New chair of House Banking Committee: Gov't exists to "serve the banks"

[BrainGlutton]

Not making this up.

Alabama Republican Spencer Bachus, the incoming chairman of the House banking committee, suggested Congress and federal regulators should play a subservient role with banks.

"In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks," Bachus told The Birmingham News in an interview.

The Republican leadership last week designated Bachus the next chairman of the powerful House Financial Services Committee, which is tasked with overseeing banks, financial markets, housing and consumer credit.

Tell me, Congressman, do you really think that's what all the GOP voters this year really thought they were voting for?

[Giles]

Of course, he was talking about the main-street banks -- not those damned Wall Street banks that got the bailout.

But I do wonder how he thinks that the banks' customers fit into the scheme of bank regulation.

[gonzomax]

Just a standard Republican letting you know who he works for.

[Vinyl Turnip]

"It's a COOKBOOK!!!!"

[Scuba_Ben]

Originally Posted by Vinyl Turnip

"It's a COOKBOOK!!!!"

Wait, there's dust on the cover....

[Candyman74]

The goverment serves the people - including the peoples' businesses and companies. What's wrong with that?

Businesses and companies don't serve the government.

[Marley23]

Originally Posted by Candyman74

Businesses and companies don't serve the government.

No, they don't. On the other hand, the regulators don't exist to serve the banks. You can't be subservient to an industry and regulate it.

[Revenant Threshold]

Originally Posted by Candyman74

The goverment serves the people - including the peoples' businesses and companies. What's wrong with that?

Businesses and companies don't serve the government.

Accurate, but if an organisation has some say in terms of regulation and control, then it's not always a good idea for it to start off with a position of utter subservience.

The government serves the people, as you say, but it serves all people. If you focus on serving one group alone generally that means shafting everyone else to do so.

[Squink]

Originally Posted by Marley23

You can't be subservient to an industry and regulate it.

Aren't you forgetting the exemplary conduct of the Minerals Management Service ?
Without their aid, Deepwater Horizon/Macondo Prospect would have been an impossibility!

[Giles]

Originally Posted by Candyman74

The goverment serves the people - including the peoples' businesses and companies. What's wrong with that?

Businesses and companies don't serve the government.

There are some businesses that serve the government, but setting that aside --

Is bank regulation really just about serving the banks? Isn't the basic aim of bank regulation making the banking system work better for the banks' customers? (And those customers do include non-banking companies and businesses, as well as individuals.) It is worrying if a Congressman does not automatically assume that he's really trying to help the banks' customers, not the banks, even if helping the banks may often help their customers.

[Chefguy]

Originally Posted by Marley23

No, they don't. On the other hand, the regulators don't exist to serve the banks. You can't be subservient to an industry and regulate it.

I would replace the word "don't" with "shouldn't". This is exactly why the Fed exists today, and it's been their role since the Reagan administration. Bailouts is what they do, and Wall Street knows it, which is why they have zero compunction about carrying out the most outrageously rapacious financial schemes to place us all in jeopardy.

[Little Nemo]

It's the new economic cycle.

1. Republicans take over government.
2. Republicans deregulate financial institutions.
3. Financial institutions start taking foolish risks.
4. Foolish risks pay off for awhile.
5. Republicans take all the credit for prosperity.
6. Democrats warn about dangers of foolish risks.
7. Republicans laugh at Democrats and say that this time is different and prosperity will never end.
8. Foolish risks turn sour and cause economic collapse.
9. Republicans protect their friends from consequences of collapse.
10. Republicans briefly held responsible for their actions. Democrats take over government.
11. Democrats address the consequences of economic collapse.
12. As soon as the worst is over, Republicans start complaining about the costs of recovery. Blame that on the Democrats.
13. Republicans receive lost of campaign money from financial institutions in return for promises of deregulation.
14. Return to step 1.

[Really Not All That Bright]

You left out (somewhere around 7) "Some Democrats give up, forget all they know about bubbles".

[gonzomax]

http://www.rawstory.com/rs/2010/12/b...ols-hospitals/ Banks are fine corporate citizens who would never harm Americans.
Just google banking fines and pages and pages come up.

