cryptogon.com news – analysis – conspiracies

May 6th, 2010

Via: Josh Fulton:

Chris Dodd, everybody’s favorite hairdo, has introduced a “tough” financial “reform” bill that he claims will “limit the risk [financial institutions] can assume.” Of course, most people with a pulse realize that a 1565 page bill introduced by one of the top recipients of financial industry lobbyist money in Congress probably will do little to ‘reform’ the financial industry in the best interests of the American people. That, however, doesn’t fully capture the perniciousness of this bill. When we look at it closely, we can see it is one of the most dangerous bills introduced in Congress in years.

One of the worst parts of Dodd’s bill is that it institutionalizes “too big to fail.” Bank holding companies with assets greater than $50 billion and nonbank financial companies supervised by the Board of Governors of the Federal Reserve are required to pay into a $50 billion “orderly liquidation fund.” (Dodd gave verbal assurance on May 4th that this provision would be eliminated, but Dodd’s bill still needs to be reconciled with the House bill, which contains a $150 billion fund.) Why should a fund be necessary to liquidate a business? Well, to pay off creditors, that’s why. That’s the premise of “too big to fail”: if a large, interconnected firm fails, it could cause the collapse of its creditors, which could in turn cause the collapse of the entire economy. (If you believe that one, I’ve got some land in Florida to sell you.)

Economy, Elite | Posted in Dictatorship Top Of Page