Are Consumers Finally Winning in Washington?
By Ron Paul
Published 09/21/10
This past week the administration announced its choice for the first credit czar at the new Consumer Financial Protection Bureau. This bureau was created as part of the supposed Wall Street reform bill recently passed by Congress. This new bureau, which represents nothing more than another layer of useless Washington bureaucracy, will be housed within the Federal Reserve — one of the most anti-consumer institutions in Washington.
The appointee named to run the bureau is an Ivy League professor. By her own admission she is an academic, not a business person. She has very little real world business experience with the highly complex financial instruments she will oversee. The administration has done nothing to refute her characterization by some in the financial press as an anti-business, ivory tower leftist with an aversion to free market principles.
She also admits to being told, or warned, that the big banks always win in Washington — yet she trumpeted the creation of this new agency as a win against those banks. I would caution her against declaring victory too soon.
Outrageously, she has been appointed as a “special advisor” to design and lead the bureau, but the administration has not disclosed the exact length of her term. There will be no Senate confirmation hearings, nor will the public or the financial industry be allowed to comment on her appointment. We simply are expected to accept the appointment of an enormously powerful regulator without question, and without regard to the constitutional requirement that the Senate advise and consent with regard to her appointment. This means you, as a voter and citizen, effectively have no say whatsoever for the duration of her appointment. In the meantime, she has unprecedented new powers over private business decisions.
The truth is that this new bureau is just more of the same ineffective and damaging regulation we typically get from a crisis. Just as the FDA serves big pharmaceutical companies, not patients, and just as the SEC serves Wall Street, not investors, this agency will end up serving the banks. All regulatory agencies eventually become co-opted by the industries they regulate, and they become chiefly concerned with restricting the entry of new competitors and protecting market share for the big players. This new bureau is not likely to straighten out Wall Street, so much as it will instill a false sense of security in the public about banking and investing again.
No bureaucrat, no federal agency, and no ivory tower academic can replace the regulatory powers of the free market. “Caveat emptor” remains the rule for intelligent investors and depositors. Buyers always need to beware, especially when politicians say they have it all under control.
Real reform starts with transparency and an adherence to the rule of law. The administration would do well to adhere to the law, rather than shoving a new economic czar down our throats without congressional involvement. Real reform would mean taking steps toward restoring sound money and getting back to the Constitution. The Constitution does not allow for favors to special interests, or handing out public money to keep private businesses afloat. The Constitution necessitates a small, impartial government that first and foremost, protects liberty, and sees all citizens as equal. It does not recognize a special banking class. The fact that measures to achieve these ends are still quashed tells me that indeed, the banks do still win in Washington.
Apollo says:
Is Ron Paul jealous, or pissed that Congress (especially him) was not involved in the ‘credit czar’ appointment?
Even before the credit czar takes office, she already triggered an earthquake along the the concrete wall of Wall Street that extends deep into the house that is White. Larry Summers, the economic czar, is resigning. See Larry, also an academic professor, sees the writing on the Wall, punt intended. He knows what professors can do to each other when there is one too many in the same kitchen. He knows what SHE can do over his and Timmy’s head. Time to get out.
If Timmy can read the Wall, he should find a suitable academic position real soon.
Now Ron, can we talk? You have talked a whole lot in your career in Congress. Some actually make sense. But you have failed miserably to execute anything, and to make any material impact. I can understand why you’re jealous. Look, this consumer protection lady coming in will shake and bake a hundred times more chicken than you ever will. Be nice, sit down and just eat the dinners she cooks.
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21st September 2010 at 11:31 pm
printmemoney says:
you gotta be kidding apollo
the reason ron paul doesn’t push more of an agenda is because stupid donks like you don’t vote for more people like him
He’s probably pissed that his constutional authority has been shit on since he’s been in office.
He’s probably jealous of the dutch because of their fiscal sanity in a fiscally insane world.
http://finance.yahoo.com/news/Dutch-government-to-cut-apf-4011473860.html?x=0&.v=4
Do you understand the federal reserve? Do you understand that it is an unaudited institution owned by the largest banks of this country that prints money out of thin air when it needs to bail out its shareholders?
your ignorance frusturates especially when it is directed at one of the only politicians we have that is an independent thinker and hasn’t been purchased by corporate and or union america
Its good to know I don’t need to check this site daily to realize our country is still F”"”"”
enjoy the bread lines……
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21st September 2010 at 12:00 am
flash says:
Apollo says: ” Even before the credit czar takes office, she already triggered an earthquake along the the concrete wall of Wall Street that extends deep into the house that is White”
BBWWWAAAHHH… You mean Elizabeth Warren , the grandmotherly finger-wagging TARP Czar in charge tracking down the illicit spread of taxpayer monies amongst the International Banking cartels ?And ,exactly how much money did she recover or how many thieving bankster thugs did she put in the Graybar Motel?
Oh yeah , she’s had the big money players quaking in their boots , which is why they want her working with the FED to regulate credit.
When this timid sheep of a team players grows a sack to carry her imaginary balls in get back with me.
The gist of the matter is that it’s the responsibility and duty of Congress to get our fiscal house in order and not some frikkin unelected Czar acting in the interests of a Fascist puppet posing as the Great Leader.
And you claim you don’t believe in tales of Sky fairies
Men who keep sending women in to fight their battles will continually be disappointed with compromise and capitulation.
