Obama seeks expanded power to seize firms

[DarrinS]

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/23/AR2009032302830_pf.html





The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.

The government at present has the authority to seize only banks.

Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president's Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document.

The administration plans to send legislation to Capitol Hill this week. Sources cautioned that the details, including the Treasury's role, are still in flux.

Treasury Secretary Timothy F. Geithner is set to argue for the new powers at a hearing today on Capitol Hill about the furor over bonuses paid to executives at American International Group, which the government has propped up with about $180 billion in federal aid. Administration officials have said that the proposed authority would have allowed them to seize AIG last fall and wind down its operations at less cost to taxpayers.

The administration's proposal contains two pieces. First, it would empower a government agency to take on the new role of systemic risk regulator with broad oversight of any and all financial firms whose failure could disrupt the broader economy. The Federal Reserve is widely considered to be the leading candidate for this assignment. But some critics warn that this could conflict with the Fed's other responsibilities, particularly its control over monetary policy.

The government also would assume the authority to seize such firms if they totter toward failure.

Besides seizing a company outright, the document states, the Treasury Secretary could use a range of tools to prevent its collapse, such as guaranteeing losses, buying assets or taking a partial ownership stake. Such authority also would allow the government to break contracts, such as the agreements to pay $165 million in bonuses to employees of AIG's most troubled unit.

The Treasury secretary could act only after consulting with the president and getting a recommendation from two-thirds of the Federal Reserve Board, according to the plan.

Geithner plans to lay out the administration's broader strategy for overhauling financial regulation at another hearing on Thursday.

The authority to seize non-bank financial firms has emerged as a priority for the administration after the failure of investment house Lehman Brothers, which was not a traditional bank, and the troubled rescue of AIG.

"We're very late in doing this, but we've got to move quickly to try and do this because, again, it's a necessary thing for any government to have a broader range of tools for dealing with these kinds of things, so you can protect the economy from the kind of risks posed by institutions that get to the point where they're systemic," Geithner said last night at a forum held by the Wall Street Journal.

The powers would parallel the government's existing authority over banks, which are exercised by banking regulatory agencies in conjunction with the Federal Deposit Insurance Corp. Geithner has cited that structure as the model for the government's plans.

[clambake]

good

[Winehole23]

Rogues like AIG make it seem ok to root for the taxman. Sign of the times. IMO AIG needs the kick in the nuts.

[Winehole23]

If Treasury is given the proposed powers, in theory systemic risks like AIG might somehow be averted in the future.

[clambake]

WH23 is a commie bastard........and that avatar is still there.....My God Man!!!

[MannyIsGod]

You're right WH, this is almost certainly a result of AIG.

[DarrinS]

Rogues like AIG make it seem ok to root for the taxman. Sign of the times. IMO AIG needs the kick in the nuts.


Dems giveth and Dems taketh away.


How about just not giving them the bonuses to begin with?

[Winehole23]

WH23 is a commie bastard........and that avatar is still there.....My God Man!!!Still there. There are probably a dozen or so people on this board who know who it is. You can spill the beans if you want, clambake. Then I'll be forced to change it. It was getting a little played out anyway, and I never really assumed the character.

As to the charge of being pink:

Isn't the point that we're all commie bastards now? This being the USA, of course the form that socialism took was the nationalization of big finance. Socialism of by and for the megarich.

How could I say no with a straight face? I'm American. Therefore, I'm a pinko.

[Winehole23]

How about just not giving them the bonuses to begin with?Receivership solves that. Gov't withholds any inappropriate compensation. There is no recourse for the eligible company.

[clambake]

it was just a suppressed republican outburst......nothing personal.

[CosmicCowboy]

scary stuff

[coyotes_geek]

Rogues like AIG make it seem ok to root for the taxman. Sign of the times. IMO AIG needs the kick in the nuts.

True, they did need a kick in the nuts. But Congress only gave that kick to AIG because they finally found someone more hated than they were. Make AIG the villans, then the people aren't looking at congress anymore asking "WTF were you guys thinking". I'm not saying AIG is some innocent victim here, but what Congress is doing by using AIG to manipulate public opinion and expand their power is every bit as offensive to me as what AIG did.

[Wild Cobra]

Obama seeks expanded power to seize firms
Is it obvious yet that he's a Marxist?

