Can the Federal Reserve Protect Consumers?

Ben Bernanke, chairman of the Federal Reserve, insists that the Fed can protect consumers effectively against defective or dangerous financial products.  He and his allies are therefore signaling opposition to – and even defiance of – key parts of the Treasury’s plan for regulatory reform, which involve setting up a new Consumer Financial Protection Agency.

The Fed is a well-regarded institution in general and Bernanke is currently riding a wave of personal popularity and prestige, but are these claims vis-à-vis consumers plausible?

Not really.

The heart of the problem here lies with the Federal Reserve Act.  As it currently stands, the all-important Section 2A reads, “The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.”

This is what the Fed does – in practice by trying to keep unemployment down (ideally around the 4-5% mark, although that can change over time) and inflation low (no more than 2%, roughly).

Formal objectives matter for central banks because they have to weigh trade-offs – “if we try to lower unemployment, what will that do to inflation?” etc – carefully in deciding where to set short-term interest rates and other dimensions of their support to the credit system.

Consumer protection is not in this mix and you can tell.  No one can seriously tell you what a great job the Fed has done protecting consumers.   For example, the Fed has dragged its feet for years on coming up with a sensible definition of the Annual Percentage Rate on loans, i.e., a measure that includes all costs.  As a result, many borrowers have been misled effectively by lenders.

More broadly, Alan Greenspan famously stood by despite being warned by his colleagues about the housing bubble and the associated abuses of consumers.  As the housing frenzy developed in 2003 and low income people got sucked in and – many of them – suckered, Ben Bernanke argued for a further lowering of interest rates on the basis of short-run macroeconomic considerations; apparently he was oblivious to the dangers that implied to consumer-as-borrowers.

As Rep. Barney Frank (D-Mass.) said at the height of the housing madness in 2007, “If I was going to list the top 87 entities in Washington in order of the history of their efforts on consumer protection, the Fed would not make it.”

What would happen if you tried to add formal protection of consumers to the top level of Fed priorities and to make it central to Bernanke’s job?

This would surely require amending the Federal Reserve Act, otherwise consumer protection would remain a second class citizen at the Fed.  The Fed is not a government department, it’s an independent entity.  If you don’t give the Fed specific legislative direction and detailed reporting requirements for a particular task, it won’t get done.

And even that may not be enough.  The Fed has plenty of powers to help consumers, but it just hasn’t used them.  The American Banker (subscription required) quotes Barney Frank on this also, “One of the greatest unused examples of power were the consumer protection powers we’ve given the Fed.”

Why? Again, Frank – as chair of the House Financial Services Committee – should know, “If you look at the Fed governors, their focus has been on the safety and soundness of the banking system, not consumers.”

The tip off here is that banks of all kinds want enforcement of consumer protection laws to stay with existing bank regulators where, John C. Dugan, Comptroller of the Currency claimed recently “it works well.” But he doesn’t mean that this arrangement protects consumers.  He means that it protects banks and the banking system – whenever necessary (like now) consumers can be squeezed to improve the banks’ bottom line.

The Federal Reserve never has and never will put consumers first.

By Simon Johnson

A slightly different version of this post originally appeared on the NYT.com’s Economix blog.  It is reproduced here with permission.  If you wish to repost this material in its entirety, please contact the New York Times. 

49 responses to “Can the Federal Reserve Protect Consumers?

  1. Yes:

    1. Just like with so many government agencies, the Fed’s responsibilities are conflicted enough as it is, and its entire culture is based on these existing responsibilities. (Or I should say on one of them in particular, keeping inflation down. Unemployment, not a big deal.)

    So even a new statutory Fed responsibility regarding consumer safety is likely to get short shrift.

    2. Again just like with most agencies, it doesn’t use the powers it already has. Again we see, consumer safety is not a concern of the culture. No nominal commission is going to change the culture.

    If you want to change the culture, you need to change the cadre.

    You will any end, you have to will the means. I see lots of attractive-sounding ends willed, but little on this same means which would be required for pretty much all of them.

    It’s the same as how we knew nothing had changed after 9/11: none of the personnel was changed.
    (By “change” I don’t mean some ad hoc firing of one guy and replacing him with another who thinks and does the same way. Sound familiar from our recent politics?)

    (In the case of the Fed, I’d go beyond the specific issue of consumer protection to the more elemental problem that the Fed is simply the biggest and failingest of the TBTF banks. It is the most bloated top layer of the entire Tower of Babel ponzi scheme. It has all the same problems of every other insolvent bank but can keep the scam running longer because it owns the printing press. But in the end it’s the same thing as Citi and BofA and in the same position, and must come to the same end.

    So our entrenched cultural problems, the fact that you can’t solve a drug problem with more of the same drug, go way beyond the Fed’s attempt to kneecap consumer protection by co-opting it.

