Indeed why do we call any investment a "security?")

I don't care if people want to gamble. That's their business. I don't care if other people want to insure the gamble. That's their business. However, when so many organizations are into that they threaten to bring down the world economy if housing prices go down or the temperature drops, then it becomes everyone's business.

[femrap]

62. And CDS are so

productive, too. Let's play with the cost of money. I likey.:sarcasm:

[AllentownJake]

11. My proposal is simple

Call them insurance products because that is what they are, and regulate them the same way all other insurance products are regulated. Force them to use Stat accounting and have audits by actuaries on their risk assumptions.

[Telly Savalas]

28. Given what has happened with AIG, it's ridiculous that your suggestion

hasn't been implemented yet.

[Badgerman]

34. That is an EXCELLENT suggestion imho! n/t

[creeksneakers2]

40. Aren't insurance products regulated by the states?

I think we need something as big as the Federal Government keeping an eye on this.

[No Elephants]

56. The federal government did a worse job regulating derivatives, Madoff and other "Ponzis" than states

do regulating life insurance. However, it does not have to be either/or. IF the feds are the right ones to regulate, then they could regulate these things in the same ways that states have been regulating insurance. I think that is what the poster meant anyway--the methods, not necessarily the entity.

[HillbillyBob]

59. They WERE regulated by both state and federal

But under the ( * ) maladministration when the states started to move on enforcing regulations esp the mortgages Bush moved to stop that in court I cannot remember the details but I do remember reading some about it. (migraine here tryin to think and nothin happens)

[Badgerman]

60. To some extent the mortgages, but the States have no regulatory say on derivatives. n/t

[notesdev]

12. What is really happening here

The current situation is that OTC derivatives trade with hugely profitable spreads since; there is no regulated exchange for them, price discovery is limited, and ambiguity about prices translates directly to spread profits for investment banks.

Knowing that a regulated exchange was going to happen anyway if these financial instruments were to continue to exist (the alternative, and IMO preferable alternative, is to declare all naked derivatives null and void, or at least forbid banks from trading them entirely, which amounts to pretty much the same thing), the banks are attempting to get in front of the change by being the ones to set the rules for it. Their rules, I can assure you, will be a far cry from the necessary level of regulation.

The banks are out to preserve their profits. This is normal, unsurprising behavior; it is quite literally their job to do so. Having our own government make it happen, to me, that is the problem. It is NOT their job to shortchange the citizen/taxpayer/investor for the benefit of private interests.

[sandnsea]

26. You're not the OP - but again

What is it - specifically - that you object to in the Geithner's plan?

Obviously the banks are attempting to set the rules for themselves. DUH.

They aren't and that was stated twice in the article. Did you read that?

[Badgerman]

38. I am the OP and I agree with you: further you are consistent with the article. n/t

[creeksneakers2]

42. It only says that the banks proposed elements of the plan

Not that the banks wrote the plan. The elements mentioned were items like transparency and capital requirements. Of course those things would be included in the final plan.

"This proposal had little impact on our final result,” he said. “Our proposal calls for dramatically increased transparency and the enhancement of regulatory powers to prevent market manipulation that go well beyond anything in that draft.”

The article also concludes:

"Geithner’s plan goes further in many aspects than what the banks laid out in their draft."

I don't know how the OP could have come to the conclusion that this is proof of Obama being in corporate pockets. Did anybody read the article?

[sandnsea]

48. Read the whole article? At DU??

And miss the chance to bash a Democrat?

The forum would disappear overnight.

[notesdev]

51. Go ahead and read it

The article simply elaborates all the ways this is a rigged proposal - from the cartel/oligarchic structure, to the Fed as regulator (same guys who were supposed to regulate the banking system, and got us into this mess through catastrophic failure), to the lack of actual clearance requirements in the supposed 'clearinghouse', and so on.

Reading the article is only 'half the battle', as the the old saying goes. The other half is understanding it and being able to apply it to the context.