[Chefguy]

Originally Posted by gonzomax

http://www.rawstory.com/rs/2010/12/b...ols-hospitals/ Banks are fine corporate citizens who would never harm Americans.
Just google banking fines and pages and pages come up.

Even worse, the fines are a tiny percentage of profits. It's a ridiculous system as it now operates.

[Shayna]

Originally Posted by Little Nemo

It's the new economic cycle.

1. Republicans take over government.
2. Republicans deregulate financial institutions.
3. Financial institutions start taking foolish risks.
4. Foolish risks pay off for awhile.
5. Republicans take all the credit for prosperity.
6. Democrats warn about dangers of foolish risks.
7. Republicans laugh at Democrats and say that this time is different and prosperity will never end.
8. Foolish risks turn sour and cause economic collapse.
9. Republicans protect their friends from consequences of collapse.
10. Republicans briefly held responsible for their actions. Democrats take over government.
11. Democrats address the consequences of economic collapse.
12. As soon as the worst is over, Republicans start complaining about the costs of recovery. Blame that on the Democrats.
13. Republicans receive lost of campaign money from financial institutions in return for promises of deregulation.
14. Return to step 1.

We are so fucked.

With every passing day I'm more and more glad that I'm married to an EU citizen so I can move to Europe if it becomes necessary.

[NDP]

Originally Posted by Really Not All That Bright

You left out (somewhere around 7) "Some Democrats give up, forget all they know about bubbles".

Just so the numbering doesn't get thrown out of whack, make it "7a" and add "lest they be accused of class warfare."

[Llama Llogophile]

Huh. This was exactly the complaint about the FAA's oversight of airlines.

When some poor maintenance practices were found out, the consensus view was that the governmental agency in charge of regulating airlines had developed, "an overly collaborative relationship". Not OK with metal hurtling through the air, but apparently fine when it's money.

[What the .... ?!?!]

Originally Posted by Mach Tuck

Huh. This was exactly the complaint about the FAA's oversight of airlines.

When some poor maintenance practices were found out, the consensus view was that the governmental agency in charge of regulating airlines had developed, "an overly collaborative relationship". Not OK with metal hurtling through the air, but apparently fine when it's money.

Speaking of the FAA .... a buddy in the airline industry was complaining to me just a couple of days ago.

Apparently their idea of enforcing standards is to ask the carrier how he is going to do things and then simply enforce the carriers own procedures.

His complaint was that there may be no correct way to do something in the first place...... they just need to have something to enforce.

Certainly following established procedures is important but it would be nice if the agencies with the power also had some expertise.

[Squink]

Originally Posted by What the .... ?!?!

it would be nice if the agencies with the power also had some expertise.

But then you'd have to pay the experts.
We already have a scandal over Obama overpaying too many Federal bureaucrats who aren't doing a lick of good in their 'government jobs'*, and should all be made to go out and obtain actual gainful employment in the private sector.






*Yeah, 'government jobs'. It's an oxymoran. Deal with it.

[RickJay]

Originally Posted by BrainGlutton

Tell me, Congressman, do you really think that's what all the GOP voters this year really thought they were voting for?

Just to try to make this a real debate...

While his words may have been extremely ill chosen, think about it for a moment.

Isn't in the job of government to serve us? Are you really suggesting that government shouldn't serve us? Aren't even regulatory actions a form of service? The police are the ultimate regulatory body in a civilian-led country - but they serve us, do they not? They regulate my behaviour, and just this year gave me a crisp new speeding ticket to prove it, but isn't enforcement of law a service to me in many different ways? Gosh, I think so.

Indeed, the notion that regulations exist to HELP the people they work with is a very common one, and it's one that government departments themselves encourage, because it tends to result in more cooperation from the people they're enforcing regulations upon.

Perhaps because I work a lot with government regulatory agencies, I see no conflict between regulation and service. Regulation IS a service, and if the regulated party approaches it with the right attitude, they can derive benefits from regulation. Telling them "we're here to serve you" certainly can help foster that attitude.

[BrainGlutton]

Originally Posted by What the .... ?!?!