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21st September 2010 at 6:02 am
Administrator says:
Apollo
Czar is a made up position that has no real authority or responsibility. Are you in favor of unaccountable unelected unvetted czars running our government? Just trying to understand what you favor.
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21st September 2010 at 9:02 am
Apollo says:
Hmmm … I note 9 Down Thumbs on my piece. Excellent. I love being contrarian and right.
“Czar is a made up position that has no real authority or responsibility.”
If you’ve been in position of power as I have, and been in position to setup your own job, then you would appreciate things differently. Warren appointment to the WH job is a specific requirement of the financial law that created it. It specifies a approx. 1-year position to establish the agency. It specifies that the agency to reside WITHIN the Federal Reserve. Meaning: 1) It’s operation to be paid for by the Fed budget, outside of official government. 2) It reports to Congress in a quasi manner as Fed does, and thus much less subject to political influence. 3) It’s power is pretty much whatever it pleases without further legislation. 4) It stops the Fed, and thus the banking elites, from fighting the agency. The downside, and a big one, is how does it enforce things without the vast legal powers of the Treasury. Can it order the SEC or FBI to arrest non-compliance? But the Fed already has its own enforcement powers – it issue all kinds of banking licenses.
Warren job at the WH is to setup that whole thing, along with hiring key team members. She has total freedom to setup a brand new agency chartered with vast regulatory powers.
“Are you in favor of unaccountable unelected unvetted czars running our government”
The Fed has always been given regulatory powers but the focus is on regulating the banks (reserve, margin, interbank transactions, etc). There a vague wordings on regulating financial for consumers, such as mortgages. Indeed, Fed role of mortgage regulation is to protect the bank, not the consumer. It has failed to use them under Greenspan.
The new law ‘punishes’ the Fed by creating a separate regulatory body within it, financed by it, yet is totally independent from it. The Fed chair cannot order the Consumer Protection agency what to do. This is the first direct intrusion by Congress into the Fed. The law gives the agency a long list of responsibilities that it MUST do. The agency head reports directly to Congress and becomes part of the Treasury economic coordination team. Agency head is like a Secretary, appointed by the president and confirmed by the Senate. This Agency does not run the government. It regulate every aspects of financial services affecting the consumers.
Warren has one year to make it happen. She makes this baby anyway she sees fit within the law. If she wants the agency head job at that time she will likely get it but much depends on what happen after the Nov. election. My take is she does not want it. Holding such vast powers require political experience.
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21st September 2010 at 1:20 pm
Gemini says:
Holding such vast powers require no political experience. It requires a backbone. I doubt she has one.
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21st September 2010 at 8:10 pm
Apollo says:
@Germini
Why do you think she got the job? By being ‘just’ an academic? There are thousands of academics. But there is only one who 1) has the intellect to originate such an outrageous idea as a consumer protection regulator who dare to tell the bankers how to run their business, cut their God-given profits, and restore ethics, way before things blew up; 2) has the courage to challenge and criticize the practices of the entire banking industry on leverage, derivative and raping of consumers. Wall Street hates her guts probably more than Communism. That’s backbone galore in my book.
Do research on the facts and career on Liz Warren before you say things above your head.
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21st September 2010 at 9:38 pm
Gemini says:
Time will tell If I am saying things above my head. As you say she has a year. Will the agency be all you expect it to be? I somehow doubt it. She will bend like a reed in the wind. At best this will amount to a very long leash for the banksters, when they deserve a bullet.
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21st September 2010 at 10:21 pm
Administrator says:
Liz Warren will do nothing to protect consumers. Anyone who thinks a do gooder professor from Harvard will scare the mega banks is a fool. The banks have already figured out how to manuever around every restriction from the 2,300 pages piece of shit financial reform bill. I didn’t realize how easily Apollo could be snowed. I have a few condos in Miami that I can give you a great deal on.
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21st September 2010 at 10:25 pm
StuckInNJ says:
Sweet.
Another government agency.
Another bunch of fucking clueless bureaucrats enacting laws “for our good”.
Super sweet. More government bloat. More rules to protect us from ourselves.
You people who want to “give this a year” really need to get out more often. Read a little more. Then get back to me and name JUST ONE government agency that does its job well.
Puh-lease! Get a fuckin clue.
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21st September 2010 at 12:30 am
StuckInNJ says:
http://www.stopthecfpa.com/
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21st September 2010 at 12:31 am
Apollo says:
Snowed?
- Well, I did say I don’t understand the enforcement power. Because I have not read the entire 2300 pages. But I figured Liz should know before she took the job.
- I won’t go so far as to call 2300 pages ‘shit’. Let’s see. A whole lot of people is watching like a hawk. To me, it is a first step. There must be a next step, to fix what hasn’t worked, to add new things. This is reality. Deal with it instead of brushing the whole thing aside like a child.
- Stuck: Consumer Protection, when its up and running in a year, will not be a government agency. It resides not in the Exec branch. It is part of the Fed Reserve System. You can laugh or cry, but stop shitting things you don’t know.
- As to Florida condo, I did check out a few near Orlando. The prices are just a steal. I can buy a 2 bedroom paid full in cash with just half a year of play money. But I walked. I am 63, been around, seen this and done that. Hard to snow me.
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21st September 2010 at 2:01 am