House Bill Gives Federal Reserve “Comprehensive And Unfettered” Power Over The Financial Industry

Because nothing says “freedom” and “liberty” like “comprehensive and unfettered” government power.

The Federal Reserve stands to gain substantial new authority under financial reform legislation, despite increasing skepticism from lawmakers in both parties over the central bank’s unchecked powers over the U.S. economy.
Under the final piece of the House reform package being assembled by Financial Services Committee Chairman Barney Frank, the Fed would join seven other regulators to form an oversight council to police financial firms that threaten the stability of the banking system.
But the Fed is the only member that would be empowered to carry out the restrictions the council imposed on risky big companies — giving it more power than the other regulators, some policy experts say.
The Fed would also have the authority to perform on-site examinations of the targeted financial firms — able to barge into any of the “risky” firms and demand answers and documents, the most powerful tool at any regulator’s disposal.
In fact, any firm tapped for this scrutiny becomes subject to “comprehensive and virtually unfettered Fed oversight,” said John Dearie, a former Fed bank supervisor and executive vice president for policy at the Financial Services Forum.

So, basically, the government can just decide that a given financial company needs their help and barge in through the front door and start demanding the company divulge its information (including any financial data on accounts held by we citizens). Not to mention force that company to take certain action. Like, I don’t know, sell a controlling interest to the federal government.
You know. For its own good.
What’s sad here is that the government is trying to give itself more power to protect against a problem it created by having too much power in the first place. In the recent financial sector collapse, which is the motivation behind this bill, banks didn’t create a subprime loan market by making bad loans to people with marginal ability to pay them back on their own. They did it because the government told them to do it. And told them that Fannie Mae and Freddie Mac would buy up the bad loans. And that if the loans went bad, why, Fannie and Freddie have the full backing of the US taxpayer.
Which is why, at the time of the collapse, Fannie and Freddie combined had a 51% market share in the $12 trillion mortgage market. But with all the subprime loans the government was encouraging into existence out of some false notion that putting people who hadn’t earned a home into a home would somehow make them better people, that market eventually reached a tipping point. The house of cards collapsed, and the rest is history.
The government is essentially using the excuse of a problem it created as justification for giving itself more power.
It’s a textbook power grab. This isn’t about protecting the economy. This is about more power for the government.