His complaint was that there may be no correct way to do something in the first place......

Highly unlikely in any form of aviation.

[foolsguinea]

Wait. We believe in 'government of the people, by the people, for the people," right? So a banking regulator is supposed to governor of the banks, be directed by the banks, for the sake of the banks. It's from the same basic premise. If you don't believe in that, what does that imply about democracy? Why is self-rule okay for the general populace (or the majority of that populace) & not okay for a given sector?

[elucidator]

In capitalist America, the bank robs you!

[BrainGlutton]

Originally Posted by foolsguinea

Wait. We believe in 'government of the people, by the people, for the people," right? So a banking regulator is supposed to governor of the banks, be directed by the banks, for the sake of the banks. It's from the same basic premise. If you don't believe in that, what does that imply about democracy? Why is self-rule okay for the general populace (or the majority of that populace) & not okay for a given sector?

This is a whoosh, right?

[Batfish]

Originally Posted by gonzomax

Just a standard Republican letting you know who he works for.

It's the degree of honesty that's non-standard.

[Fotheringay-Phipps]

This is the kind of gotcha political jive that people highmindedly claim to dislike but really only dislike when it's about their own guys. Here's the fuller quote from what appears to be the original source

Bachus, in an interview Wednesday night, said he brings a "main street" perspective to the committee, as opposed to Wall Street.

"In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks," he said.

He later clarified his comment to say that regulators should set the parameters in which banks operate but not micromanage them.

[Squink]

So the "later clarification" makes it all copacetic then?
Can we call that a walkback, or would that be unfair to the Republican's "sensitive nature"?

Perhaps someone needs to ram a red hot poker up the guy's ass, and then explain later that it was supposed to just be a dick?
That'd be OK too, right?

There's no point getting all persnickety over words and deeds, is there? Having looked in Bacchus' eyes, we all Know that his heart is in the right place with regard to America, don't we?

[Little Nemo]

Originally Posted by Fotheringay-Phipps

This is the kind of gotcha political jive that people highmindedly claim to dislike but really only dislike when it's about their own guys. Here's the fuller quote from what appears to be the original source

You do realize that your "fuller quote" is word-for-word identical to what the OP said it was?

[BrainGlutton]

Originally Posted by RickJay

Isn't in the job of government to serve us?

That depends, as it so often does, on exactly who you mean by "us."

In the context of Bachus' statement, it means nothing conceivably relevant.

[RickJay]

Originally Posted by BrainGlutton

That depends, as it so often does, on exactly who you mean by "us."

In the context of Bachus' statement, it means nothing conceivably relevant.

Well, that was an effective job of snipping one line out of my post and ignoring the actual thrust of it. Well done.

Again; what, taken literally, is wrong with his statement? It's the job of the government - including the regulatory parts - to serve its constitutents, which, whether you like it or not, includes business, big and small. Regulation and service are not mutually exclusive.

[BrainGlutton]

Originally Posted by RickJay

Well, that was an effective job of snipping one line out of my post and ignoring the actual thrust of it. Well done.

Again; what, taken literally, is wrong with his statement? It's the job of the government - including the regulatory parts - to serve its constitutents, which, whether you like it or not, includes business, big and small. Regulation and service are not mutually exclusive.

All the American people are the constituents of the federal government.

The businesses in a given regulatory agency's field are not, in any relevant sense, the constituency of that agency.

[Squink]

Originally Posted by BrainGlutton

The businesses in a given regulatory agency's field are not, in any relevant sense, the constituency of that agency.

Drunks, drug dealers, wifebeaters and killers aren't the constituency of the local cop shop?
That's a radical notion there, Brainglutton!
Why if the police commissioner said publicly that his job was to serve hookers, I'm sure you'd be cheering, right along with RickJay.

[Little Nemo]

Originally Posted by RickJay

Well, that was an effective job of snipping one line out of my post and ignoring the actual thrust of it. Well done.

Again; what, taken literally, is wrong with his statement? It's the job of the government - including the regulatory parts - to serve its constitutents, which, whether you like it or not, includes business, big and small. Regulation and service are not mutually exclusive.