Given the brief but sordid record, I don't see how you can come to the conclusion that Obama isn't in corporate pockets.

[creeksneakers2]

61. It isn't rigged to create a cartel structure

A normal byproduct of any regulation is that it creates barriers to entry that limit the number of players in a market. If there are capital requirements, then anybody who doesn't have that much capital can no longer compete with those who do. The requirement isn't put there to limit competition. Its put there to insure that players can pay off their obligations. The article just said the players welcomed the situation. It doesn't mean the situation was created for their benefit alone.

The article says that the future regulating body hasn't been chosen yet. It says that the banks would like the fed but doesn't say they are going to get it. I can understand why subjects of regulations wouldn't want three separate agencies conducting oversight. I can also understand why they'd prefer someone they are familiar with. Its entirely possible that regulation by the fed works out best for the public too. Perhaps the fed has more experience in the area. Its a mistake to conclude that everything that is good for business is bad for the public. Interests often overlap, and it good to take advantage when they do.

The clearing requirement is an example of the businesses not getting their way. The article said, "The bank proposal does not endorse clearing of OTC derivatives." So the banks didn't want the clearing requirements. The article also says , "The Treasury Secretary is proposing mandatory guaranteeing of private contracts with clearinghouses for standardized OTC contracts such as interest-rate swaps or indexes of credit- default swaps and increased electronic trading to improve price transparency for customers. He also wants required reporting of positions and trades." So the banks are losing on that one.

One of the reasons I don't believe Obama is in corporate pockets is because I don't believe working with the business community always means a betrayal of the public. Obama touted himself as a consensus builder during the election. Consensus is often the best way to get things done for everybody involved, including the public.

[Deja Q]

5. Whatchagonnado? Have a massive write-in; beg the President to fire the guy?

[clear eye]

9. How 'bout a National Strike?

There may not be viable electoral alternatives more progressive than the Democratic Party to vote for, Mr. President, as you have more than once reminded us, but we can still make our voices heard if you push us into a corner by breaking the economy for the sake of some big financiers.

I hope big Labor (Andy Stern aside) is willing to open its eyes to the inconvenient truth of this Administration's economic policies.

[Deja Q]

10. Convince people.

I can't even tell people why Star Trek (2009) is bad without getting laughed at.

[clear eye]

14. A little leadership would go a long way.

I've been trying to encourage any one of a few of the multi-issue progressive groups to restructure themselves as an umbrella coalition to create a critical mass of members and gain support from the better unions, but no one has bitten yet. Maybe they think I'm a government provocateur or something. Or maybe they are still convinced, despite all evidence to the contrary, that online petitions work. It's tragic how each group is still determined to go it alone, except for linking a few websites to the same petitions. If the anti-Viet Nam War groups were so pigheaded, the massive mobilizations would have never happened, and who knows how much larger the mess in Indo-China would have grown, and how many more young men would have been killed.

Marches are now greeted with yawns by elected officials in Washington, which is why I'm suggesting the European tactic--the general strike--to get some sanity back into our economic policies.

[natrat]

20. they killed wellstone, the last chance for a populist leader

[clear eye]

24. I'm not suggesting any one person take point.

That's the beauty of a coalition. You do realize the implications of what you're saying? That the mass of good people allow the relatively few evil people in high positions to take us all wherever they want even if it means becoming starving slaves like the ordinary citizens were in Latin America until recent years. I don't see that sort of suicide as an acceptable end game. Before progressive populists can succeed in gov't, leadership has to come from unified action of the grassroots, i.e. a movement. As it did in Latin America. (You're probably right about Wellstone. He was before his time.)

[creeksneakers2]

43. They all fight with each other

The most common denominator of radicalism is a refusal to compromise. Since they don't compromise, they cannot form effective groups, since they'd have to compromise with each other. When they do get on the same page, they attack their potential allies next.

[No Elephants]

54. Groups don't like to yield power over themselves, any more than do

Presidents and other individuals. Also, people resist new things because risk inheres in them. And then, there's garden variety inertia.