[Winehole23]

I'm not saying AIG is some innocent victim here, but what Congress is doing by using AIG to manipulate public opinion and expand their power is every bit as offensive to me as what AIG did.Agree 100%. The nub of it it this for me: do you want to see the government try to manage the problem or not? Without control, stabilization measures may be doomed to failure; with it, the camel's nose is under the tent.

Nationalization of finance is scary. Problem is, not nationalizing is pretty scary too.

[LnGrrrR]

Is it obvious yet that he's a Marxist?

No.

[DarrinS]

Agree 100%. The nub of it it this for me: do you want to see the government try to manage the problem or not? Without control, stabilization measures may be doomed to failure; with it, the camel's nose is under the tent.

Nationalization of finance is scary. Problem is, not nationalizing is pretty scary too.



Well, the govt does have a long, proud history of success:

Fanny Mae, Freddy Mac, Amtrak, US Postal Service, Tennesee Valley Authority


Damn, I was looking for a good example. I'll get back to you.

[CosmicCowboy]

Geithner can't even staff Treasury. how the fuck is he going to manage AIG?

We already have a mechanism in place for an orderly reorganization/termination of failing companies. It's called bankruptcy and is handled by the judiciary.

This is a blatant and extremely dangerous power grab by the executive branch. We are setting up a legal mechanism where POTUS can literally pick winners and losers.

[coyotes_geek]

Agree 100%. The nub of it it this for me: do you want to see the government try to manage the problem or not? Without control, stabilization measures may be doomed to failure; with it, the camel's nose is under the tent.

Nationalization of finance is scary. Problem is, not nationalizing is pretty scary too.

Agree that both paths are scary, and both Bush and Obama agree(d) that the way out of this mess is to put the government in business with Wall Street. So be it. But we're not even giving that a chance to work because on the one hand Obama/Congress are telling Wall Street "we're partners, let's fix this together" and on the other Obama/Congress are telling the people "our partners are fucking crooks and you should hate them". It's idiotic. If Obama/Congress truly believe that the Wall Streeters are the only ones who can fix this mess then quit trying to stab them in the back at every opportunity just so that you can score some good publicity with the people. Have the balls to do the unpopular thing and say to the masses "I know you're pissed at these guys, but we're all in this together and we need their help". But unfortunately Obama is to big of a pussy to do something that might be unpopular so he plays this whole two-faced game where his administration is giving AIG bonuses one minute and publicly demonizing them the next.

[LnGrrrR]

Agree that both paths are scary, and both Bush and Obama agree(d) that the way out of this mess is to put the government in business with Wall Street. So be it. But we're not even giving that a chance to work because on the one hand Obama/Congress are telling Wall Street "we're partners, let's fix this together" and on the other Obama/Congress are telling the people "our partners are fucking crooks and you should hate them". It's idiotic. If Obama/Congress truly believe that the Wall Streeters are the only ones who can fix this mess then quit trying to stab them in the back at every opportunity just so that you can score some good publicity with the people. Have the balls to do the unpopular thing and say to the masses "I know you're pissed at these guys, but we're all in this together and we need their help". But unfortunately Obama is to big of a pussy to do something that might be unpopular so he plays this whole two-faced game where his administration is giving AIG bonuses one minute and publicly demonizing them the next.

Some politicians would like to get re-elected I'm sure. I don't think saying, "Oh well, these guys are the only ones who can fix our system so let's not villify them" will work because 1) these people broke the system and not many people trust them and 2) I don't think many constituents want their reps to be backing these guys up.

[DarrinS]

But we're not even giving that a chance to work because on the one hand Obama/Congress are telling Wall Street "we're partners, let's fix this together" and on the other Obama/Congress are telling the people "our partners are fucking crooks and you should hate them".
It's idiotic.






If Obama/Congress truly believe that the Wall Streeters are the only ones who can fix this mess then quit trying to stab them in the back at every opportunity just so that you can score some good publicity with the people.



DING DING DING DING

We have a winner. Someone gets it.

[RandomGuy]

Meh.

It is simply an acknowledgement of the ability of non-bank financial firms to impact the rest of the system.