So if a congressman announced that the job of the Drug Enforcement Agency was to serve drug dealers, it would be okay? Because some of his constituents are drug dealers who would best be served if the DEA would agree to look the other way while they were conducting their business.

[Dallas Jones]

Originally Posted by What the .... ?!?!

Speaking of the FAA .... a buddy in the airline industry was complaining to me just a couple of days ago.

Apparently their idea of enforcing standards is to ask the carrier how he is going to do things and then simply enforce the carriers own procedures.

His complaint was that there may be no correct way to do something in the first place...... they just need to have something to enforce.

Certainly following established procedures is important but it would be nice if the agencies with the power also had some expertise.

Cooperative collaboration between government regulators and the business involved seem to be the norm.

The animal feed manufacturer I used to work for also made medicated feed, which meant that we were to be inspected by the Dept of Agriculture, and because of the drugs, by the FDA. I was responsible for the medicated feed program and developed it over the course of about 20 years.

At no time dring those 20 years did an inspector ever show up that I didn't know was coming. The inspector would usually call me a week in advance and let me know it was time for our inspection and would Tuesday be Ok? We would review procedures and he might suggest a change which I would now include as part of the program.

He got something to document and I got something to respond to, we both had done our jobs. This is my somewhat limited experience with government oversight but I wouldn't really call it regulating or even oversight. I call it making sure you have paperwork that makes it look like you are doing something when you really aren't.

[Llama Llogophile]

Originally Posted by Dallas Jones

Cooperative collaboration between government regulators and the business involved seem to be the norm.

The animal feed manufacturer I used to work for also made medicated feed, which meant that we were to be inspected by the Dept of Agriculture, and because of the drugs, by the FDA. I was responsible for the medicated feed program and developed it over the course of about 20 years.

At no time dring those 20 years did an inspector ever show up that I didn't know was coming. The inspector would usually call me a week in advance and let me know it was time for our inspection and would Tuesday be Ok? We would review procedures and he might suggest a change which I would now include as part of the program.

He got something to document and I got something to respond to, we both had done our jobs. This is my somewhat limited experience with government oversight but I wouldn't really call it regulating or even oversight. I call it making sure you have paperwork that makes it look like you are doing something when you really aren't.

But what if you had been doing something egregiously and unambiguously wrong? I'm guessing the situation would have become less cooperative and more of an enforcement action.

It can be the same in aviation at times. Of course, there are also times where the FAA doesn't have the expertise to adequately supervise. I've seen both situations.

[Robot Arm]

Originally Posted by RickJay

Again; what, taken literally, is wrong with his statement?

If the banks put the needs of their customers ahead of their own, then we wouldn't need to regulate them. But they don't. Banks, and everyone else, are expected to act in their own self interest. There's nothing wrong with that, but when our interests conflict and regulation is needed, it should be on behalf of us, the citizens, and not us, the banks.

[Polycarp]

You know, while Bachus no doubt deserves to be lambasted for a number of things, this Bidenesque faux pas is not IMO among them. He emitted a sound bite that came across as a parody of Republican values, then quickly issued a clarification of what he meant.

And on reviewing his Wikipedia biography, I'm inclined to believe him, at least as far as I believe any political figure's public utterances.

Old-boy White Southern Establishment? Yeah, he's that. Business friendly? Yeah, that too. Mindless populist pseudo-libertarian Tea Party type? Nope, that doesn't fit.

He's supported a few bipartisan measures, like TARP. He was quick to condemn Sarah Palin's endorsement of Tea Party types, as harming Republican chances to win a Senate majority. He got a lot of grief from fellow Republicans for being publicly critical of St. Sarah of Wasilla and her cohorts.

If we can mock the Republican stance as "Let's turn our backs on the private sector, and let the market sort out who survives," we could equally well caricature the Democratic stance as "If it moves, regulate it." And what it seems he tried to express was, Government regulation of a sector of the economy is for the long-term health of that sector of the economy. Regulation is needed, micromanagement by government bureaucracy is not.

I may very well disagree with how much regulation he thinks is appropriate. But I see a big difference between his stance and the typical Teabagger ant-gummint demagoguery. And I'm not yet ready to condemn Bachus for a single faux pas.