[clear eye]

6. Aarrggh!

Thanks, I guess, for giving us a heads up on this, though I don't know how much more I can stand..........:nuke: What I hear, everytime I see our country's borrowed money going to protect the bankers' unsustainable business as usual, is more devaluation of the dollar as more and more dollars need to be printed. I see the shrinking of the real value of the Social Security and pension checks, I and most Baby Boomers will soon be trying to survive on. I see, not simply poverty, but destitution in old age for myself and my friends and relatives. That even Bloomberg news feels it must report on this shows how critical the financial industry (outside the management of the biggest institutions) feels this situation is.

But I guess that situation will resolve itself quickly as we all die prematurely because we can't afford our prescriptions, Medigap insurance and/or copayments and deductibles, heat in cold climates and air-conditioning in hot ones, or even shelter.

K & R.

[pjt7]

8. health companies& Insurance companies

have created a derivative market based on the formulas,calculating the likelihood that people die from specific diseases.

I know someone whose job it is, to rank people diseases, based on a pre-set formula. Ex. Pancreatic Cancer, is the worst "rated" disease. Most likely to die. The large financial companies take these formulas & trade them.

Anything for a buck... huh?, or Trillions in case of derivatives.

[No Elephants]

57. I did not know that. That should definitely be banned. For one thing,

insurance companies should not have that kind of financial exposure. For another, there's real potential for deadly conflict of interest.

[natrat]

13. nothing here move along

Earlier this month, Federal Reserve Inspector General Elizabeth Coleman demonstrated why a much greater degree of transparency and accountability are absolutely necessary for the central bank as she testified on Capitol Hill. She stated that the Fed is a little behind on its accounting practices.

So far behind, in fact, that it cannot account for the whereabouts of $9 trillion worth of off-balance sheet transactions over the course of the past eight months. Nor could she explain the $1 trillion expansion of the Fed’s balance sheet since last September.

“We have different connotations,” Coleman replied when asked about the ballooning balance sheet. “We’re actually conducting a fairly high-level review of the various lending facilities collectively.”

However, when pressed by Rep. Alan Grayson (D-FL), Coleman said she could not provide any information on those investigations and claimed that she had no authority to look into the practices of the Fed. Instead she said, her job was simply to oversee the Federal Reserve’s Board of Governors. She reiterated that statement in an email to Bloomberg News, who originally broke the story of the gaping holes in the Fed’s balance sheet.

“By law, we are the Office of Inspector General for the Board of Governors only,” the statement said. “Consistent with our authority, we cannot conduct a direct audit of Reserve Bank operations.”

According to Bloomberg News, which sued the Federal Reserve in November under the Freedom of Information Act, Treasury Department, the Federal Deposit Insurance Corporation and the Fed have lent or spent almost $3 trillion over the past two years and pledged up to $5.7 trillion more.

Yet, Coleman could not provide any accounting for the massive amount of taxpayer cash during her trip to Capitol Hill. Coleman was even unable to explain the expansion of the Fed’s balance sheet by $1 trillion.

"I do not know. We have not looked at this specific area at the particular point on that specific review," Coleman answered.

"I am shocked to find out that nobody at the Federal Reserve, including the inspector general, is keeping track of this," Grayson concluded.

http://www.economyincrisis.org/articles/show/2907

[Old Hob]

15. Is it possible that the missing cash has been reinfused into the market in order to prop it up?

Behind every good conspiracy sits a banker; as such, I wouldn't put much of anything past them or beyond them, especially market manipulation.

