That pretty well describes what's wrong with our government today. Consider this:
Between 1985 and 1992, over 2,000 banks failed, the consequence of deregulation, mismanagement, and fraud. They had largely been overseen by the Federal Home Loan Bank Board. In response to this crisis the Financial Institutions Reform, Recovery, and Enhancement Act of 1989 abolished the obviously broken FHLBB and replaced it with the Office of Thrift Supervision. President George H.W. Bush said at the time, "This....will safeguard and stabilize America's financial system and put in place permanent reforms so these problems will never happen again."
Here's what really happened according to reporter Chanda Joffe-Walt:
"I talked to several people who worked for that predecessor agency....and they describe that on that day, the day the OTS was created, they left the office, these agency employees, and they walked across the street to a hotel. They turned on the TV and watched the President sign the bill that established the OTS. Then they left the hotel, crossed the street, and went back to work. Pretty soon someone came by and changed the sign to "The Office of Thrift Supervision."
The OTS was one of several regulators who were asleep at the wheel, allowing the banking bubble to build, and eventually burst, in 2008. It was disbanded in October, 2011 and replaced by yet another alphabet regulator. You think anything has changed this time? Oh, and it gets no government funding, but is paid for by fees from the financial institutions they oversee! And very well paid they are, too.
"Sleep well....your Government is on guard."
S
Source: 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown by Simon Johnson and James Kwak
Next week, something more fun to read, I promise. :)
Makes you scratch your head and wonder, "What the f..."
ReplyDeleteForget scratching my head - I'm just going to bang it on my desk for a while!
ReplyDeleteSo...what do we do? More regulation? Less regulation? Different regulation? I know many people tend to belittle Canada (too European, too French, and they have that socialist health care thing going on), but do you know how many Canadian banks failed during the banking crisis? Zero. Maybe we should find out what Canada does.
ReplyDeleteExcellent idea Peeper! What we need is effective regulation where the regulators aren't in bed with those being regulated. For 30 years the tail has been wagging the dog. Look where that got us!
ReplyDelete