[BrainGlutton]

Originally Posted by Polycarp

You know, while Bachus no doubt deserves to be lambasted for a number of things, this Bidenesque faux pas . . .

You misspelled "Freudian slip."

[Fotheringay-Phipps]

Originally Posted by Squink

So the "later clarification" makes it all copacetic then?
Can we call that a walkback, or would that be unfair to the Republican's "sensitive nature"?

That depends a lot on whether he made the statement and only took it back after public reaction, or immediately. In this case, he appears to have clarified his remarks at the time.

Originally Posted by Little Nemo

You do realize that your "fuller quote" is word-for-word identical to what the OP said it was?

No. He did not say "subservient". His remark was in the context of being "main street versus wall street". And his clarification.

[BrainGlutton]

Originally Posted by Fotheringay-Phipps

No. He did not say "subservient". His remark was in the context of being "main street versus wall street". And his clarification.

A Tea Partier might, at this point in American history, be able to make a colorable claim to represent Main Street against Wall Street; but no old-line Republican like Bachus can, not since the Gilded Age.

[Fotheringay-Phipps]

That's not the point. So you say his claim is wrong. Fine. But the point is that that remark, in the context of "main street versus Wall street" most likely meant what he later clarified it to mean - that the government should get off people's backs and not micromanage them. ("Wall Street" in this context refers to big time bailout recipient, campaign contributing operators. "Main Street" means small business people who want to go about their own business.)

[Dallas Jones]

Originally Posted by Mach Tuck

But what if you had been doing something egregiously and unambiguously wrong? I'm guessing the situation would have become less cooperative and more of an enforcement action.

Of course, but the offense would need to be pretty blatant or more likely the result of a complaint from an outside source that would give the regulatory agency no choice but to respond seriously.

The point I was trying to make is that the relationship between industries and the government regulatory agency responsible for oversight is a symbiotic one rather than a confrontational role.

So in a sense Bachus accidentally mispoke the truth. The regulatory agencies are there to work with industry rather than to make sure that industry is doing everything it is supposed to do.

The intention in theory may be oversight, but the practice is cooperation. Spencer Bachus' mistake was in accidentally letting this truth out into the air.

[kaylasdad99]

Originally Posted by Fotheringay-Phipps

That's not the point. So you say his claim is wrong. Fine. But the point is that that remark, in the context of "main street versus Wall street" most likely meant what he later clarified it to mean - that the government should get off people's backs and not micromanage them.

Was "micromanagement" on the table somehow, such that Mr. Bachus felt a need to refudiate the concept, or was that apropos of nothing in particular?

ISTM that under-regulation of banks has been a pretty convincing theme during our current economic unpleasantness. If I felt that Mr. Bachus were persuaded that this was a problem, and that it behooves him to avoid repeating the error, I'd be more likely to take his "clarification" at face value.

[BrainGlutton]

Originally Posted by kaylasdad99

Was "micromanagement" on the table somehow, such that Mr. Bachus felt a need to refudiate the concept, or was that apropos of nothing in particular?

ISTM that under-regulation of banks has been a pretty convincing theme during our current economic unpleasantness. If I felt that Mr. Bachus were persuaded that this was a problem, and that it behooves him to avoid repeating the error, I'd be more likely to take his "clarification" at face value.

It would be pretty brazen of anyone post-1998, let alone the incoming Chair of the House Banking Committee, even to speak the word "micromanagement" in this context.

[Little Nemo]

No. He did not say "subservient". His remark was in the context of being "main street versus wall street". And his clarification.

Oh, I see. I thought when you were talking about the quote, you were refering to what Bachus said not what the reporter said. Because, quite frankly, who cares what the reporter said? Bachus is the chairman of the House banking committee.

Interesting that you think the spin on what Bachus said is a more important issue than what Bachus himself actually said.

[RickJay]

Originally Posted by BrainGlutton

All the American people are the constituents of the federal government.

The businesses in a given regulatory agency's field are not, in any relevant sense, the constituency of that agency.

