Late on Thursday night, an effort to rein in the mega-banks that brought the American economy to the brink of disaster died on the Senate floor. Sens. Ted Kaufman (D-Del.) and Sherrod Brown (D-Ohio) had offered an amendment that would have broken up the biggest banks and forced them to scale back the amount of money they borrow to amplify their bets in the financial markets (a reform known as leverage limits). Experts said the Kaufman-Brown amendment, which failed by a vote of 60-33, would have helped safeguard the economy against another crisis. So why did the Obama administration, which has urged Congress to overhaul the financial system, distance itself from—and even oppose—this measure?
It makes sense that, if one is worried about “too big to fail,” the easiest solution is to keep banks from getting too big! Breaking up monopolies is a well-honoured technique in this country; Teddy Roosevelt made his reputation in part on “trust busting.” But our current régime is too much in the pocket of large financial institutions–and too enamoured with centralisation as the answer–to do something that sensible. And I’m not sure the Republicans, who still think that breaking up large entities is a slap at upward social mobility, have connected the dots on this either.
The second, from the House Republicans (HT to a relative):
As members of the Republican Savings Solutions Group, we write today to express our strong opposition to any proposal to eliminate or federalize private-sector defined contribution pension plans, such as 401(k)s, or impose burdensome new requirements upon the businesses, large and small, who choose to offer these plans to their employees.
The whole idea of centralising the retirement system in the US–with the transitional taxable events as the existing 401(k) and 403(b) holders stampede for the exits–is another irresistible temptation for our centralising élites.