Wednesday, April 8, 2009
THE DECLARATION OF INDEPENDENCE HAS BEEN REPEALED
By Dick Morris
On April 2, 2009, the work of July 4, 1776 was nullified at the meeting of the G-20 in London. The joint communiqué essentially announces a global economic union with uniform regulations and bylaws for all nations, including the United States. Henceforth, our SEC, Commodities Trading Commission, Federal Reserve Board and other regulators will have to march to the beat of drums pounded by the Financial Stability Board (FSB), a body of central bankers from each of the G-20 states and the European Union.
The mandate conferred on the FSB is remarkable for its scope and open-endedness. It is to set a “framework of internationally agreed high standards that a global financial system requires.” These standards are to include the extension of “regulation and oversight to all systemically important financial institutions, instruments, and markets…[including] systemically important hedge funds.”
Note the key word: “all.” If the FSB, in its international wisdom, considers an institution or company “systemically important”, it may regulate and over see it. This provision extends and internationalizes the proposals of the Obama Administration to regulate all firms, in whatever sector of the economy that it deems to be “too big to fail.”
The FSB is also charged with “implementing…tough new principles on pay and compensation and to support sustainable compensation schemes and the corporate social responsibility of all firms.”
That means that the FSB will regulate how much executives are to be paid and will enforce its idea of corporate social responsibility at “all firms.”
The head of the Financial Stability Forum, the precursor to the new FSB, is Mario Draghi, Italy’s central bank president. In a speech on February 21, 2009, he gave us clues to his thinking. He noted that “the progress we have made in revising the global regulatory framework…would have been unthinkable just months ago.”
He said that “every financial institution capable of creating systemic risk will be subject to supervision.” He adds that “it is envisaged that, at international level, the governance of financial institutions, executive compensation, and the special duties of intermediaries to protect retail investors will be subject to explicit supervision.”
In remarks right before the London conference, Draghi said that while “I don’t see the FSF [now the FSB] as a global regulator at the present time…it should be a standard setter that coordinates national agencies.”
This “coordination of national agencies” and the “setting” of “standards” is an explicit statement of the mandate the FSB will have over our national regulatory agencies.
Obama, perhaps feeling guilty for the US role in triggering the international crisis, has, indeed, given away the store. Now we may no longer look to presidential appointees, confirmed by the Senate, to make policy for our economy. These decisions will be made internationally.
And Europe will dominate them. The FSF and, presumably, the FSB, is now composed of the central bankers of Australia, Canada, France, Germany, Hong Kong, Italy, Japan, Netherlands, Singapore, Switzerland, the United Kingdom, and the United States plus representatives of the World Bank, the European Union, the IMF, and the Organization for Economic Co-operation and Development (OECD).
Europe, in other words, has six of the twelve national members. The G-20 will enlarge the FSB to include all its member nations, but the pro-European bias will be clear. The United States, with a GDP three times that of the next largest G-20 member (Japan), will have one vote. So will Italy.
The Europeans have been trying to get their hands on our financial system for decades. It is essential to them that they rein in American free enterprise so that their socialist heaven will not be polluted by vices such as the profit motive. Now, with President Obama’s approval, they have done it.
This economic crisis is too useful for Obama to want it to end. When Rahm Emanuel — and later Hillary Clinton — spoke of never letting a good crisis “go to waste,” many people were shocked. But now Obama seems to embody the corollary: that the crisis should continue until he has thoroughly milked it to reshape American politics, society and the economy. Like Faust, he seems to wish that this “given moment” will “endure forever.” Unlike Faust, however, he will not lose his “life and soul” to such a wish. He’ll sacrifice ours instead.
First came the “stimulus package.” With only about $185 billion of its $800 billion in spending to be spent in 2009, Obama clearly never intended the spending to be about stimulus but wanted the need for a stimulus to trigger the spending he wanted anyway.
Then came the Troubled Asset Relief Program (TARP) funding, often forced down banks’ throats. Now comes word that even as banks want to return the money, the Treasury is making them keep it. One source at a TARP bank reports that Treasury Secretary Timothy Geithner is insisting that banks go through their “stress test” before refunding the TARP money. As Stuart Varney speculates, in The Wall Street Journal, Obama wants the banks to keep the money so he can enforce his regulations on them.
Now comes Geithner’s plea for extra regulatory powers and Obama’s concession to global economic regulation at the G-20 summit. Both moves are game-changers for any major American business. Geithner wants the power to take over any business — presumably in any field — whose failure would imperil the national economy. Today it’s banks, brokerage houses, car companies and insurance firms. Tomorrow? Who knows?
And Obama agreed to agree on international “high standards” for the regulation of all “systemically important” companies to be promulgated by the new global Financial Stability Board (FSB). The United States, occupying one of 20 chairs on the FSB board (21 if we count the EU), will come to a consensus with other central bankers from the G-20 nations on what these regulations should say. Then the Securities and Exchange Commission, the Federal Reserve and the other regulatory arms of the U.S. government will impose them on our economy.
(Some have objected that Congress needs to be consulted, but as long as the agreements are “voluntary” and the U.S. agencies are merely “asked” to impose the regulations, no further grant of congressional authority is needed. But, of course, there will be nothing voluntary about the administration’s demand that the agencies implement the coming FSB directives, no matter how intrusive they may be.)
And, finally, there is Obama’s delegation of a total overhaul of the tax code to a commission headed by Paul Volcker with a mandate to report back in December of this year.
So with the tax code totally changing, Europe about to formulate regulations for our economy, the U.S. government empowered to take over any large company, the deficit and spending reaching unbelievable levels and the feds insisting on continued control of banks, what businessman in his right mind is going to invest in anything? How could even the most foolish optimist pull the trigger on a business investment without knowing the tax consequences, the regulatory framework and the policy of the banks on lending?
But Obama knows all this. He knows that his steps will delay economic recovery. But he wants these changes, not as means to an end, but as the end itself. And he is determined to get them passed and set in stone while the rubric of “crisis” justifies his doing so.
He is not unlike a leader who takes his country into war, knowing that by “wagging the dog” he can reinforce his power.
But ultimately, does Obama care if he is reelected? Doesn’t he know that he needs a good economy to extend his mandate to eight years? Yes, of course he does. But he probably figures that he can turn the economy around as Election Day 2012 draws nearer and reap all the credit then. In the meantime, no good crisis should ever go to waste.
It is obvious obama is using the created crisis to ram his socialist communist agenda through congress and world summits by, as Morris says, making the crisis work in his favor. With only about $185 billion of its $800 billion in spending to be spent in 2009, Obama clearly never intended the spending to be about stimulus but wanted the need for a stimulus to trigger the spending he wanted anyway. Obama is a piece of SHIT!