    The problem is the unsustainablity of exponential debt itself, and therefore the Fed as such.

    When we think of how to dismantle the TBTF banks, we must think of this one above all.)

  2. Since Volker was replaced in the Eighties, the only job of the Fed has been to keep the bubble machine going. The inflation problem is solved by statistical manipulation: things people actually need to buy no longer count. The corporate prosperity depends upon companies borrowing cheaply and lending to consumers at usurious rates. Expecting the Fed to protect consumers is like hiring a goat to guard your cabbage.

  3. With all the taxpayer money that Bernanke has thrown at Wall-Street financial institutions, is it any wonder that a WSJ poll would prefer that Bernanke be reappointed. This would be “news” if the poll suggested he be replaced.

  4. In addition to mapping out relationships of people on corporate boards maybe it would be useful to map the relationships of people running the federal reserve system?

  5. The Fed is a well-regarded institution in general

    Really? Only in the D.C./Wall Street axis. The Fed is less regarded than the IRS out here among the great unwashed:

    http://news.yahoo.com/s/nm/20090728/ts_nm/us_usa_fed_gallup

    The echo chamber is going to be shattered violently if D.C. doesn’t break with the banks.

    Cheers,
    Carson

  6. With whom is Bernancke “personally popular and prestigious”? The management of the money-center banks and Democratic politicians looking toward re-election in 2010? Anyone else?

    Bernancke has continued the Greenspan policy excruciating punishment for savers. He has exceeded the the Maestro in the size of the bubble blown and the damage done to savings. We have ZIRP as far as the eye can see.

    In a position where actual job performance mattered, Bernancke would have been fired long ago. The notion that the Fed will suddenly become the protector of the citizenry when it has done everything possible to punish the citizenry for the last 10 years is an amazing leap of faith.

    The choice of the word “consumer”, rather than, say, citizen, is no accident. Consumers acquire debt which requires cregit. The Fed is all about fostering the creation of ever more credit for “consumers”. The Fed exists to stabilize and protect the money-center banks. Entrusting it to protect consumers is foolish.

  7. The best form of consumer protection is for citizens to take personal responsibility for their actions. If this Consumer Protection Act is an attempt by the administration to deflect attention from the real elephant in the room: the transfer of public wealth to Wall-Street via AIG,Goldman Sachs, and other financial institutions; the enormous powers of the Fed to increase the nation’s debt levels, the lack of commitment and failure of the administration to separate private sector risks from the public sector resulting in the continuing socialization of losses – then I believe this strategy will ultimately fail.

  8. The fed is not an agency of the federal government. It claims to be a hybrid public-private institution, but is actually more private than public. If you think in terms of transparency, it’s as top-secret as nuclear weapons research.

  9. “Bernanke is currently riding a wave of personal popularity and prestige.”

    What is the line on his reappointment? Can any of our UK readers quote us the book on this? There must be odds over there. I still think he won’t be reappointed. I don’t think it’s substantive I think it’s a power (as in separation of powers)/patronage thing.

  10. Lavrenti Beria

    OregonGuy,

    “With whom is Bernancke “personally popular and prestigious”?”

    The reference, of course, was to the big name academics turned TV personalities, who in the past have seemed able to hint at truth but who, in recent times have realized that telling it would mean the end of their notariety. Krugman, a Bernacke and Regime laydown, who learned his morality from the same elitist, PBS, university crowd that have managed to rationalize child butchery as social imperative, is the preeminent example. I would suspect that, utimately, there would be little that a weasel like Krugman wouldn’t do to please massa.

  11. It’s not a patronage thing; it’s a useful idiot thing. At different times different useful idiots are called for.

  12. “The heart of the problem here lies with the Federal Reserve Act. As it currently stands, the all-important Section 2A reads, “The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.”

    “This is what the Fed does – in practice by trying to keep unemployment down (ideally around the 4-5% mark, although that can change over time) and inflation low (no more than 2%, roughly).”

    Given the growing problem of increasing socioeconomic stratification in U. S. society,

    1) would an inflation rate of circa 5% mitigate the problem, or even reverse the trend?
    2) would it be consistent with the mandate of the Fed?

  13. “The tip off here is that banks of all kinds want enforcement of consumer protection laws to stay with existing bank regulators where, John C. Dugan, Comptroller of the Currency claimed recently “it works well.” But he doesn’t mean that this arrangement protects consumers. He means that it protects banks and the banking system”

    Can you spell CONFLICT OF INTEREST, boys and girls?

