Elizabeth Warren, Consumer Protection Chief [1]

Investor’s Business Daily, IBD, May 23 headlines, “1,000 Small Banks May Be Shut Down Due To Dodd-Frank.”

So-called conservatives unwittingly and with the confidence of political creed, place themselves far right of Adam Smith in their half a century quest for deregulation. You cannot play baseball without rules and you cannot run an economy without regulation. The banking rules were there for a reason. They emerged from the depression of the 30s to prevent such a devastating crash from ever happening again. Banks lobbied ceaselessly for deregulation. They got it and look what happened.

This valorized political mantra of deregulation amounts to economic anarchy, pumping money into big banks and out of the hands of small banks, small business and the credit card population at large. The front-page journalism objecting to reinstating rules and restraints on the destructive behavior of giant banking monopolies strikes me as a political editorial based on a political belief system alone, like a religion, not journalism.

Difficult political choices become crystal clear in the light of their outcome. In this case, the outcome speaks for itself. Where did we get off allowing banks to merge into monopolies? How did we think that a bank could also be a brokerage house, let alone an insurance company? Credit card companies should be independent too. Does not the bank abdicate its fiduciary responsibility to its customers when it makes more in the market than it does supporting business and the consumer? Worse yet, insuring the failure of its mortgages by its own insurance branch seems a clear conflict of interest. Furthermore, banks package the mortgages and sell them again as investments from their own brokerage division. Then thy repackage them again buying back into the first package and selling the new one all over again.

This depression will not end until we regulate the banks once again. I do not know if the big monopolies will have to be broken up into local banks as before. However, I do not believe that banks can be brokerage houses. Investment banks should remain investment banks only and none of them should be in the insurance business.

I think the banks pulled a fast one when they changed the rules, prohibiting persons in bankruptcy from keeping their homes. Bankruptcy is a bank’s risk in lending mortgage money. I believe the fancy over leveraged hedge funds, credit default swaps and deceptive mortgages should be the bank’s problem and not that of the unemployed bankrupt families. As for fairness for those who have paid their mortgages and kept the faith, allowing your less fortunate neighbors to stay in their home won’t hurt you a bit and will in fact insure the value of your own home.

Political correctness from either party stinks. It is no less than propaganda meant to deceive the masses. There is a website, Elizabeth Warren for president. If she is that good, she is right where she belongs, directing bank regulation and consumer protection
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[1] Elizabeth Warren (born Elizabeth Herring; June 22, 1949) is an American attorney and law professor. She serves as Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau. She is also the Leo Gottlieb Professor of Law at Harvard Law School, where she has taught contract law, bankruptcy, and commercial law. In the wake of the 2008-2011 financial crisis, she became the chair of the Congressional Oversight Panel created to investigate the U.S. banking bailout (formally known as the Troubled Assets Relief Program). She has long advocated for the creation of a new Consumer Financial Protection Bureau, which was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law by President Barack Obama on July 21, 2010. http://en.wikipedia.org/wiki/Elizabeth_Warren