[clear eye]

17. Interesting theory, but

my guess is that the missing trillions from the Fed went to the same place where the money Geithner is now dispensing went, to the bottomless pit of large institutions still allowed to back these fraudulent and toxic derivatives. A Wall St. insider on this board told me that these banks, etc. hurt other countries' banks bad by misrepresenting and selling them this junk, and that if we didn't reimburse them for a lot of it, they threatened to pull the plug on our whole economy by dumping their holdings of U.S. Treasuries and refusing to allow many of our insovent banks to do business with them. It's a bit of a game of chicken, because if our financial structure went down, it would cause a worldwide panic about all banks with disatrous results for them as well. Odds are, we blinked, and considering the unfathomable sums involved, that's why we turned our entire financial system into a black hole for money we don't have. The question is whether that behavior will tank the dollar and destroy us just as surely as cutting off buying back the derivatives might have.

It is also possible that this situation is behind much of Pres. Obama's passion for secrecy, and for refusing access to progressive economists. He assumes that because they know less about the precise details of the financial mess, that they would have nothing worthwhile to offer if they were brought up to speed, and would just leak the dire predicament to the general public and cause a catastrophic panic. I'm sure that's what all the insiders he's listening to now are telling him. But THAT..IS..JUST..SO..WRONG. Brilliant people like Nobel prize-winner Stiglitz, and Nouriel Roubini who value the well-being of the entire economy, not just the big banks, could probably go a long way toward finding a way out of this mess that threatens all of us. They certainly have the sense not to go shooting their mouths off when it counts. They most likely have heard a lot more than the President is led to believe, and are being discreet right now. I do believe that Obama thinks all progressives are as flaky as his brilliant mother was when her unconventional ambitions left him essentially motherless for six crucial years of his childhood, and as he was when he played at community organizing right after college (later saying that the people in the neighborhood helped him more than he helped them). I think his background left him with not only a lack of regard for progressives, but an anger toward them that cripples his ability hear crucial viewpoints.

[NJmaverick]

16. This would be a text book case of a knee jerk reaction

The part that was adopted was:


The bank-written plan, dated Feb. 13, said the systemic regulator “shall promulgate rules” requiring “capital adequacy,” “regulatory and market transparency” and “counterparty collateral requirements.”

A thinking person would look at these items and conclude that they should be included in the plan, even if the banking industry proposed them.

[sandnsea]

27. Not to mention

“This proposal had little impact on our final result,” he said. “Our proposal calls for dramatically increased transparency and the enhancement of regulatory powers to prevent market manipulation that go well beyond anything in that draft.”

[femrap]

47. Greenspan didn't even

understand Derivatives.

[mbperrin]

18. These are nothing but gambling schemes and have no place in an actual

financial system.

Ban them.

You wanna gamble? Go to the casino, where you know the house wins, but you get a couple of free drinks and a show after they're done with you.

ALL these gambling contracts should be declared null and void right where they're at. Then they should be parsed for misleading language and their purveyors filed on for criminal fraud, RICO violations and anything else that can be derived from a careful study.

Then send 'em to prison!

Of course, I'm dreaming. That's why I exited the banking system 20 years ago. I wouldn't put a penny of mine into it under any circumstance.

[creeksneakers2]

44. Economic activity requires risk, in other words, gambling

Derivatives can serve a valid purpose. Suppose I set up a deal with a firm in another country that will create lots of jobs and profits for me too. But I know that if the currency rate fluctuates in one direction I'll get killed. So I take out a policy that will pay me if that risk materializes. Then I can go forward with the deal and all those jobs will be created.

The problem isn't insuring risks. The problem is that the people who insured them didn't have the money to back what they promised, didn't offer the transparency to let purchases know whether they could collect if the bad day came, and derivatives were offered with no accounting for the issuers risk.

Regulation can turn a bad thing into a good thing.

[mbperrin]

65. Risk and gambling are two very different things.

Risk means that you have considered all possibilities, and that the chance for success (whatever that means in context) outweighs the chance for failure, so you decide to proceed with the program. The silly idea that you can actually eliminate risk is just that - all you're doing with this "insurance" is transferring the risk to another individual; in the macro system, the total risk changes not at all, and neither does the cost to society for ill-considered activities. The difference is that it allows the individual to privatize the profit while socializing the risk.