  14. I am also warry of giving the fed more power. As Simon and others have noted: 1) it’s not a public institiutions, so what mechanisms would be put in place to hold it responsible for that role?; 2)Many of the goals of consumer protection would directly oppose ensuring a highly profitable bank sector, so when push comes to shove, and tradeoffs have to be made, with whom will the fed side?; 3)The fed, and Bernanke don’t exactly have a great track record, Bernanke was still in Academia but never sounded the alarm against Greenspans actions, and Geithner was the Head of the NYC fed and did little, and there punishment, a promotion? Wouldn’t we all love to work at the fed. I dont think Bernanke or Geithner are bad people, but they view the world through wall street tinted glasses. Despite his humble upbrining, Bernanke went to all the same schools and taught many of the current Wall Street highflyers, as did Geithner, so while they may want to help, their world view is so skewed as to be useless. Perhaps we should not get the next fed governer from Wall Street or an Investment banks, just and idea.

  15. If we are to amend the Federal Reserve Act, I would much prefer to see the elimination of the unemployment mandate and an excusive focus on the maintenance of purchasing power (shades of the old Bundesbank).

    However, the problem is that whatever the nice words, the Fed (like the other agencies) will do what it wants to do, and what it wants to do is follow the finance industry consensus. It did not show a great deal of independence in the fall of 2008, because it did not want to be independent at that time.

    To give an example from a different context, on three occasions during World War II the ostensibly independent Supreme Court sanctioned discriminatory treatment against Americans of Japanese ancestry. These practices violated the plain language of the law (even the precendent set by Plessy), but the Supreme Court was hardly independent enough to buck what was seen as military necessity.

    Until the Fed finds itself in a crisis and refuses to buckle – that is, until the Fed finds itself another Paul Volker – change in written statute is unlikely to achieve much.

  16. On Simon’s recent recommendation to replace Bernanke with Geithner –

    What is Geithner’s failure to pay $35,000 in 6 year old income taxes, when he signed a contract with the IMF stating that he would? Until he was nominated as secretary of the treasury?

    Mendacity.

    What is Geithner’s failure, as the head of the NY Fed, to recognize (over the 4-5 years before the crash) billions of dollars of toxic assets accumulating on the books of the big Wall St. banks? Sitting in the middle of Wall St. for the last 4-5 years with all that authority? And failing to prevent the crash or at least warning somebody?

    Total & utter incompetence.

    And how about Geithner’s ill conceived PPIP program?

    I think his totally inept performance disqualifies Geithner for any position of authority or trust. Dog catcher, grocery bagger or garbage man? Maybe.

    I hate to say it, but I think Simon’s recommendation of Geithner is simply outrageous. Is there some capture going on here?

  17. Why is Bernanke pushing so hard against a separate CFPA. Is it simply at the insistence of his banker friends, to protect their “club” from meddling outsiders? I would think creating a CFPA, thus removing consumer protection as a Fed responsibility, would give him some cover and make reappointment more likely.

  18. The Fed. Reserve should and could help us if they would only try? Where there is a will ($$$) there’s a way. They just have to be willing to spend some of their CEO money on the little people.

  19. Simon is really recommending Geithner to replace Bernanke? Wow, rarely do we disagree, but on this one, absolutely. Geithner has shown himself either disengenous or incompetent, and captured by the monied interests. Why has no one ever thought of Robert Schiller, he spotted the last two bubbles, understands the math, and seems to strike a balance between understanding the role banks ought to play in the economy (allocating capital) and a genuine concern for income inequality. His idea (not sure if its actually his, but he did mention it) of indexing the tax rate to income inequality seemed to strke the right tone, and provide concrete incentives. While my heart tells me Stiglitz, I feel he is simply the reciprocal of Greenspan. Schiller seems like a good middle ground.

  20. Yes, I know. I was just comparing it to government agencies as far as having conflicting mandates and an anti-regulatory culture.

  21. he seems to strike a balance between understanding the role banks ought to play in the economy (allocating capital) and a genuine concern for income inequality

    I think you just answered your own question.

  22. Actually reverse capture.

  23. “The heart of the problem here lies with the Federal Reserve Act. As it currently stands, the all-important Section 2A reads, “The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.”

    NOTICE there is no mention of wages vs. prices (higher real earnings / better standard of living), debt levels, asset price levels, ability to retire, or even higher nominal wages.

    From:

    http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm

    “Therefore, the Federal Reserve can be more accurately described as “independent within the government.””

    SCARY???

  24. Lavrenti Beria

    chas,

    “I think his totally inept performance disqualifies Geithner for any position of authority or trust. Dog catcher, grocery bagger or garbage man? Maybe.”

    Now, now, there is utility in a case like Geitner’s or Summers’, albeit a utility that might not occur to one at first blush.

