Rise of the Economic Anti-Heroes: Super Fed and The Incredible Debt

The Constitutional Alamo ^ | 06/19/09 | Michael Naragon

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Barack Obama, the Kingpin, is apparently set on a multi-pronged strategy to derail the U.S. economy, and Geithner, like any good comic-book henchman, is attempting to do his boss’ dirty work.

First order of business: expand the power of the Dark Side… ahem, the Federal Reserve. In March, Geithner made it clear that he wished the Fed to be strengthened, but that it would not become the government’s primary regulatory agency.

Now, in June, Geithner has revised his statement. On Thursday, the Treasury Secretary told the Senate Banking Committee that the Fed would become the government’s key regulatory police officer under the Obama plan for economic reform. Both Republicans and Democrats have expressed concern that the Fed, which is currently responsible for the nation’s monetary policy, would be asked to make politically charged decisions.

Also of concern is the possibility that the next Fed chief could come from Obama’s current staff–Lawrence Summers, for example. This would be the same Lawrence Summers who recently said, “Our objective is not to supplant or replace markets. Rather, the objective is to save them from their own excesses and improve our market-based system going forward.” Placing Summers in command of the Fed would give the Obama administration command of monetary policy and would be akin to naming Lex Luthor as Metropolis Police Chief. Conflict of interest? Oh, yes.

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The Obama administration continues its drive to obliterate capitalism, as Timothy Geithner pushes plans to strengthen the Fed, sell off more federal debt, and remove risk-taking from Wall Street. Holy deficit, Batman!

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“The Obama administration’s regulatory reform proposal includes many positive features,” concluded Dean Baker of the Center for Economic and Policy Research, “but it ultimately will not make the financial system safer for the simple reason that it conceals responsibility rather than holding regulators accountable for their failures. The basic story of this crisis was not that the regulatory authorities lacked the ability to rein in this disaster before it was too late. Rather, the basic story is that the regulatory authorities — most importantly the Fed — opted not to use their power to rein in the housing bubble.”