"Secretary Geithner, Which Clause of the Constitution Authorizes Your Actions?"

 

Basically what he said was, "What Constitution?"

 

U.S. Seeks Expanded Power to Seize Firms


Washington Post  | http://www.washingtonpost.com/wp-dyn/content/article/2009/03/23/AR2009032302830.html

Tuesday, March 24, 2009 | Binyamin Appelbaum and David Cho

 

The Obama administration is considering asking 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, according to an administration document.

Giving the Treasury secretary authority over 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 the document.

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

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

Giving the Treasury secretary authority over 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 the document.

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

Treasury Secretary Timothy F. Geithner is set to argue for the new powers at a hearing today on Capitol Hill about the furor over bonuses paid to executives at American International Group (http://financial.washingtonpost.com/custom/wpost/html-qcn.asp?dispnav=business&mwpage=qcn&symb=AIG&nav=el), which the government has propped up with about $180 billion in federal aid. Administration officials have said that the proposed authority would have allowed them to seize AIG last fall and wind down its operations at less cost to taxpayers.

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.

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 (http://financial.washingtonpost.com/custom/wpost/html-qcn.asp?dispnav=business&mwpage=qcn&symb=LEH&nav=el), 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.

Josie06 Josie06
56-60, F
8 Responses Mar 24, 2009

Non-financial institutions! Forget banks, AIG and these we've seen. Look to non-financial types that are "to big to fail" --- GM might be the start ... you mean like Coke Cola or some other non-financial type company. These are unprecedented powers. What happened to bankruptcy? <br />
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Resolution authority power invested in the President and the unelected SECTREAS. No other oversight here, total judgement vested in the SECTREAS. Rediculous! This is more than any previous President has tried ... except FDR. But FDR didn't get all the power he sought ... will this President?<br />
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Where is everyone who was up in arms at the Patriot Act screaming that it was invasive and unconstitutional? They are just laying back allowing this massive aggression and invasion into the life of America. <br />
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These acts of government in the last 60 days are more oppressive and invasive than any other acts by recent Presidents before.<br />
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WASHINGTON, March 24 (Reuters) - U.S. President Barack Obama said on Tuesday the administration was "hard at work" on a detailed proposal that would give it the power to close down non-bank financial institutions that get into financial trouble.<br />
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"Right now, we do not have resolution authority for a non-bank institution like AIG that is comparable for banks that get into trouble using the FDIC," Obama told reporters after his meeting with the Australian prime minister.<br />
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"In the absence of that capacity, you end up with the situation we've been in, ... an institution that poses systemic risks to the system but a lack of capacity to close it down in an orderly fashion, renegotiate contract, sell off bad assets," he said.<br />
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"We are already hard at work in putting forward a detailed proposal," Obama said. "We will work in consultation with members of Congress. That will be just one phase of a broader regulatory fr<x>amework that we're going to have to put in place to prevent these kinds of crises from happening again."<br />
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His remarks came after Treasury Secretary Timothy Geithner told members of Congress he needed the authority to close non-bank financial institutions that get into trouble.<br />
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(Excerpt) Read more at reuters.com ... http://www.reuters.com/article/etfNews/idUSWAT01120120090324

The US government can already seize banks ... now they want to seize investment firms.<br />
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Thereby making the GOVERNMENT the INVESTMENT.

MORE ....<br />
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Investment firms to profit in bank plan<br />
Washington Times | March 24, 2009 | Patrice Hill<br />
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Tuesday, March 24, 2009 <br />
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The Treasury's long-awaited plan to sell off toxic loans has the potential to provide windfalls for banks and investment firms that manage and participate in the program.<br />
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By providing $100 billion in cash and many times that amount in loans, the Treasury plan would enable investors to jointly purchase up to $1 trillion in bad loans from ailing banks. If the banks receive high prices on the loans - something Treasury indicates it prefers - the banks would be the primary beneficiaries, analysts say.<br />
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But if investors purchase the loans at low prices and the assets later appreciate significantly, the investors would make out like bandits.<br />
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"Will people be able to make a killing? Yes," particularly because Treasury is willing to augment the returns for investors by providing loans worth six times their cash investments, said Arthur Levitt, a former chairman of the Securities and Exchange Commission.<br />
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The biggest winners may be the five major investment firms that the Treasury plans to hire to manage the gigantic program, Wall Street executives say. These are almost certain to include Pimco, the big bond fund, and Blackstone, the private equity group, both of which suggested the investment program to Treasury and helped design it.<br />
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The boon for banks and investment companies helped drive a gleeful stock market reaction to the plan Monday, with the Dow Jones Industrial Average surging nearly 500 points...<br />
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(Excerpt) Read more at washingtontimes.com ... http://www.washingtontimes.com/news/2009/mar/24/investment-firms-stand-to-profit-in-treasury-plan/

Ensure it, with ACORN running the Census under Rham Emanuel.

white house is really showing it colors with all the power it is wanting and putting into place. by the end of his term the congress and surprem court will not be needed. All things will be under Obama's control.

This Constitution-thingy isn't really liked in Washington D.C.

Jimmah Carter was stupid. i don't think Obama is ... i think he knows exactly what he is doing.<br />
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Transparency and Accountability will not be hallmarks of this Administration. Hope & Change ... NOT!<br />
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One step closer to Socialism.<br />
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More news:<br />
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Senator Benjamin Cardin( D-Md.) introduced a bill on the Senate floor today that would allow newspapers to elect to receive tax-exempt status all they have to do is promise not to endorse any political candidates (but they can report on the campaign).<br />
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Se, J Rockefeller (WV) sayd the Internet should never have existed (http://www.freerepublic.com/%5Ehttp://www.youtube.com/watch?v=Ct9xzXUQLuY).<br />
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A bill to shift cybersecurity to White House by Stephanie Condon (news.cnet.com). Forthcoming legislation would wrest cybersecurity responsibilities from the U.S. Department of Homeland Security and transfer them to the White House, a proposed move that likely will draw ob<x>jections from industry groups and some conservatives.

is government going out of it's way to bring down the country on purpose or are they all just really this stupid?