Obama administration looking for broader power to seize firms

dajoka004

dajoka004

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I'm a very hands off government type of guy. But those of you who love it when the government gets involved in everything will like this.

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/24/AR2009032400847_2.html?hpid=topnews

[size=+2]Geithner to Ask Congress for Broad Power to Seize Firms[/size]
Goal Is to Limit Risk to Broader Economy

[size=-1]By Binyamin Appelbaum, David Cho and Debbi Wilgoren
Washington Post Staff Writers
Tuesday, March 24, 2009; 9:39 AM
[/size]

The Obama administration will ask Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, White House spokesman Robert Gibbs said this morning.

Treasury Secretary Timothy F. Geithner is set to argue for the new powers at a hearing today on Capitol Hill that was scheduled to address the furor over bonuses paid to executives at American International Group, which the government has propped up with about $180 billion in federal aid. Administration officials say the proposed authority would have allowed them to seize AIG last fall and wind down its operations at less cost to taxpayers.

The government at present has the authority to seize only banks.

Giving the Treasury secretary the power to seize a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president's Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to an internal administration document.

The administration plans to send legislation to Capitol Hill this week. Sources cautioned yesterday that the details, including the Treasury's role, are still in flux.

"We need resolution authority to go in and be able to change contracts, be able to change the business model, unwind what doesn't work," Gibbs said on CNN in one of several morning television interviews aimed at promoting the administration proposal. " . . . This is the exact type of authority that will allow us to deal with the problems in AIG . . . that will address the systemic risk without having to put [a failing firm] in bankruptcy."

Geithner will testify alongside Federal Reserve Chairman Ben Bernanke. The hearing before the House Financial Services Committee follows last week's revelation that AIG paid more than $165 million in retention bonuses to employees at its Financial Products division, the same unit whose complex derivatives largely precipitated the company's downfall. AIG chairman Edward M. Liddy testified before the same House committee last week, but Chairman Barney Frank (D-Mass) vowed to hold a second hearing "to more thoroughly examine the oversight of the federal government's intervention" at AIG.

Last week, the House overwhelmingly passed legislation that would tax 90 percent of the retention payments. Yesterday, New York Attorney General Andrew Cuomo announced that the majority of executives at AIG Financial Products had indicated their willingness to return the retention payments they had received, and Senate leaders said they will put off consideration of their version of the tax bill.

The administration's proposal contains two pieces. First, it would empower a government agency to take on the new role of systemic risk regulator with broad oversight of any and all financial firms whose failure could disrupt the broader economy. The Federal Reserve is widely considered to be the leading candidate for this assignment. But some critics warn that this could conflict with the Fed's other responsibilities, particularly its control over monetary policy.

The government also would assume the authority to seize such firms if they totter toward failure.

Besides seizing a company outright, the document states, the Treasury Secretary could use a range of tools to prevent its collapse, such as guaranteeing losses, buying assets or taking a partial ownership stake. Such authority also would allow the government to break contracts, such as the agreements to pay $165 million in bonuses to employees of AIG's most troubled unit.

The Treasury secretary could act only after consulting with the president and getting a recommendation from two-thirds of the Federal Reserve Board, according to the plan.

"This is common sense. This isn't anything crazy," Gibbs told CNN. " . . . If the Treasury had resolution authority on AIG, you wouldn't have to put it in bankruptcy to change executive compensation, you could do that automatically."

Geithner plans to lay out the administration's broader strategy for overhauling financial regulation at another hearing on Thursday.

The authority to seize non-bank financial firms has emerged as a priority for the administration after the failure of investment house Lehman Brothers, which was not a traditional bank, and the troubled rescue of AIG.

"We're very late in doing this, but we've got to move quickly to try and do this because, again, it's a necessary thing for any government to have a broader range of tools for dealing with these kinds of things, so you can protect the economy from the kind of risks posed by institutions that get to the point where they're systemic," Geithner said last night at a forum held by the Wall Street Journal.

