I am up and at my screen every day at 6 AM to read the morning scans from across the country. In today’s Wall Street Journal and New York Times there are articles about the Consumer Financial Protection Bureau (CFPB), the new agency created by the Obama Administration to oversee and regulate the financial industry.
I really try to keep politics, at least in terms of Republicans versus Democrats, out of the show and out of this blog. I find that the political aspect of the financial crisis is nothing more than a distraction from the real issues the show and the blog illuminate. The real issues can be summed up as follows:
1- Americans have been manipulated and abused by giant financial institutions to the point that the system is irreparably broken.
2- As a result, Americans standard of living is declining. We are losing our jobs, our careers, our homes and our savings.
3- The government has, up to now, failed us by continuing the status quo.
4- The only way Americans are going to survive is to fight and to change the institutions that did this to us. We have to take away their power or dilute their power.
… Back to the CFPB. Wall street hates the CFPB. I attach a copy of the WSJ article and I want everyone to invest three minutes to read it. The most illuminating part of the article is the quote from the GOP’s letter to the president as to why they oppose the CPFB. The letter states:
"The present structure of the Consumer Financial Protection Bureau…violates basic principles of accountability and our democratic values,"
If this statement wasn’t sad it would be funny.
The CFPB is created to be completely INDEPENDENT of congressional funding, congressional rulemaking and congressional oversight. THIS IS WHY IT WAS CREATED THIS WAY!! Some very intelligent people and incorruptible lawmakers (yes, there are still some) recognized that the system is run by people who were AT BEST too blind to forecast the crisis and take action, OR at WORST too corrupt to want to.
Back to the GOP’s letter. Really now? …violates basic principles of accountability and our democratic values. That sounds terrible, almost like fascists will have oversight and dominion over the wonderful, efficient, benevolent and responsible lending institutions and regulatory bodies that got us into this mess in the first place.
This is how the system works. The Department of the Treasury collects revenue and prints money. Treasury gives the money to congress to spend and also gives a lot to the Federal Reserve banks to distribute (loan) to banks around the country. The Federal Reserve also determines the amount of interest they charge the banks for using OUR MONEY. Right now the interest rate is ¼ of ONE PERCENT. Each federal reserve bank in its district has a board of governors. The governors meet in Washington D.C.. The Chairman of the Board is BEN BERNANKE. I do not recall ever seeing an election for FEDERAL RESERVE governors, Members of the board, or for FED Chairman. They are appointed by politicians.
Who are they accountable to? Who governs them? WHO ELECTED THEM? ….Nobody!!!
Congress is supposed to, but they don’t. They don’t because they can’t. Or maybe in theory they could, but just won’t. Our country’sdemocratic form of government is based on checks and balances between three branches, Executive, Legislative and Judicial. This is so that any one branch does not have unlimited power. Only federal judges are appointed for life. Everybody else is elected.
Our government is all about who controls the money. There is just as much competition for the money between Republicans and Democrats as there is between the President and Congress. But that is what we get to vote for every 2 and 4 years.
We got into this financial mess because there are no checks and balances when it comes to our money supply or monetary policy. The FED is supposed to keep a close eye on the banking system and make sure it is behaving in a responsible manner. Alan Greenspan’s (former FED Chairman & former nom de plume for GOD) explanation for the financial implosion happening during his watch was (I quote him very loosely) “I didn’t think they [bankers] would be so irresponsible and greedy”. Who was watching Greenspan while he was watching the banks? Apparently nobody.
As far as the CFPB is concerned… well, maybe there should be another pair of eyes looking over the shoulder of the guy who is looking over the shoulder of the guy who is looking over...
WSJ Article:
NYT Article:
About the Federal Reserve System:
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