Both Adam Smith and I oppose this. We do believe that entrepreneurs should reap the profits of their good decisions, and should be crushed by bad ones. The fear of losing everything, including the clothes off your and your family's backs should be the temper when deciding on a course of action. The fact that you have succeeded in pulling someone else's clothes off and putting someone else's family on the street instead of yours is a moral hazard and a net loss to society by encouraging activity that should never have been done to start.

Gambling means that you know the odds ARE against you (house odds), but that you choose, for entertainment purposes, to participate anyway, on the chance that this time you will be one of the outliers, statistically. To the extent that any entertainment creates benefits for society, this is acceptable. What would be unacceptable would be for you to bet the family home, lose it, and then expect someone else to pay for it to be restored to you, EVEN IF that person agreed to do it, and for money.

The larger issue is that all resources are scarce, and when we allow individuals to fritter them away on ill-advised schemes, we're all poorer. Keeping in mind that the creation of maximum amounts of goods and services for the maximum amount of people is one of the goals of economics. Making a profit isn't. Stealing from the commonweal isn't. The whole idea of any insurance is a violation of base economics principles - it does not reduce risk, it only transfers it. Eventually, all net negative outcomes fall on the macro system - there's nothing created there, nothing to have, nothing but a hole.

[creeksneakers2]

66. It transfers risk to someone who can handle it

Or it should, if regulations can keep the game honest. If the risk is transferred, the new bearer should be as concerned as the first over whether the loss will take place.

[mbperrin]

68. Right, it only transfers risk. The system as a whole takes a loss, rather

than actually reducing risk and increasing systemic resources.

The individual may or may not "handle" it. The system as a whole cannot. All the outcomes of risk transfer are negative to the system: it encourages riskier behaviors which will inevitably have a higher fail rate than safer behaviors. So not only are the losses negative to the system, because the individual is encouraged in risky behaviors, we also cut the reward-work link. Reward comes whether performance does or not to the individual who has successfully transferred risk away from themselves.

In so doing, someone else is not rewarded for work they did do - it's a closed system. So after a while of no reward for work, and all reward for no work, is it any wonder that everyone wants to do nothing and get "rich"? That's collapse, and that's where we're at.

Actually REDUCING risk makes sense - use a heavy duty ladder to hold your 300 pound carpenter - you get to make more products, and you keep the services of your carpenter. But insurance allows you instead to continue to use your lightweight ladder, because if the carpenter gets hurt, you get paid by the insurance company. What else have we got? A ruined ladder (waste of resources building a useless or inappropriate product) and an injured non-producing carpenter, who is now using other resources just to get him back where he started (if possible). Because medical care is more expensive than ladders, and because we have at the least lost some production from the carpenter, the system loses. But you think everything's good, because you have money in your pocket, just as if you had finished the project.

The unfinished project is another loss to the system. And when enough people file enough claims, premiums cannot cover, and so the rest of us must then chip in to "save" the insurers, although it's just like "saving" cancer.

So once again - transferred risk is a disaster, reduced risk is a plus. Insurance encourages the first, discourages the second. That's bad.

[clear eye]

67. Read that previous Regs were gutted by the 1999 law promoted by the SEC

That the European Union objected to the way it was being implemented, especially regarding removal for requirements for asset/risk oversight formula. They complained that large U.S. financial institutions no longer complied w/ international agreements? laws?, and the SEC stonewalled them, eventually saying something to the effect of "Don't worry, we'll guarantee them ourselves, and have the Fed reimburse your banks in the event of a failure, and if that isn't enough we pledge the full faith of the U.S. Treasury" or some such. That's a huge part of our current predicament, and although the article dated back to before the missing $12T or so from the Fed, that also must be a big part if not the full reason for it. Sorry, but can't find the specific well-documented article I read last October, but I remember the gist well enough to be sure it would stand up to research. Robert Rubins, Larry Summers, and Timothy Geithner were all major players at the time.

