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.
Plus, the left hand sucks at its job, too, says Treasury hack Neal Wolin.
"No regulator had a perfect record leading up to the crisis," said Mr. Wolin at the American Bar Association. "But in our view, the Federal Reserve is the agency best equipped for the task of supervising the largest, most complex firms."
They may be inept, but they're the least inept. So calm down, Dodd. Your S&M fantasies will not be fulfilled under this administration.
White House hits out at plan to strip Fed powers [FT]