I had time today and because I find this whole sky is falling phenomenon terribly entertaining, I find myself watching a congressional committee and Bernanke have a chat.
I apologize for my ignorance, but I do not know who is on the committee. The committee is the House Financial Services Committee. I went to their website, member list has no pitchers. Mazel Tov.
I found it. Brad Sherman. Brad ‘Wesley Mouch’ Sherman.
Brad Sherman just asked Bernanke why he hasn’t ordered the banks to stop paying dividends.
Obviously, a gaffe worthy of the gallows, in my mind, but not for the reason your all thinking.
Bernanke has been pretending that the banking sector was still being operated by the private sector. He defined owning a 40% stake in a bank yesterday as a ‘public-private partnership’. You and me may call that Italian Fascism, but again, not the point Im getting at. Bernanke is trying to calm markets, thats sorta what his job requires when he goes out to talk to the clowns on the committees. But when even the committee members start to get the whole picture, spinning is a hard job for Bernanke to do.
The committee (of public safety -snark) is starting to realize the government is in a position to tell the banks what to do. Let that swirl around your brain. Elected officials and government bureaucrats are walking up and exploring the notion that they can tell the banks what to do. A gentleman on the same committee, I believe Garret, then asked straight up what they could and could not do. Could we tell them how and who to hire? Yes. Could we tell them when and how we issues dividends? Yes. Can we tell them how to operate their business? You wouldnt believe what Bernanke said, so Ill just tell you. Bernanke tells the guy that technically yes, but they wouldnt tell a bank how to do its business operations.
Right. Sure you wont. Does the name Henry Paulson mean anything to you? It should mean liar. Whatever your opinion of Tarp, and Son of Tarp, or on Paulson himself, one must admit he lied about what he was going to do with the money. Out and out lied. I know Treasury isnt Fed, but to me, any credibility these people had is long gone.
Bernanke, with that answer, was trying to continue his little show of pretending the government wouldnt be getting involved in the banks, notwithstanding the fact that they own them. Not even being partisan here, all the democrats on the committee were walking up to the fact that they could tell a bank what to do, the visions of social engineering (and grafting) floating in their heads, and little piggy smiles forming on their little piggy faces.
The republicans on the committee where aware of the fact that government can tell a bank what to do, only they were not smiling.
Sherman had other points that outed him. He why any business wouldnt do stress tests daily and always be in a position to handle a crisis. I mean, that sounds nice, but for real? Could you imagine running your business so conservatively that you had enough provisions to survive Armageddon at any and all times? These people do understand what risk is? That one must assume risk if one wants to generate profits?
Any one catch my head of state talking to Kudlow the other day? When Canadas PM is more of a capitalist then your President? Mixed up muddled up shook up world.