News & Analysis
Wisdom of Regulators? ... Systemic Risk Group Formed to Supervise Wall Street
Group Forms to Urge Strict Oversight of Wall Street ... Efforts to increase and improve regulation of Wall Street have bogged down, according to Sheila C. Bair, the former chairwoman of the Federal Deposit Insurance Corporation. On Wednesday, she will announce a new group, the Systemic Risk Council, that will monitor and encourage regulatory reform ... The organization is being formed by the Pew Charitable Trusts, where Ms. Bair now works, and the CFA Institute, an organization of financial analysts. – New York Times
Dominant Social Theme: Since Wall Street can't run itself we'll provide the leadership.
Free-Market Analysis: So a new group will do what Wall Street won't – bring sanity to finance! Or will it ...
Imagine, however, that a group was formed to provide oversight to the risks undertaken by, say, the auto industry – or ... cruise lines. Wouldn't this be seen as overreach?
How can individuals outside of an industry calculate the risks in a given industry better than the participants? It's the height of arrogance, it seems to us, though granted that Wall Street is an unusual place, fueled by the high-powered money of central banking.
Without central banking and the fiat-monopoly dollar, there would be no Wall Street as we know it today. Wall Street would be what it is supposed to be, a venue for raising capital and trading assets, securitized or not.
It would be a small, low-key place. In fact, get rid of government bonds and it would be smaller still. There would likely be a great deal fewer masters of the universe. Without central banking, banks themselves would deflate.
The fuel of fiat money, combined with the endless, artificial inflation of government borrowing has made the securities industry throughout the West what it is today. And because it serves the purposes of a power elite there is likely no changing the fundamentals any time soon – absent an economic conflagration.
While this may indeed take place, the larger issue of those dedicated to the status quo is how to pretend to ameliorate the weaknesses of the system without destroying its essential usefulness to the elites that have constructed it.
Enter the Pew Charitable Trusts that are sponsoring Ms. Sheila Bair's Systemic Risk Council (see article excerpt above). Mentioned in almost an aside, the Pew Trusts are apparently funding Ms. Bair's endeavor – an effort that would likely not exist without its largesse.
Founded by oil interests, Pew officials like to masquerade as "unbiased" but the organization is well known for its "leveling" bias. There is nothing in the world according to Pew and other such think tanks that cannot be improved by the judicious application of regulation.
Here's an excerpt from a good critique of Pew written last year and appearing in Capital Research Center's Foundation Watch, entitled "Pew and the Gang Ride Again: Citizens' Free Speech Still in Danger."
Pew is indefatigable in its efforts to shape – even circumscribe – Americans' political speech. The grantmaker was established by a family of outspoken and old-fashioned Philadelphia Republicans who made their money in the oil business early in the last century. But today Pew leads the way in developing and funding proposals to re- educate citizens and voters to understand the benefits of democracy guided by elites.
Pew is most famous for its role in the manipulative crusade that a few big funders carried out to pass the McCain-Feingold "campaign finance reform" law. That Act still limits citizens' and private groups' speech before elections, even though the Supreme Court ruled part of the law unconstitutional. But McCain-Feingold is only one of the ways Pew and its gang of like-minded left- of-center funders struggle to massage – some would say, strangle – the speech of ordinary Americans.
The grantmaker has undertaken initiatives in "civic journalism" and "media reform" and also given impetus to "net neutrality" legislation. Its work aims to help the public understand that freedom does not consist in letting people think and say and buy what they want. Freedom is instead the product of dialogue and conversation—led by those who are properly informed about the dangers of commercial speech and corporate organization.
It makes perfect sense that Pew is a leftist front for further government involvement in the basics of every kind of human interaction.
The power elite that seeks to run the world is wedded to regulatory interference – a mandate that expands and empowers the mercantilism that is utilized as control mechanism. Foundations such as Pew advance this agenda without making it obvious.
It is mercantilism – the use of government to advance private interests – that allows the top elites to work their will on the world and further the global governance that they have in mind.
Regulations don't work. Regulations are price fixes – and while there may be a real-world justification for them, there is no argument that can be made for them on a purely rational plane.
It is a loony model. In fact, it is not even possible to accurately forecast industry trends and demands. The idea that Ms. Bair and a coterie of "wise ones" can substitute their judgment for Wall Street is ludicrous.
The new group, which expects to begin issuing reports quickly, will include a long list of former regulators and officials from both parties, including former Senators Bill Bradley, Democrat of New Jersey; Chuck Hagel, Republican of Nebraska; and Alan K. Simpson, Republican of Wyoming.
It will also include Brooksley E. Born, a former chairwoman of the Commodity Futures Trading Commission, whose efforts to fight deregulation in the Clinton administration failed, and Paul H. O'Neill, the first Treasury secretary under George W. Bush.
Wall Street in its current incarnation misaligns resources and inflicts ruin. It is the handmaiden of central banking, part of a larger destabilizing structure that is intended to continually introduce chaos into the system – from which the order of the elites' longed-for world government shall be created.
Ms. Bain is a servant of this larger entity and cause. Nothing she and her group shall recommend will do anything to ameliorate either the risks or the "bad" practices of the industry she is trying to cure.
Conclusion: In fact, the "cure" shall likely prove as bad or worse than the disease.