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  A Stealth Scheme for Global Monetary Control
When politicians plan reform, it's wise to be skeptical and hold on to your wallets. So fixing the economy by bailing out Wall Street is wrecking it, and Obama's proposed health care reform taxes more, provides less, places profits above human need, avoids the most vital solutions, and leaves a broken system in place. Now there's "Financial Regulatory Reform, A New Foundation: Rebuilding Financial Supervision and Regulation" - announced June 17 with Obama saying he'll send Congress a plan to create new government agencies, give the private banking cartel Federal Reserve more power, and address five major problems needing regulatory and legislative measures to fix. Addressing business executives in the White House East Room, he said: "A culture of irresponsibility took root from Wall Street to Washington to Main Street" with no mention that months of it worsened on his watch. "A regulatory regime basically crafted in the wake of a 20th century economic crisis - the Great Depression - was overwhelmed by the speed, scope and sophistication of a 21st century global economy." In fact, 30 years of deregulation since the late 1970s, not technology, caused speculative excesses, market bubbles, and inevitable collapses that always follow. Of course, these problems are endemic under a system that's crisis-prone, unstable, anarchic, ungovernable, and self-destructive through repeated cycles of booms creating bubbles, then busts, followed by recessions or depressions with today's collapse grave enough for Michel Chossudovky to call it "far more serious than the Great Depression (because all) major sectors of the global economy are affected." An 89-page Treasury Department pdf is available online for those inclined to read it. Along with an introduction and summary of recommendations, its five major objectives are to: I. "Promote Robust Supervision and Regulation of Financial Markets
II. Establish Comprehensive Regulation of Financial Markets
III. Protect Consumers and Investors from Financial Abuse
IV. Provide the Government with the Tools it Needs to Manage Financial Crises (and)
V. Raise International Regulatory Standards and Improve International Cooperation" -- a new regulatory "Financial Services Oversight Council;"
-- more power to the Fed over "all firms that could pose a threat to financial stability, even those that do not own banks" such as insurance companies;
-- stronger capital standards for all financial firms;
-- a new "National Bank Supervisor" over all federally chartered banks;
-- registering hedge fund advisors;
-- new regulation of securitization and derivatives markets;
-- increased market transparency and the effectiveness of credit ratings agencies;
-- originators of loans packaged into securities to retain some of the credit risk;
-- broker and loan originator compensation changes away from income up front to spreading it out over time and making it dependent on the performance of loans they make;
-- a new "Consumer Financial Protection Agency" to safeguard them from potentially harmful complex financial products, including securities, mortgages and credit cards;
-- "stronger regulations to improve the transparency, fairness, and appropriateness of consumer and investor products and services;"
-- new ways to "resolve nonbank financial institutions whose failure could have serious systemic effects;"
-- changing the Fed's "emergency lending authority to improve accountability;"
-- establishing "wind down" authority to take over large financial firms like AIG, Fannie and Freddie; and
-- international reforms, including greater oversight of global financial markets and more control through a process whereby G-20 countries cooperate in regulating transnational companies. This looks like the most insidious, outlandish, and dangerous provision. More on it below and its likely importance. America has a legacy of failed public agencies as well as regulatory and legislative reform - for lack of teeth, oversight, and most important because financial and other industries end up self-regulating, consolidating, and growing more powerful at the expense of the public interest. Giving the Federal Reserve more power lets banking giants make their own rules, decide how and whether to enforce them, and thus mainly operate as they wish because no one in Washington dares challenge them. Michael Hudson agrees in his new article titled: "Instead of Real Financial Reform, Obama's Plan capitulates to Wall Street." He explains that supposed reforms promote "Wall Street's 'product,' debt creation, at the expense of the economy at large, and lets financial chieftains continue to self-regulate the debt industry - and by the way, to keep all their gains from the past decade's worth of fraudulent lending, scot-free....(He) achieved what no Republican could have: rescuing the Bush administration's pro-creditor policies that fostered the Bubble Economy in the first place." The plan is laden with a "false diagnosis" and "fatal flaws," so clearly what's proposed are "wrong-headed cures (but hardly) by accident." If it's largely accepted as is, Wall Street will get precisely what it wants - a veneer of regulatory cover to keep wrecking the economy and stealing the public blind. Simon Johnson is also critical. He's a former IMF chief economist, now teaching at MIT's Sloan School of Management. After reviewing Obama's plan, he expressed great skepticism. Even though large banks and other financial institutions caused the global crisis, no wrongdoing on their part is cited nor are punitive measures proposed. He states: "There appears to be no mention that corporate governance within these large banks failed totally. How on earth can you expect these banks to operate in a responsible manner unless and until you address the reckless manner in which they (a) compensate themselves, (b) destroy shareholder value, and (c) treat boards of directors as toothless wonders? The profound silence on this point from the administration - including some of our finest economic, financial, and legal thinkers - is breathtaking...." "Based on what we see so far, there is little reason to be encouraged. The reform process appears to have been captured at any early stage - by design the lobbyists were let into the executive branch's (planning process), so we don't even get to have a transparent debate or to hear specious arguments about why we really need big banks." "Now lobbyists....will head to Congress to try to influence the final product" with no doubt they will so once again consumer interests will be shortchanged - perhaps globally given events reported earlier this year and discussed below.
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Commentary 
