A nail-biting Cross-Post from RBO.
April 5, 2009 by Procrustes
Rarely ever has RBO taken Democratic political creature and alarmist (and rabid Clinton hater) Dick Morris even remotely serious. This time what he has to say deserves a modicum of attention. If he is correct, it’s looking more and more like the Tea Party movement has an even bigger chore ahead.
Thanks to Gateway Pundit, we learn of Morris’s April 3 claim “Obama Just Repealed the Declaration of Independence”. GP writes:
- American political author and commentator Dick Morris explains in a rare video release that Barack Obama effectively repealed the Declaration of Independence [as far as the American economy is concerned] this week at the G20 Meeting in London.
Sher Zieve wrote April 3 at WEBCommentary:
- On FNC’s Greta Van Susteren’s program, author and columnist Dick Morris noted “literally from April 2nd of this year, that is, today, it’s a whole new world of financial regulation in which, essentially, ALL of the U.S. regulatory bodies and ALL U.S. companies are put under international regulation, international supervision. It really amounts to a global economic government.”Called the Financial Stability Board (FSB), the pending international body’s legislation*—which will of course override the US Constitution—states: “We agree to a framework of internationally agreed upon high standards. We will set up a financial stability board with a strengthened mandate to extend regulation and oversight to all systemically important financial institutions, instruments and markets” — including hedge funds, all — anything that they decide is important to the system — to endorse and implement tough new principles on paying (ph) compensation and to support sustainable compensation schemes and the corporate social responsibility of ALL firms.” The international community will now be able to determine the salaries and compensation of us all.
*Note the word “legislation” is not accurate. It is the April 2 G20 / London Summit Leader’s Statement to which they refer.
The Financial Times reported April 2:
- [...] the G20 issued a communiqué that renamed the FSF the “Financial Stability Board”, with an elevated mandate to monitor global financial stability and promote medium-term reform, alongside the International Monetary Fund. The G20 also confirmed an earlier announcement that the FSB would expand its membership to include representatives from all the G20 nations for the first time – in effect turning the group into the nearest thing the world has to a prototype of a an overarching global financial regulatory group.For the moment, FSF officials deny they plan to act like a world regulator.
Scotland’s Sunday Herald reports:
- The 10-year-old Financial Stability Forum, based in Basel, Switzerland, suddenly finds itself in the unexpected role of a super-regulator with a new name – the Financial Stability Board – and ordained with new powers to patrol global capitalism.The FSF issued warnings that high bonuses for high-risk ventures were out; that hedge funds would have their risk-taking evaluated; that accounting rules would be rewritten; that derivatives would now have to be sold through a central clearing house; and credit agencies, who got blamed for bad calls on dodgy firms, would be better supervised.
MarketWatch’s Alistair Barr commented April 2:
- This is the latest sign that hedge funds and credit rating agencies won’t be spared from a global push to regulate major parts of the financial system that grew outside the traditional banking network. [...]Regulation and oversight will be extended “to all systemically important financial institutions, instruments and markets,” the group added. “This will include, for the first time, systemically important hedge funds.”The recommendations are similar to Treasury Secretary Timothy Geithner’s proposal last month to increase regulation of non-bank financial companies, including brokerage firms, hedge funds, money-market funds and insurers through the creation of a new, large “systemic” regulator.
“[T]here will be a crackdown (although no cap) on bankers’ pay and bonuses,” The Independent (UK) adds.
The Observer (UK) reports:
- A new financial stability board, bringing together central banks, national regulators and finance ministers from the G20 countries, will co-ordinate international rules in a bid to ensure that future financial crises are handled better. It will be a souped-up version of the Basel-based Financial Stability Forum, created a decade ago to include G8 members, which has led much of the work on analysing the causes of the crunch over the past year.It is chaired by the ebullient Mario Draghi, head of the Italian central bank, who has delivered a consistent message that we must not return to business as usual for bankers. Any “systemically important” financial institution – ie, all those whose collapse could threaten entire markets and economies – will find itself being monitored.
British Prime Minister Gordon Brown wasted no time, “calling the heads of Britain’s banks to Downing Street to make sure new regulations on bonuses, capital and tax havens drawn up at last week’s G20 summit are implemented properly,” Philip Aldrick writes in today’s The Telegraph (UK).
The Financial Times wrote April 2:
- Exactly how the FSB will impose such global “consistency” – let alone monitor it – remains to be seen. The body has no formal powers to impose anything, and insists that it plans to work alongside the IMF, rather than surplant its activity. In practical terms, it will have little choice.While the FSB says it will expand its secretariat, which is tiny, the permanent staff is likely to remain fairly small. That may constrain its ability to provide much independent monitoring.
In an editorial, Scotland’s Sunday Herald points out the G20 “communiqué made no mention of [the Board's] powers and there is still a danger that it will be a toothless tiger.”
