Update:
http://www.youtube.com/watch?v=aW2V50AS7K0
Same clip but checkout what they do near the end. CNBC wasn’t happy about listening to the opening statements… or at least Ron Paul’s.
Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits in the calendar year 2007, an Associated Press analysis reveals.
The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages.
Rep. Barney Frank, chairman of the House Financial Services committee and a long-standing critic of executive largesse, said the bonuses tallied by the AP review amount to a bribe ”to get them to do the jobs for which they are well paid in the first place.
”Most of us sign on to do jobs and we do them best we can,” said Frank, a Massachusetts Democrat. ”We’re told that some of the most highly paid people in executive positions are different. They need extra money to be motivated!”
Sherman, a member of the House Financial Services Committee, said pay excesses undermine development of good bank economic policies and promote an escalating pay spiral among competing financial institutions — something particularly hard to take when banks then ask for rescue money.
He wants them to come before Congress, like the automakers did, and spell out their spending plans for bailout funds.
”The tougher we are on the executives that come to Washington, the fewer will come for a bailout,” he said.
Wrong Frank. They don’t need extra money to be motivated. They demand large salaries because 1) they can as the government has created the environment for these gigantic companies which are “too big to fail” and 2) because they do a job few people would want. Why not take some time off of your cushy job with unpaid interns sorting your mail and walk a mile in the private sector?
And Sherman… here’s one for you. “Just say no.” If the government wasn’t offering fist fulls of money to every cronies they wouldn’t come around. They’d go bankrupt like their supposed to. But you won’t let them fail… so what else do you expect from them? You’ve fed lamb the the dog in the past now dangle more it in front of his face… what the hell do you expect but for him to whine for it?
http://www.investmentnews.com/…
The financial services industry yesterday called on Congress to enact sweeping regulatory reforms, including creating a “stability regulator” to oversee systemic risk in all financial services firms.
Among those calling for a “financial markets stability regulator” was Timothy Ryan, president and chief executive of the Securities Industry and Financial Markets Association of New York and Washington.
The U.S. financial markets regulatory structure dates back to the Great Depression, he noted.
In contrast to that time, “financial institutions no longer operate in single product, or business silo, or in purely domestic or local markets,” Mr. Ryan told the House Financial Services Committee, which held a hearing on revamping the financial regulatory structure. “Instead, they compete across many lines of business and in many markets that are largely global,” he said.
However, the U.S. financial regulatory structure “remains ‘siloed’ at both the state and federal levels. No single regulator currently has access to sufficient information or the practical and legal tools and authority necessary to protect the financial system as a whole against systemic risk,” Mr. Ryan said.
Spoken like a true believer in centralized economic planning. Good luck with that. Perhaps you should check with the USSR and Mises to see how well that works out.
http://www.washingtonpost.com/…
The biggest political story of 2008 is getting little coverage. It involves the collapse of assumptions that have dominated our economic debate for three decades.
Since the Reagan years, free-market cliches have passed for sophisticated economic analysis. But in the current crisis, these ideas are falling, one by one, as even conservatives recognize that capitalism is ailing.
You know the talking points: Regulation is the problem and deregulation is the solution. The distribution of income and wealth doesn’t matter. Providing incentives for the investors of capital to “grow the pie” is the only policy that counts. Free trade produces well-distributed economic growth, and any dissent from this orthodoxy is “protectionism.”
The old script is in rewrite. “We are in a worldwide crisis now because of excessive deregulation,” Rep. Barney Frank (D-Mass.), the chairman of the House Financial Services Committee, said in an interview.
He noted that in 1999 when Congress replaced the New Deal-era Glass-Steagall Act with a set of looser banking rules, “we let investment banks get into a much wider range of activities without regulation.” This helped create the subprime mortgage mess and the cascading calamity in banking.
While Frank is a liberal, the same cannot be said of Ben Bernanke, the chairman of the Federal Reserve. Yet in a speech on Tuesday, Bernanke sounded like a born-again New Dealer in calling for “a more robust framework for the prudential supervision of investment banks and other large securities dealers.”
Bernanke said the Fed needed more authority to get inside “the structure and workings of financial markets” because “recent experience has clearly illustrated the importance, for the purpose of promoting financial stability, of having detailed information about money markets and the activities of borrowers and lenders in those markets.” Sure sounds like Big Government to me.
This is the third time in 100 years that support for taken-for-granted economic ideas has crumbled. The Great Depression discredited the radical laissez-faire doctrines of the Coolidge era. Stagflation in the 1970s and early ’80s undermined New Deal ideas and called forth a rebirth of radical free-market notions. What’s becoming the Panic of 2008 will mean an end to the latest Capital Rules era.
In the campaign so far, John McCain has been clinging to the old economic orthodoxy while Barack Obama has proposed a modestly more active role for government. But the economic assumptions are changing faster than the rhetoric of the campaign. “Reality has broken in,” says Frank. And none too soon.
Is this a joke?
A Massachusetts liberal writing an article about the failures of capitalism using another Harvard grad, NJ born, Massachusetts representing liberal as a source?
Using the fact that the head of the Federal Reserve, which is about as anti-free market as you can get, wants to increase the organization’s power as evidence that free market conservatives are giving up on the free market? Who said Bernanke is conservative? Who said a central bank was free market?
Using the Great Depression as more evidence of free market failures?
Claiming John McCain is a free market conservative?
I’m just astounded by the amount of steaming feces coming off of this article.
Here is the video of Paul asking questions of Paulson and Bernanke from last Thursday. Prior only the audio was available.
It’s great to hear that the hearing over inflation and energy is happening. Lets hope it turns up something good that makes its way into the MSM.
Posted on his own website a few days ago,
Rep. Scott Garrett (R-NJ) called for answers in response to the reported value of the Bear Stearns portfolio released by the New York Federal Reserve today at 4:30pm. Garrett, a member of the Financial Services Committee, will be among those questioning Treasury Secretary Henry Paulson and Federal Reserve Board Chairman Ben Bernanke on Thursday, July 10 at 10:00am.
“The Fed’s action in bailing out Bear Stearns sets a precarious standard,” Garrett said. “This unprecedented expansion of authority without congressional approval exposes taxpayers to tremendous financial risk. Like most Americans, I want market discipline – but the Federal Reserve cannot create that by fabricating new regulatory authority.”
Garrett also criticized House Financial Services Committee Chairman Barney Frank (D-MA) for the delay in holding hearings into the incident. With the support of 23 other members, Garrett sent a letter to Frank requesting a congressional hearing, a request that was largely ignored for three months. It was only recently that Frank scheduled committee hearings to explore the potential systemic risk associated with the Fed’s actions. In the statement released by the House Financial Services Committee on Wednesday, Frank announced that the committee would explore the adequacy of current oversight and regulatory tools.
“Our nation’s hardworking taxpayers have been put on the hook for Bear Stearns’ collapse. They deserve a thorough explanation of the Fed’s rationale for the bail-out, as well as a solid plan for how the Fed will deal with future instances of this nature,” Garrett said. “While it is important that the government work closely with industry to ensure the stability and liquidity of our nation’s financial markets, we must be cautious about encouraging further risky business decisions by using government tools to prevent the free market from acting appropriately.”
An audio link of Garrett’s questions and Federal Reserve Chairman Ben Bernanke’s answers here.
Transcribed / paraphrased text on the other side of the jump…
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