The powers would parallel the government's existing authority over banks, which are exercised by banking regulatory agencies in conjunction with the Federal Deposit Insurance Corp. Geithner has cited that structure as the model for the government's plans.
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"the government solution to a problem is usually as bad as the problem". Milton Friedman
 
Originally Posted by DAYTONA 5000

So when should we be prepared to kiss private enterprise goodbye?
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Very soon, it seems. I can't even get mad at the conservatives/Republicans/both for gloating right now, but too much of this is not makingsense to Obama's own supporters.
tired.gif
 
What is happening? Why does anyone think it is a good idea for government to come in and take over anything? They cant do anything right! This is exactly howstuff went down in Germany in the 1930's.
 
Im pretty reserved on this. It's like we dont want the government to control everything in our lives but on the same note, we dont want some greedy !+%!+to take control all the money in America.
 
Alot of yall don't seem to know the difference between government intervention and governmentcontrolled.

Our private sector still accounts for 70% of America's worforce, that's no where socialism where the government not only controls the means ofproduction but also the distribution.

If its one thing we've learned from this crisis is that laissez faire capitalism doesn't work, oversight & regulation is needed.
 
Originally Posted by NostrandAve68

Alot of yall don't seem to know the difference between government intervention and government controlled.

Our private sector still accounts for 70% of America's worforce, that's no where socialism where the government not only controls the means of production but also the distribution.

If its one thing we've learned from this crisis is that laissez faire capitalism doesn't work, oversight & regulation is needed.
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It's not so much it didn't work, as much as too many people were trying to abuse it. Basic economic principles teach us that everyone can't profitat the same time. If people would have recognized this, cut their losses, and moved onto another place in the cycle way back when, then there is a huge chancewe wouldn't be in this current predicament.

And remember, just because oversight & regulation is wanted by those who can put it into motion, doens't mean it is needed.
 
The only thing the government should control is healthcare and banks, everythign else is to much. But at the end of the day they don't trounce upon mycivil liberties.
 
Originally Posted by Grand 0ld Party

the hell is happening to america?
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tired.gif




Calling Obama a Socialist is wrong. Calling him a Fascist is the way to go, instituting his Corporatism ideas on this country.

The only thing the government should control is healthcare and banks, everythign else is to much. But at the end of the day they don't trounce upon my civil liberties.


Are you nuts? Your first statement violates the United States Constitution.
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Originally Posted by bboy1827

The only thing the government should control is healthcare and banks, everythign else is to much. But at the end of the day they don't trounce upon my civil liberties.
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man you need some major head work bro. the hell i want to be asking for permision to go see a doctor. i love my healthcare the way i have it.
 
Word


its getting bad yall, to much funny business going on.. this !+!+$%* obama is just as if not more corrupt than the presidents that preceded him..


I seen this man with a yamika (sp?) on in submission to that candle holder that is used during the jewish holiday on the television like for what? I understandbeing tolerant (that might not be great word choice in this context) of someones religion but to completely submit yourself to something you don't evenbelieve in??? from that moment i knew this dude was just another face on the master plan look at all the overzealous support of Israel by his whole cabinet...what a !+!+$%* joke..


Im just illin with nothinbefore waiting for he Lyrans to get here..
 
"Hell hath no fury like a bureaucrat scorned" - Milton Friedman

LOVE IT dmxfury
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I seriously want to fight Tim Geithner. By the way everyone, we are witnessing the de-Americanization of America. What once made this country great is beingbastardized by Obama and his goons.
 
Originally Posted by LESfamilia

Originally Posted by DAYTONA 5000

So when should we be prepared to kiss private enterprise goodbye?
Click to expand...
Very soon, it seems. I can't even get mad at the conservatives/Republicans/both for gloating right now, but too much of this is not making sense to Obama's own supporters.
tired.gif
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Nothing has been making sense since Jan 21.
eyes.gif
 
I am pretty reserved on this as well but SOMETHING needs to be done with these irresponsible, greedy CEO's and corporations.
 
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