Senate Gives More Power To Federal Reserve

Because who better to issue price controls for debit card access than the Federal Reserve? These people are insane.

Senators led by Richard Durbin, the Illinois Democrat who pushed to include the fee caps in the Dodd-Frank Act, turned back the proposed delay Wednesday in a 54-45 vote that left the amendment six short of the 60 needed for approval.


"We should let the Federal Reserve issue this rule," Durbin said before the vote. "If more needs to be done, I'm on board, but the notion that we can't even trust the Federal Reserve to come up for a rule on this is just plain unfair."

A few more frustrating details:

The provision requiring the Fed to set fair debit card fees was included in last year's financial overhaul law by a 64-33 Senate vote and was written by Durbin. There was no separate House vote on the issue.

There was no separate House vote because Dodd-Frank was passed by a process known as reconciliation, which means that a committee wrote the final bill that the President signed without either the House or Senate having to pass the actual legislation.

How can you fight against this kind of blatant corruption?

The effects of the bill were predictable. Price controls cause shortages:

San Francisco's Visa Inc. and MasterCard Inc., the world's biggest payment networks, dropped the most since Dec. 16 after the vote. Visa fell 3.11 percent to $76.71 in New York Stock Exchange composite trading, after falling as low as $74.37. MasterCard declined 1.53 percent to $270 after reaching a low of $258.34. Shares of U.S. banks also slipped.


The Fed now has until July 21 to implement the final rule on capping the fees, which accounted for more than $16 billion in 2009, according to the Fed.

Don't worry about our politicians, though. They'll always have access to the credit and banking system they want. They just want to prevent the people from having that access.

Giving yet more power to the Federal Reserve through a transparently corrupt process, yet another reason to repeal the 17th Amendment.

Thomas DiLorenzo: The Revolution of 1913

He talks about the 17th Amendment, the 16th Amendment, and the Federal Reserve, and describes how those ideas started with Alexander Hamilton and evolved through Lincoln and the War for Southern Independence.

Senate To Vote On Frank-Dodd Financial Bill This Week?

According to Bytestyle TV (Who got it from Downsize DC):

The Senate will vote on the Frank-Dodd financial (non)reform bill (H.R. 4173) this week and possibly as soon as today. Although it has the votes to pass, it doesn't yet have the 60 votes needed to break a filuster.

This bill will only strangle our already-ailing economy, and will do nothing to prevent future financial collapses or bailouts. Please tell your Senators to support the filibuster and oppose Frank-Dodd through our Reduce Regulations campaign.

You may borrow or copy from this letter . . .

Reducing regulations would actually be the best reform of the financial system. The fraudulent Dodd-Frank bill will only create powerful new armies of regulators who won't actually reform anything.

As David C. John and James L. Gattuso of the Heritage Foundation point out:

* At 2,300 pages, none of you will have read the bill or know what, exactly, is in it
* The bill empowers regulators to seize private property and "wind down" firms they, and they alone, judge to be "failing."
* A Committee to guard against "systemic risk" won't possibly possess all the knowledge to do their job, and will only discourage and stifle innovation
* The Consumer Protection bureau will reduce the number of options and choices of informed, responsible customers
* The new bureau will also issue supposedly "consumer-friendly" regulations that will conflict with the goal of other regulators of protecting the safety and soundness of financial firms
* By abolishing retail debit card fees (a practice that had nothing to do with the crisis), banks will be forced to raise revenue other ways such as eliminating free checking (and some banks have already begun to do this)
* The bill does nothing to reform Freddie Mac and Fannie Mae, two firms that played a huge role in causing the financial crises - which makes future bailouts probable

It gets worse . . .

* A provision to audit the Federal Reserve was gutted in the final bill
* Section 342 seems to require quotas for women and minorities for government agencies and contractors, as if current laws and current departmental civil rights enforcers weren't enough http://tinyurl.com/3997jfu

I don't see how this bill provides ANY benefit to me or to the nation. Instead of reforming our financial system, it just empowers politicians and bureaucrats to reward your friends and punish your enenemies.

A REAL reform bill would . . .

* require greater accountability in the market by forcing even large firms to face the threat of bankruptcy
* abolish "government sponsored enterprises" like Fannie and Freddie
* provide a real and thorough audit of the Fed, whose decisions did so much to cause the crisis.