Neither I nor, you may be surprised to learn, the people who actually work in these fields, agree with you.

Originally Posted by Robot Arm

If the banks put the needs of their customers ahead of their own, then we wouldn't need to regulate them. But they don't. Banks, and everyone else, are expected to act in their own self interest. There's nothing wrong with that, but when our interests conflict and regulation is needed, it should be on behalf of us, the citizens, and not us, the banks.

I again must point out that is is ignorant and fallacious to assume that regulation does not provide benefits to the parties being regulated. You're making the assumption, an incprrect assumption, that regulation is a "government vs. the regulated party" relationship, that it's the government protecting Party X, which is not the regulated party, from Party Y. That is just not so.

Properly done, regulation can enormously benefit regulated parties. I'm not going to go into pages and pages of economics and game theory and blah blah blah to bore you to death, but it's so. Companies often find - to use a very common example - that workplace safety regulation is a hugely beneficial thing,. Indeed, I've heard more than a few factory owners say that they find safety authorities remarkably helpful.

I realize this isn't a popular position in the current "evil big bizniss" environment where you're expected to be either on the side of the knuckle-dragging Tea Party types or on the side of those charging the barricades, but nevertheless, Bachus was right. The government serves us, and "us" includes our financial institutions. For that matter, "us" includes criminals. It includes tax cheats and people who drive drunk and truckers who drive past the legal hours of work limits and people who commit zoning violations and double parkers. Sometimes the service the government provides must be regulation, sometimes even punishment, but we're very unwise to forget that it exists to serve us. And when you do regulation right it can be good for everyone.

[Little Nemo]

Originally Posted by RickJay

I again must point out that is is ignorant and fallacious to assume that regulation does not provide benefits to the parties being regulated. You're making the assumption, an incprrect assumption, that regulation is a "government vs. the regulated party" relationship, that it's the government protecting Party X, which is not the regulated party, from Party Y. That is just not so.

Properly done, regulation can enormously benefit regulated parties. I'm not going to go into pages and pages of economics and game theory and blah blah blah to bore you to death, but it's so. Companies often find - to use a very common example - that workplace safety regulation is a hugely beneficial thing,. Indeed, I've heard more than a few factory owners say that they find safety authorities remarkably helpful.

I realize this isn't a popular position in the current "evil big bizniss" environment where you're expected to be either on the side of the knuckle-dragging Tea Party types or on the side of those charging the barricades, but nevertheless, Bachus was right. The government serves us, and "us" includes our financial institutions. For that matter, "us" includes criminals. It includes tax cheats and people who drive drunk and truckers who drive past the legal hours of work limits and people who commit zoning violations and double parkers. Sometimes the service the government provides must be regulation, sometimes even punishment, but we're very unwise to forget that it exists to serve us. And when you do regulation right it can be good for everyone.

What "evil big bizniss" environment? Is there some mass movement out there "charging the barricades" as you claim?

But setting that aside, I agree that regulation does not have to be adversarial. Ideally, regulation should just be a quiet framework that businesses work within - the equivalent of the FCC regulating which airwave frequencies different broadcasters use.

However, we don't live in an ideal world. In the real world, businesses often seek to influence the government to favor them. As you point out the government is supposed to serve everyone including business owners. But the government should not be serving business owners instead of everyone else.

Remember, when the government starts working hand in hand with business what you have is socialism. And I'm pretty sure Representative Bachus was not elected on a platform of enacting socialism.

[Vinyl Turnip]

Originally Posted by Little Nemo

What "evil big bizniss" environment? Is there some mass movement out there "charging the barricades" as you claim?

Big Corporations: we can do anything we want!

Liberals: well, actually...

Big Corporations: YOU'RE ANTI-BUSINESS!

Right-wing Media: THEY'RE ANTI-BUSINESS! RAR RAR RAR RARRR!"



(idea edited to fit page)

[RickJay]

Originally Posted by Little Nemo

What "evil big bizniss" environment? Is there some mass movement out there "charging the barricades" as you claim?

Dude, look around the SDMB. Politics is just a little polarized right now.

Note that already I'm being implied as being a supporter of right wing media. Took about four posts.