Just who do you suggest is powerful enough to do an effective real-world job of regulating these players and institutions? Why shouldn't we expect that when the next "sure thing" "too good to pass up" comes along, they will get taken in again by their own hype and get in too deep before some measly little bureaucracy can catch up?

I'm sorry, but given how these folks at the top see the U.S. Treasury and its full borrowing power as their own piggybank to risk as they see fit, I have to agree with the previous poster that we're better off if financiers are forced to go back to dealing with risk the way they did before derivatives came along. The downside of their transgressions against more complicated regulations causes way too much suffering, and threatens the economy in ways we are not even sure it can ever recover from.

[mia]

19. Geithner is strengthening the dam, until the coup is complete.

I'm starting to believe that no American president has been in charge for a very long time.

[clear eye]

21. That's a choice they make.

FDR was threatened with a military coup, but didn't turn over his control to the economic elite. Any President who feels backed into a corner by these creeps needs to write a detailed account to be read in the event of his untimely death, secretly give it to someone trustworthy, then go about the business of leading this large nation for the common good to the best of his/her ability. They were naive if they didn't picture the kind of pressure and personal danger that comes with the job. It's akin to leading troops into battle--make no mistake about it.

[mia]

22. Is our President solidifying the control of the economic elite?

Is there such a thing as an "economic coup"? Thanks for your reply.

[clear eye]

29. I'm not in the sessions in the White House so I can't answer

if the President is actively or passively participating. All I know is the same as everyone who's following the news on our government's actions on the economy, that the major financial institutions that were most involved in creating our current crisis, continue to get everything they want with only the smallest consideration given to other critical needs or other prescriptions for recovery. So in the sense that they are still allowed to call the shots and swallow almost all our resources even after their worst failure, their control has been solidified.

The ascension to power of the Third Reich in 1933 could be seen as an example of an "economic coup"; as could also the overthrow of Allende in Chile and installation of Pinochet. Taking the broad view, allowing our federal elected officials to spend as much as they can get in political campaigns along with the Supreme Court's designation of corporate campaign contributions as "free speech", could be seen as a sort of slow motion "economic coup" that is bearing fruit now. I'm told that in the UK, campaign seasons are limited to a few weeks, and the major media are required to give free air time in equal amounts to all candidates for federal offices, in order to lessen the corrupting influence of campaign donations.

I hope this begins to answer your question. I think if you continue to pursue answers to your questions by reading various knowledgeable sources, you are engaging in the best sort of citizenship. You'll also lessen the danger of accidently voting against your own interests. Many good sources show up in "Late Breaking News" and "Editorials and Articles" in DU. Some of my favorite authors of books that analyze issues for regular people, are: Robert Kuttner, Thom Hartmann, Thomas Frank, and David Cay Johnston. Bill Moyers' Journal often invites the authors of eyeopening books, and you can find many in the online archives of the show. Getting on the email lists of advocacy groups that are trying to advance the common good is a way of keeping up with the latest developments in their particular issues, if you can live with the constant pleading for donations after you have given all you can. You have to make your own mix to fit your available time.

Thank you for asking such a provocative question.

[mia]

37. Thank you for your insights and suggestions.

I'm going to follow economics discussions more closely. I think that issues such as these could unite Americans no matter what their political leanings. Partisan politics promotes infighting and helps to keep us all in the dark.

Bill Moyers has been a favorite journalist for a long time.

[Badgerman]

63. Excellent points. thanks n/t

[pjt7]

23. Good posts Clear Eye

What do you see as our best hope for chipping away at some of global investment banks political/financial power?

What do you think about H.R. 1207, bill to audit the FED, which has 175+ co-sponsors.

[clear eye]

25. I think those answers have to come from geniuses like Stiglitz & Roubini.

What I think the next move of citizens like ourselves has to be, is to band together to get them to the table. Like we are starting to join to let advocates of single-payer be heard. We can demand they be invited to testify to the Congressional Joint Economics Committee. Then we can push for their recommendations.

