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By Marion Edwyn Harrison, Esq.
April 03, 2008
Undoubtedly Secretary of the Treasury Henry M. Paulson, Jr., and those working with him on the latest, almost incomprehensibly sweeping, proposal for reorganization of much of the Federal bureaucracy are to be commended. For what? At least for their courage, effort and imagination. Whether Congress, and especially its liberal leadership, will implement the plan or some variation is questionable.
It would require a writer with more than one degree in history and two in law and a lifetime of working in, with or sometimes against, the Feds to analyze the merits of the proposal.
Our banking and related system has met challenges. The challenges of 1863 (paying for the Civil War), 1913 (runs on deposits, creation of the Federal Reserve System) and 1929 - 1933 (the beginnings of, and the, Great Depression, with ubiquitous bank failures) come to mind. However, many economists and historians view the tragedy of World War II as a major cause of getting the country out of the Great Depression.
Historical cause and effect aside, it is obvious there is too much independent and uncoordinated Federal regulation and purported regulation of the economy. (In alphabetical, not weight, order), the Comptroller of the Currency, Federal Deposit Insurance Corporation, Federal Reserve, National Credit Union Administration and Office of Thrift Supervision, two of them part of the Department of the Treasury, are all players.
Another Federal player almost universally overlooked is the Federal Trade Commission. Think of the plethora of misleading, phoney, sometimes fraudulent, advertisements in the print media, on TV, in direct mail which now are promising not only financial redress for afflicted citizens but, gee whiz, sometimes a means to make the family chucked on to the street millionaires. FTC obviously should have been, and should be, vigorous in bringing civil actions against many of these culprits. Unfortunately, as this column several times has noted, the Department of Justice and our United States Attorneys already are inundated with cases that could be prosecuted were there more manpower and less backlog.
This commentary addressed several aspects of this subject on October 10, 2007, column following, as did yesterday’s column. The tentative conclusion at that time has hardened. Extensive Federal regulation has failed. How ironical, considering all the Federal activities which need not - often ought not - be performed by the Federal Government. Overall regulation of the banking system, using that term broadly, is a justifiable Federal function. At this juncture one must hope that Congress objectively will analyze the problems and possible solutions. Even less likely, if this writer dare predict, a couple of Presidential candidates could defer offering purported solutions.
Marion Edwyn Harrison is President of, and Counsel to, the Free Congress Foundation
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