Comments on: Why the Fed can’t protect consumers

By: paul

paul — Wed, 30 Sep 2009 00:10:08 +0000

Even the “automatic” stuff depends on regulators — you need people to audit and make sure that companies are reporting accurately; you need other regulators to make sure that the things required of different “automatic” classes of company are in fact happening. Otherwise it’s a whole lot of sailboat fuel.

The question (as usual) is how you align the interests of the regulators with those of the public, or at least with the continuing existence of well-enforced regulation. Only way I can see is putting a whole lot of friction in the revolving door. This requires increasing compensation in the public sector and reducing it in the private, or perhaps something drastic like letting public employees in on qui tam suits…

By: jason

jason — Mon, 28 Sep 2009 22:29:09 +0000

Consumers have to look after themselves. The fed is a private entity with one thing in mind. To make a profit. The fed creates the money out of thin air and makes interest off of nothing. If it fails they get the goods and if not they get interest. Why do they want to police anything? Silly really. The U.S. federal government is so badly corrupt, you have to look out for yourself. I love greenspans statement.. “and that the Fed’s involvement might give borrowers a false sense of security.” This idea can be applied to every federal agency. Except of course the Federal Reserve for they are not federal and contain doubtful reserves. Look after yourself.

By: Carlomagno

Carlomagno — Mon, 28 Sep 2009 21:24:30 +0000

Hint: http://tinyurl.com/y8lklj6

By: Carlomagno

Carlomagno — Mon, 28 Sep 2009 21:23:28 +0000

Ahem… excuse me, who wrote the following on 29 August 2009:

“This is one more reason why consolidating regulatory power in the central bank is a good idea: even if the central bank isn’t totally independent, it’s more independent than any other regulatory agency is ever going to be, and therefore less likely to become filled with political hacks. Say what you like about the Fed, you’re not going to see it demonstrate the kind of premeditated spinelessness that the SEC commissioners showed over most of the past 10 years.”

By: dvictr

dvictr — Mon, 28 Sep 2009 19:48:24 +0000

any correlation you find between “deregulation” and the current financial crisis is flawed and certainly does not imply causation.

you might be blaming the right person for the wrong reason. greenspan dipping his toes in “deregulation” isn’t it>

By: Paul

Paul — Mon, 28 Sep 2009 18:48:39 +0000

This may sound absurd but you make a lot more sense than anyone I know or hear talking about fiscal policy. I’d vote for you in a heartbeat.

By: lark

lark — Mon, 28 Sep 2009 16:20:50 +0000

“Police might not be a good analogy. They usually don’t go out looking for crimes at random..”

Read the WaPo article. The most important point was that the Fed was deluged by community watchdogs and similar groups with explicit reports of subprime malpractice and they consistently refused to do anything about it, for ideological reasons. The article showed a Fed which is completely untrustworthy in terms of looking out for consumer interests.

By: jonathan

jonathan — Mon, 28 Sep 2009 16:19:00 +0000

Do you sometimes think about putting something stupid in your posts so more people will comment? It’s difficult to say “I agree” so much.

By: Noumenon

Noumenon — Mon, 28 Sep 2009 16:00:19 +0000

Policework, by its very nature, involves a lot of effort and no certainty of results. That doesn’t mean there shouldn’t be any policing.

Police might not be a good analogy. They usually don’t go out looking for crimes at random. Instead, they wait till the crimes are reported and then find out who did them.