Senate Votes To Audit Federal Reserve

A limited audit (via Hot Air):

"At a time when the Federal Reserve has provided the largest taxpayer bailout in the history of the world, the largest financial institutions in this country, trillion-dollar institutions,” Mr. Sanders said in a floor speech, “the Sanders amendment makes it clear that the Fed can no longer operate in the kind of secrecy that it has operated in forever.”

He added, “For the first time the American people will know exactly who received over $2 trillion in zero or virtually zero-interest loans from the Fed, and they will know the exact terms of those financial arrangements.”

The Senate's Financial Legislation: What You Need To Know

Hat tip: Americans for Limited Government

Hayek Versus Keynes Rap

Sunday Music Break

For anyone who hasn't seen this video, "Fear the Boom and Bust", take my word for it: it's awesome.

Tom Woods and Gene Epstein Debate on the Federal Reserve

The FreedomFest debates are starting to show up. Here's Thomas Woods and Gene Epstein debating Warren Coats and John Fund(?!) on what James Madison referred to as a "wicked project": fiat money and the Federal Reserve.

Part one of five:



Update: I originally included Ron Paul. That error has been corrected. My apologies.

The Fed Under Fire

Hat tip: Minnesota Chris

Senate Blocks Fed Reserve Audit

After delaying Cap and Trade, the Senate blocked legislation to audit the Federal Reserve:



Here's Senator Jim DeMint fighting for his amendment (Mostly boring procedural stuff, but he gets in a couple of good licks):



Until the 17th Amendment is repealed, the Senate, and the federal government, will continue to be subject to the same mob mentality as the House.

We'll Be Watching, Bernanke

"CBS" stands for "Columbia Business School", whose dean, Glenn Hubbard, made this video.

Hat tip (yes, again): Reason TV

Majority of House Cosponsors Ron Paul's Bill

A good first step.

Congressman Ron Paul's Federal Reserve Transparency Act, HR 1207, has reached and surpassed the level of 218 cosponsors in the House of Representatives, which means it is now cosponsored by a majority of the members.

The 218th cosponsor was Dennis Kucinich (OH-10), and the bill has since received its 222nd cosponsor.

“The tremendous grass-roots and bipartisan support in Congress for HR 1207 is an indicator of how mainstream America is fed up with Fed secrecy,” said Congressman Paul. “I look forward to this issue receiving greater public exposure.”

Hearings on Federal Reserve transparency are expected within the next month, as part of the Financial Services Committee's series of hearings on regulatory reform.

Do You Have Reservations?

Wapo:

"On the day before Thanksgiving in 1991, the U.S. Senate voted to vastly expand the emergency powers of the Federal Reserve.

Almost no one noticed.

The critical language was contained in a single, somewhat inscrutable sentence, and the only public explanation was offered during a final debate that began with a reminder that senators had airplanes to catch. Yet, in removing a long-standing prohibition on loans that supported financial speculation, the provision effectively allowed the Fed for the first time to lend money to Wall Street during a crisis.

That authority, which sat unused for more than 16 years, now provides the legal basis for the Fed's unprecedented efforts to rescue the financial system.

Since March 2008, the central bank's board of governors has invoked its emergency powers at least 19 times: to contain the wreckage of Bear Stearns and ease the fall of American International Group, to preserve Goldman Sachs and Morgan Stanley, to limit losses at Bank of America and Citigroup, to lend more than $1 trillion.

The repeated use of the once-dusty law has surprised and alarmed a wide range of people, including economists and members of Congress. It has even raised worries among presidents of the regional banks that make up the Federal Reserve system.

Many critics are concerned that an institution not accountable to voters is risking vast amounts of public money and choosing which companies get help. Others are concerned that the Fed's new role will interfere with its basic responsibility for regulating economic growth.

There is also a question about the roots of the crisis: Did investment banks take greater risks in the past two decades because they knew the Fed could rescue them?

The 1991 legislation, authored by Sen. Christopher J. Dodd (D-Conn.), was requested by Goldman Sachs and other Wall Street firms in the wake of the 1987 market crisis, and it would save some of them a generation later."

I guess that answers that question. Of course people will take more risks when they believe they will be caught if they fall.

Does November of 1991 mean anything to anyone? Does anyone recall anything in particular that happened that month?

As Brian would say, this is yet another example of why we need to repeal the 17th Amendment.