Australia’s The Age shares a common sentiment:
- The Financial Stability Forum, whose members include finance ministries, regulators and central banks, including Australia’s Reserve Bank, is set to be transformed by the G20 into the Financial Stability Board, with a bigger membership and mandate.The forum currently aims to “promote international financial stability”.’Frameworks”, “principles” and meetings, as opposed to hard-edged rules, are its stock-in-trade.”It has no enforcement power. It has an encouragement role,” says Ian Ramsay, corporate law expert at Melbourne University.Its new tasks include advising on and monitoring regulation among its members, and collaborating with the International Monetary Fund on “early-warning exercises” aimed at stopping the next financial crisis.But will the new FSB have teeth? “The language they use is moderate, advise, strategic reviews and collaboration,” Professor Ramsay says. “I’m not suggesting it’s not an important role, but it remains to be seen how much we can expect from a body which is an advisory body.”
David Benyon of OpRisk & Compliance magazine comments:
- It is unclear how strong this new mandate will be, without, for example, mention of powers of ‘comply or explain’.
Finally, the Christian Science Monitor editorial board weighs in with a bit of sanity:
- The G-20 did agree to coordinate each country’s new regulations through a new Financial Stability Board. But anyone who’s ever held a job of “coordinator” knows there is no authority in it.
Mark Steyn doesn’t think G20 or Obama are “serious”
Hartford, Conn. 07/05/08
No. Steyn isn’t writing specifically about the new Financial Stability Board — he doesn’t see that the G20 or Obama are “serious” about dealing with the debt being heaped upon future generations as you read.
In his March 14 NRO post The Brokest Generation Steyn pointed out that the children and grandchildren who stood behind Barack Obama “at all those campaign rallies helping him look dynamic and telegenic and earnestly chanting hopey-hopey-changey-changey … hadn’t offered to pick up the tab.”
- Are you sure you young folks will be able to pay off this massive Mount Spendmore of multi-trillion-dollar debts we’ve piled up on you?“Yes, we can!”We thought you’d say that! God bless the youth of America! We of the Greatest Generation, the Boomers, and Generation X salute you, the plucky members of the Brokest Generation, the Gloomers, and Generation Y, as in “Why the hell did you old coots do this to us?”Because, as politicians like to say, it’s about “the future of all our children.” And the future of all our children is that they’ll be paying off the past of all their grandparents. At 12 percent of GDP, this year’s deficit is the highest since the Second World War, and prioritizes not economic vitality but massive expansion of government. But hey, it’s not our problem. As Lord Keynes observed, “In the long run we’re all dead.” Well, most of us will be. But not you youngsters, not for a while. So we’ve figured it out: You’re the ultimate credit market, and the rest of us are all pre-approved! [...]This is the biggest generational transfer of wealth in the history of the world. If you’re an 18-year old middle-class hopeychanger, look at the way your parents and grandparents live: It’s not going to be like that for you. You’re going to have a smaller house, and a smaller car — if not a basement flat and a bus ticket. [...]When you come to take your seat at the American table (to use another phrase politicians are fond of), you’ll find the geezers, boomers, and X-ers have all gone to the men’s room, and you’re the only one sitting there when the waiter presents the check. That’s you: Generation Checks.The Teleprompter Kid says not to worry: His budget numbers are based on projections that the economy will decline 1.2 percent this year and then grow 4 percent every year thereafter. Do you believe that? In fact, does he believe that? [...]
[...] GM is a welfare project masquerading as economic activity. And, after the Obama transformation, America will be, too. The young need to recognize that this is their fight. They need to stop chanting along with the hopeychangey dirges and do something more effective, like form the anti-AARP: the association of Americans who’ll never be able to retire.
- Actually, the column in question made entirely the opposite point: – that the “Greatest Generation”, the Boomers, Gen X and Gen Y were perpetrating against those high schoolers and their kindergarten siblings the greatest act of cross-generational theft in the history of mankind.
Pause: In RBO’s humble opinion, those of the “older generation”, the “Boomers, Gen X and Gen Y”, to whom Steyn refers, include members of Congress and Barackistanis who hand-delivered this mess to the rest of us who didn’t and don’t want it. You can’t paint us all with the same broad brush.
Steyn next refers to Richard Fernandez of the Belmont Club, whom Steyn says “gets it”:
- The Financial Times explains in numbers what Mark Steyn has asserted in words. We don’t have enough people to pay our bills. The advanced economies are piling up generational debt so fast they need to make children pronto so they can saddle them with unpaid obligations. Forget having kids because they’re wonderful; you need them to pay off the stimulus. The FT says the ageing bill will be a tsunami that will dwarf the current economic meltdown.
Steyn also explains that countries aren’t talking about “the demographic-economic catastrophe just beyond the horizon – say, mid-century – but within ten years. If you’re not talking about this, you’re not serious. Which is why the O-man and the G-20 aren’t serious.”
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