It is a little bit like police only being concerned about blue cars for traffic offenses. If you have a shiny red car, you can do anything you want, up to and including T-boning a blue car that was obeying the sane rules of the road. Both use the same roads, and are essentially cars, but one has no rules to follow and the other does.

Does ANYONE think that such moves would have been contemplated without the present crisis?

Despite what many on the right seem to think, there is little support from moderates, or moderate lefties for such outright, permanent nationalization.

The purpose of this is rather limited, to my understanding, although I do understand your reservations, and think they should be addressed when putting together any such authority.

The alternative is to let the drivers of red cars, run over our 401k's with impunity.

[RandomGuy]

We already have a mechanism in place for an orderly reorganization/termination of failing companies. It's called bankruptcy and is handled by the judiciary.

I would hardly call a panicked rush to the exits that would happen with cascading bankruptcies and asset sell offs "orderly".

Does the current judiciary really have the capacity to deal with such a wave of complex bankruptcies?

From what I understand of AIG's operations, and I am an expert in that field, reorganizing or liquidating that company would (and probably will) take years to unwind all the related party transactions and sell of the components.

I can't imagine having to do that for 3 or 4 financial groups. Eek.

There should be some creative destruction, but I think it is better to bring the plane in for a guided crash landing than to simply abandon the cockpit and hope the plane lands in such a way as to not kill everybody.

[DarrinS]

Does ANYONE think that such moves would have been contemplated without the present crisis?



Never let a good crisis go to waste.

[Winehole23]

DING DING DING DING

We have a winner. Someone gets it.Brer Rabbit and the briar patch. Big business isn't the victim. They're co-predators with the USG. The US taxpayer is the victim.

[coyotes_geek]

Some politicians would like to get re-elected I'm sure. I don't think saying, "Oh well, these guys are the only ones who can fix our system so let's not villify them" will work because 1) these people broke the system and not many people trust them and 2) I don't think many constituents want their reps to be backing these guys up.

No doubt, the people are pissed and they don't want to hear it. But that still doesn't change the fact that what the people don't want to hear is exactly what the Obama administration thinks needs to be done. Sometimes leadership involves having to do the unpopular. But right now no one seems to have the stomach to do it.

[DarrinS]

Brer Rabbit and the briar patch. Big business isn't the victim. They're co-predators with the USG. The US taxpayer is the victim.


That was never the point. The Obama admin's hypocrisy was the point.

[Winehole23]

No doubt, the people are pissed and they don't want to hear it. But that still doesn't change the fact that what the people don't want to hear is exactly what the Obama administration thinks needs to be done. Sometimes leadership involves having to do the unpopular. But right now no one seems to have the stomach to do it.If they knew what it was their duty to do they would be doing it already. I don't think they know yet. I don't think anybody does.

[Winehole23]

That was never the point. The Obama admin's hypocrisy was the point.Some straight talk would be nice, but it's never been a real big seller. You griped like hell when Obama said the economy was shitty.

Then of course, Obama made it all better by having Christina Romer flog the WH's rosy forecast of GDP growth.

The beef that Obama is two-faced has legs, but on the whole people are more excited about/afraid of Obama actually keeping his promises.

[xrayzebra]

Yep, got to hand it to Obama, he gets his boys to put a little something in the
stimulus bill to pay bonuses to AIG folks, then he goes out and flogs them publicly,
then says he didn't know that was in there, then gets everyone fired up and the
Banking Queen gets fired up along with Miss America and gets a bill passed to tax
it back, then Obama sends his ACORN brown shirts out to do the tour of AIG execs,
and the Obama says, hold on there, hold on there, we have to look at this more
closely, lets not get carried away. Meanwhile, after posting security to keep
families safe the execs say keep the damn money, so now AIG gets to keep 100
percent of the money, so they can pass more money to foreign banks, and Obama
can go up to Congress and tell them we need more regulation. So give me the
power to seize more businesses.

I cant wait till ACORN gets congress to pass a bill throwing people like me out of
my house cause just two old folks live there and don't need all that room and
we got folks on welfare who have sixteen kids and just Uncle Sugar to live on
that need that house......and I can hear the cheers of boutons now.......

yea....yea....yeah......just the way it ought to be...

[clambake]

ray is still alive?

[ChumpDumper]

ACORN is going to get him!

