Chalcedon Blog

Crisis-reaction-solution is the modus operandi of the tyrannical state. You create or take advantage of a crisis which in turn creates a reaction within the populace. You then come in and offer the solution thereby consolidating and increasing your power. The present economic crisis on Wall Street, which Ron Paul sought to solve by abolishing the Federal Reserve, may be solved by granting the Federal Reserve even greater authority. New York Times writer, Edmund Andrews, began his article on the recent proposal by the U.S. Treasury Department with an appropriate description:

The Treasury Department will propose on Monday that Congress give the Federal Reserve broad new authority to oversee financial market stability, in effect allowing it to send SWAT teams into any corner of the industry or any institution that might pose a risk to the overall system.

The goal for the state or corporate power is always consolidation. This is when industries and power bases are progressively consolidated into fewer hands. This has happened in media, film, civil government, and now on Wall Street.

According to a summary provided by the administration, the plan would consolidate an alphabet soup of banking and securities regulators into a powerful trio of overseers responsible for everything from banks and brokerage firms to hedge funds and private equity firms.

"Powerful overseers" is the description to highlight. They will rule by intimidation as the Federal Reserve, and its shareholders, gain greater control of all Wall Street firms:

The plan would give the Fed some authority over Wall Street firms, but only when an investment bank’s practices threatened the entire financial system.

And who exactly will determine what represents a "threat" to the financial system? It's a very one-sided proposal. Our present problem was not "Wall Street firms" but the more risky hedge funds and reckless venture capitalists. These powerhouses of leveraged finance will NOT have any regulations placed on them:

And the plan does not recommend tighter rules over the vast and largely unregulated markets for risk sharing and hedging, like credit default swaps, which are supposed to insure lenders against loss but became a speculative instrument themselves and gave many institutions a false sense of security.

The proposal is being made by Treasury Secretary Henry Paulson, Jr. who is the former head of Goldman Sachs which is a primary stockholder of the Federal Reserve. Hello? Is anybody out listening? Maybe he's just like Dick Cheney who "accidently" benefits his former company Hallirburton after coming to office. There appears to be a great deal of "accidents" like these within the circles of America's power centers.

That would be a significant expansion of the central bank’s regulatory mission.

Ladies and gentlemen, the Federal Reserve and its Wall Street counterparts ARE the problem. It's the fiat money system and fractional-reserve banking that has always diminished the strength of the U.S. economy and the wealth of the Middle Class. The Federal Reserve is NOT a government agency. As Michael Ruppert says, "It's about as Federal as Federal Express." You don't grant a private central bank that is destructive to an economy with MORE authority after a crisis transpires which IT created.

God help us.