This is how the game is played.
Step 1: Make big political statement(s) via some high profile politicians in D.C. about how the Federal Reserve needs to be held accountable for what is happening to our economy (See Bernanke's recent confirmation).
Reason: Our leaders give the appearance that they hear the American people and are doing something about it.
Step 2: Issue a bunch of confusing rhetoric, disregard the wishes of the American people and push a hidden agenda forward.
If we stand idly by – the Federal Reserve (and therefore the cartel of international bankers) will continue to gain ever more power over us.
It’s not what people say – it’s what they do that tells us their true intentions.
Here we see our President and Senator Dodd’s true intentions. They are merely actors on a Grand Stage.
jg – March 17, 2010
March 16, 2010
Once-Chastened Fed May Gain Enhanced Role
Dodd Bill Would Give the U.S. Central Bank Lead Role in Monitoring Financial System
By SUDEEP REDDY
The Federal Reserve, battered by the public and politicians for months, emerged a winner in the latest Senate draft of legislation to remake the nation's financial regulatory system.
The bill that Senate Banking Committee Chairman Christopher Dodd (D., Conn.) unveiled Monday would maintain the Fed as supervisor of the nation's biggest financial institutions and give it a leading role in monitoring the financial system.
That is a departure from Mr. Dodd's initial proposal, which would have created a new agency to oversee banks, over the objections of the Fed and the Obama administration. The new bill also would make the Fed the home of a beefed-up regulator to protect consumers, though it would exert little control over it.
But the Dodd bill, which faces an uncertain future in the full Senate, would take oversight of thousands of banks with assets under $50 billion from the Fed and give it to other federal agencies. The change was fought by most of the presidents of the 12 regional Fed banks, whose role would be diminished by the change. The Fed has warned that the proposal would unwisely narrow its scope to 35 of the largest financial institutions.
The bill also would institute more political control over the Fed by giving the president—instead of the Fed—the power to name the president of the Federal Reserve Bank of New York. That person directly supervises major Wall Street firms and serves as vice chair of the Fed's monetary-policy committee.
"I don't necessarily see it as punishing the Fed but rather getting back to core functions and having clear lines of authority," Mr. Dodd said Monday.
The Fed's political standing waned throughout last year as lawmakers attacked its handling of bailouts and its failure as a regulator of mortgages ahead of the crisis. The anti-Fed sentiment nearly toppled Fed Chairman Ben Bernanke's confirmation to a second term as chairman, but his 70-30 victory in January appears to have been a turning point.
The Obama administration, banks and some Republican lawmakers have fought to keep authority inside the Fed instead of dispersing it to new agencies. Fed officials mounted a behind-the-scenes lobbying effort to maintain much of its authority.
"It looked like they [the Fed] were really going to be big losers in this," said Brian Gardner, a Washington analyst at the investment firm Keefe, Bruyette & Woods. "They've had Treasury on their side. They've had the industry on their side. The Fed may not have won every battle, but it was a consistent message coming from various parts of the banking industry that the Fed was the regulator to handle the biggest and most complex issues of the banking system."
Lawmakers view the Fed as one of the least political agencies in Washington, leading many to question the wisdom of transferring staff and starting a new bank-oversight bureaucracy, as Mr. Dodd initially proposed. "There really is no other game in town when it comes to the standing and the credibility to regulate the largest banks," said Cornelius Hurley, a former Fed lawyer and director of Boston University's Morin Center for Banking and Financial Law.
But the Fed's battered reputation—as an institution that failed on consumer regulation— yielded the awkward arrangement for a new Consumer Financial Protection Bureau.
The Fed would house the bureau and fund it. But an independent director appointed by the president and confirmed by the Senate would write and enforce rules and hire staff.
That issue, and others, could create a showdown with the House, which in December voted to create a freestanding consumer unit. The House bill maintained the Fed's role in overseeing smaller banks and allowed broader congressional audits of the Fed than the Dodd bill does.