[xrayzebra]

Damn, how did I get by without you. How's my boys doing. Still living in ignorance?
And supporting the cause.

[ChumpDumper]

ACORN's gonna get you!

[TDMVPDPOY]

ACORN using the civil rights movement as a defense, is like using the race card to get their way with things...

you make the wrong decisions, now live with it.

[xrayzebra]

Laugh while you can. Just think what your boy has done in such a short time. And
he had his organization behind him, trained and waiting. Now well funded with
stimulus money.......

[ChumpDumper]

Gonna get you with the stimulus!

[xrayzebra]

How did you spend your money Chump? Wisely I hope.

[ChumpDumper]

I gave it to ACORN so they can get you!

[TDMVPDPOY]

How did you spend your money Chump? Wisely I hope.

he bought a new plasma screen, like everyone else....:lmao

[Spurminator]

The US taxpayer is the victim.


That was never the point. The Obama admin's hypocrisy was the point.


Shouldn't it always be the point? Isn't it more important than partisan scorekeeping?

[coyotes_geek]

Shouldn't it always be the point? Isn't it more important than partisan scorekeeping?

Nope. Nothing is more important to Americans and our American politicians than partisan scorekeeping.

[Winehole23]

Shouldn't it always be the point? Isn't it more important than partisan scorekeeping?Each to his own taste. Darrin likes his rotten tomatoes. He's entitled to keep pitching them at Obama if he wants.

[redskinfan]

Dems giveth and Dems taketh away.


How about just not giving them the bonuses to begin with?

I wonder how many of those who took the bonuses were conservatives???? I would be safe to say that probably 90 percent of them.:hat

[Yonivore]

I wonder how many of those who took the bonuses were conservatives???? I would be safe to say that probably 90 percent of them.:hat
AIG Executives -- presumably those that were receiving the bonuses -- gave overwhelmingly to Democratic candidates. Chris Dodd and Barack Obama being the chief recipients of their largesse.

What makes you assume they were conservatives or Republicans?

I think Bill Gates and Warren Buffett both voted for Obama...and they're #1 and #2 on the rich list.

[redskinfan]

AIG Executives -- presumably those that were receiving the bonuses -- gave overwhelmingly to Democratic candidates. Chris Dodd and Barack Obama being the chief recipients of their largesse.

What makes you assume they were conservatives or Republicans?

I think Bill Gates and Warren Buffett both voted for Obama...and they're #1 and #2 on the rich list.

Conservatives are power hungry greedy SOB's just like these execs who took the bonuses. Did Gates and Buffett vote for Obama or you think they did? And did they receive bailout money and give out bonuses with them?

[ChumpDumper]

AIG Executives -- presumably those that were receiving the bonusesHow do you presume this?

[sook]

AIG Executives -- presumably those that were receiving the bonuses -- gave overwhelmingly to Democratic candidates. Chris Dodd and Barack Obama being the chief recipients of their largesse.

What makes you assume they were conservatives or Republicans?

I think Bill Gates and Warren Buffett both voted for Obama...and they're #1 and #2 on the rich list.

http://www.geekalerts.com/u/sheep-stool.jpg

[Yonivore]

http://www.geekalerts.com/u/sheep-stool.jpg
That's your response?

[ChumpDumper]

I think Bill Gates and Warren Buffett both voted for Obama...and they're #1 and #2 on the rich list.Yoni tries to start his own class war.

[sook]

That's your response?

Not the sharpest tool in shed eh? Lets keep going.

http://eternallycool.net/wp-content/uploads/2008/04/torino-sheep-4.jpg

[Yonivore]

Not the sharpest tool in shed eh? Lets keep going.

http://eternallycool.net/wp-content/uploads/2008/04/torino-sheep-4.jpg
Okay, if you need to speak in pictures, I understand.

http://www.city-data.com/forum/attachments/elections/14922d1203442021-obama-illegals-share-same-message-n522306244_197290_3718.jpg
You look smart, sook! Nice picture.

[sook]

Okay, if you need to speak in pictures, I understand.

http://www.city-data.com/forum/attachments/elections/14922d1203442021-obama-illegals-share-same-message-n522306244_197290_3718.jpg
You look smart, sook! Nice picture.

thanks and nice picture btw. But the difference is cut and clear, i love america and you hate it.