You were asking me about the bill to require transparency of the Fed? My guess is that w/o different people in the critical economics positions in the Administration and Congressional leadership that is willing to strongly enforce their subpoena powers, that bill would be unenforceable. The Fed would continue to withold info with impunity. But I still would prefer to leave recommendations for dealing with this tangled problem to the best economic minds of our time.

[pjt7]

33. there is a pretty big grass roots movement for the fed bill

granted it's mainly the ron paul crowd. but grayson (D) of FL & Sanders of VT are also behind it. IF we could get more financialy knowledgable progessives, we'd really have a citizen force to reckon with. Kucinich needs to jump in the water.

[Hannah Bell]

58. fdr was a member of the economic elite.

[Tierra_y_Libertad]

31. New boss, meet the real bosses.

[upi402]

32. Ha! We'd need an opposition party to stop it.

And we aint got one. oopsie!

[bvar22]

35. I AM the Opposition Party !

"bvar22....Party of One.....
...Your table is ready."


If the priority of BOTH Parties is WAR and Bailouts for Billionaires, we refuse to pay anymore.

We QUIT in 2006.
We sold everything, and moved to the Woods.
Taxable Income is near Poverty Levels.
No Credit Cards or loans.

We almost NEVER buy anything "new".
What we can't make ourselves, we buy second hand or salvage from the previous owners.
We grow or raise a significant percentage of our food.

We are no longer "Good American Consumers".
Next year, we will "Consume" even less.
They (Democrats AND Republicans) will have to have their WARS and "Bailouts" without our help.


We have never been happier.

[Greyhound]

52. If 15% of our population just quit playing their game, it would collapse for good

in less than a year.

Good on you.

[debunkthelies]

36. Amen

to that, it's not just we should stop them it's WE MUST STOP THE CROOKS no matter who they are.:grr:
This is our Country 'not' theirs.:mad: And we damn sure better let them know that.:patriot:

[Hawkowl]

39. Change we can believe in!

(Void where prohibited. Not offered in the continental United States).

MMM. Can we have another shit milkshake Mr. Geithner?

[JackRiddler]

41. Yeah, because the Federal Reserve did such a good job of regulating the banks on OTC derivatives.

[creeksneakers2]

46. Money was controlling this

Under Bush and the GOP there was zero regulation. Obama and Geithner are regulating the industry. The industry no longer controls what the government does. If you think that the only way to look out for the public interest is to destroy the upper part of the financial system I don't expect Obama or anybody else who holds significant elected office to agree with you.

The article you link to does not support the conclusions you've drawn. It says that the industry proposals were just an element of the plan. The plan goes well beyond what the industry proposed.

If you are going to regulate an industry, you need to establish requirements on the participants. Since not everybody can meet requirements, like say for example holding $100 billion in reserve, any regulation leads to barriers to entry for that business. Therefore, regulated industries will end up being like clubs.

Its basic 101 public policy formation to involve stakeholders in decision making. The stakeholders bring experience and expertise to the process. Consulting them might result in them offering to accomplish all the policy goals but in a way that is less burdensome on them. Its also possible that the policy formulator would make a mistake because they didn't understand or were misinformed. That, and including stakeholders in the process, makes them more likely to comply.

Everything that is good for business is not bad for the public.

[farmboxer]

49. I am so disappointed

Was my vote wasted?

[Greyhound]

53. "The master's tools will never dismantle the master's house".

We've known that for a long time, yet we keep expecting the masters to give us a fair deal and are shocked every time we get screwed again.

I'm convinced that if the outrages committed over the past few years are allowed to pass, we will never stand up as a people again. This is the illusion of regulating an industry that does nothing to benefit the nation, it exists merely to enrich a tiny number of parasites to the detriment of millions.

[leftofthedial]

64. geithner *IS* the Wall Street plan.

judging from the wholesale Democratic retreat from everything promised in campaigns since 2006, I'd say we've been had.