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Obama embraces House financial overhaul bill
Michael Pacheco
Issue date: 11/5/09 Section: Opinion
According to Obama, if banks and financial companies think they'll be bailed out, it will encourage risky behavior. So obviously that means we need to give the government the power to "dismantle" them. So they don't become too successful.
"WASHINGTON - President Barack Obama on Tuesday embraced a House bill that would give the government unprecedented power to seize bank holding companies and other large financial firms teetering on the brink of collapse and stick their competitors with the cost.
In a letter to House Financial Services Committee Chairman Barney Frank, Obama said the belief among financial executives that the government would ultimately protect them creates a 'perverse incentive' for large firms to take reckless risks.
'Taxpayers simply must not be put in the position of paying for losses incurred by private institutions,' Obama wrote in the letter, obtained by The Associated Press.
Under Frank's proposal, a council of regulators would be established to monitor financial firms regarded as so big and influential that their collapse could bring down the entire economy.
If the council determines that a firm has grown too big and dangerous, the Federal Reserve could step in to dismantle it. Firms with more than $10 billion of assets would be responsible for covering any outstanding costs of that action," the Associated Press article stated.
This is dangerous territory we're entering. The government can essentially take over, break up and sell off any company it deems to be too big?
If these liberals are oh-so-worried about the expectation of bailouts inspiring risky behavior among financial institutions, then why don't they stop the bailouts? No more "too big to fail." If they fail, so be it.
Nothing encourages good behavior like consequences. Consequences in the market are what we need. Not more government interference.
Government is the ultimate monopoly and thanks to a somnambulant public and a piece of paper which the political class wipes its ass with whenever convenient, they can enforce that monopoly by expropriation, imprisonment and execution.
"WASHINGTON - President Barack Obama on Tuesday embraced a House bill that would give the government unprecedented power to seize bank holding companies and other large financial firms teetering on the brink of collapse and stick their competitors with the cost.
In a letter to House Financial Services Committee Chairman Barney Frank, Obama said the belief among financial executives that the government would ultimately protect them creates a 'perverse incentive' for large firms to take reckless risks.
'Taxpayers simply must not be put in the position of paying for losses incurred by private institutions,' Obama wrote in the letter, obtained by The Associated Press.
Under Frank's proposal, a council of regulators would be established to monitor financial firms regarded as so big and influential that their collapse could bring down the entire economy.
If the council determines that a firm has grown too big and dangerous, the Federal Reserve could step in to dismantle it. Firms with more than $10 billion of assets would be responsible for covering any outstanding costs of that action," the Associated Press article stated.
This is dangerous territory we're entering. The government can essentially take over, break up and sell off any company it deems to be too big?
If these liberals are oh-so-worried about the expectation of bailouts inspiring risky behavior among financial institutions, then why don't they stop the bailouts? No more "too big to fail." If they fail, so be it.
Nothing encourages good behavior like consequences. Consequences in the market are what we need. Not more government interference.
Government is the ultimate monopoly and thanks to a somnambulant public and a piece of paper which the political class wipes its ass with whenever convenient, they can enforce that monopoly by expropriation, imprisonment and execution.
Viewing Comments 1 - 1 of 1
Hunter
posted 11/06/09 @ 3:44 PM EST
as a buisness major, I find that this is indeed a scary idea to consider. If I established a business that grew into a very successful one I wouldnt want someone to come in and tell me im too big and sell it all off to smaller bidders. (Continued…)
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