Put down the emasculators, Chris Dodd. Your plan to geld Ben Bernanke just hit a serious roadblock.
President Barack Obama sent out some of his lesser minions to make clear he wants his Federal Reserve to remain virile and whole, whether or not it’s an “abysmal failure” as a bank regulator. While Dodd says his bill would “enhance” the Fed, it very clearly does not want to swallow a pill that would strip it of its power over banks and consumer finances.
The White House doesn’t want it to, either. The amazingly-named Austan Goolsbee warned that cutting off the Fed’s cutting off the Fed “can, if you do it wrong, get into a left hand doesn’t know what the right hand is doing kind of problem in a crisis.” In other words, don’t leave the right hand without anything to do.
dismemberment
Well, here’s a fun twist to Sen. Chris Dodd’s proposal to castrate the Federal Reserve: Big Ben Bernanke is set to travel to the Hill at some point after Thanksgiving for a few rounds with the gentleman from Connecticut, who heads the committee considering Bernanke’s renomination as chairman of the soon-to-be-inconsequential Fed.
Now, Dodd is saying all the right things, telling Bernanke he’s “doing a terrific job” and that his bid to give most of the Fed’s power to others is “not about individuals and personalities.” But then he turns around and says Ben’s Boys have been an “abysmal failure” when it comes to regulating banks.
One of Bernanke’s minions has already spoken out against doing anything to trim the Fed’s authority, with the Kansas City branch warning that messing with the F.R. “could lead to delays or second-guessing of supervisory recommendations and greater political interference.” And it was talking about Rep. Barney Frank’s proposals for financial regulation reform, which don’t go nearly as far as Dodd’s in cutting the Fed down to size.
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