    When the show trials of the Regime’s leaders commence, those at the very highest levels almost certainly will be tried first. I think it is reasonable to expect that when it is Geithner’s time, he will tearfully confess to a long bill of particulars including, inter alia, how he colluded with lobbying interests to feather his own nest at the expense of the people. He then will go on to recommend that the court deal with his personal situation with the utmost severity. Why, he may even allow that while he deserves something more purely punitive for his crimes, he nevertheless would appreciate receiving the sentence of life at hard labor so as to offer him the opportunity to recompense in some small way those injured by his vile self-service. I would suspect that those appointed to sentence Geitner would see merit in such an appeal and grant him the mercy he requests. He would then join a enormous penal colony created for just his kind and populated by that time by vermin like Pelosi, Bonnior, Reed and McCain. They would likely work on “shovel ready” projects. :-)

  25. I hope nobody really believes that Geithner is actually for CFPA. And that the supposed dispute between him & Bernanke on this is anything more than more mendacity. Probably to pacify Obama.

    If you lie about $35,000 in back taxes for 6 years you’ll lie about anything.

  26. Especially if you’re a financial whiz.

  27. This issue goes far beyond the Fed itself. The “supply-side”, “free markets” (code names for rigid top-down economic ideologies of Hayek and Friedman) revolution from 1978-2008 didn’t merely coincide with the promotion of unregulated “financial innovation” (code name for gambling and fraud), and the explosive growth of all forms of credit and the financial industry itself. The political economy of this ideology equates “freedom” with suppression of collective bargaining, all forms of consumer and environmental protection, and greater rights and privileges for the wealthy (labeled “the productive element of society”). It is anti-democratic in spirit and objects to egalitarianism and consumer protection on first principles. Commencing with the election of Reagan, and continuing unabated with Clinton, the Bushes, and Obama all components of our government have participated in the reinforcement of “supply side” economics; the only difference between the Fed, Congress, and the Administration in this regard is that secrecy and favoring the wealthy (“productive”) in policymaking has always been a privilege of the Fed, while the others have only made it their open prerogative since 2000.

  28. The notion that Ben Bernanke is riding a wave of popularity and prestige is either distorted or the saddest commentary yet on the state of public discourse in the USA. Popularity should not be confused with celebrity. In this celebrity culture, admittedly, no distinction is made and that encourages the sort of ‘junk politics’ that has become our standard fare.

    Prestige is another matter. I see that a substantial majority of economist who have been polled favor his retention as head of the Fed. That is more a commentary on the self-serving judgments of a profession that has gotten just abouit everything wrong for a generation than an endorsement we whould honor. Just as the financial people have moved ruthlessly and with alacrity to recreate their self-indulgent world, so are economists moving to recreate their world of intellectual illusion – rational market theory and all. Dogma psycho-behaviorally no different than the Church’ dogma on the movement of celestial bodies. Professional comfort trumps integrity of thought and behavior.

    Back to little Ben. Bernanke has been assiduously promoting himself for the part of the ‘good German’
    in the despictable financial collapse scandal. The basically well-intentioned, decent and reasonable person caught in the coils of rather nasty goings-on. This is pure nonsense on the record. The more interesting question is why there is a widespread need to find such a person. There is something in us that resists the idea of unalloyed evil/bad in even the most disreputable institutions/governments. The yearning for redeeming individuals has reemerged.

    Ben Bernanke is the media’s (and the economists’) clear choice. Quiet, soft spoken, and outwardly deferential, he is a natural. Dr. Bernanke, Chairman of the Federal Reserve since 2006 and de facto number 2 to Greenspan on the Board of Governors earlier, he was dedicated to Maetro’s on unregulated financial markets, a true market fundamentalist, defender of financial ‘innovation.’ inattentive to the bubble economy, a participant in all the louche crisis management decisions, a black knight who as this moment is doing everything he can to block whatever reforms are still on the table, and a disparager of the ethical and greed issues central to the crisis until that attitude became politically untenable. Moreover, he tells touching stories about his mother on ’60 Minutes.’

    Grow up folks, this isn’t a fairy tale that we’re experiencing. Here’s a useful meditation technique:
    imagine in your mind’s eye Paul Volcker, see him and hear him, contemplate what he has said about our state of affairs and what he would do as Fed president. Then juxtapose him to little Ben. That’s all it takes.

  29. TYPOS CORRECTED IN THIS VERSION

    The notion that Ben Bernanke is riding a wave of popularity and prestige is either distorted or the saddest commentary yet on the state of public discourse in the USA. Popularity should not be confused with celebrity. In this celebrity culture, admittedly, no distinction is made and that encourages the sort of ‘junk politics’ that has become our standard fare.
    Prestige is another matter. I see that a substantial majority of economist who have been polled favor his retention as head of the Fed. That is more a commentary on the self-serving judgments of a profession that has gotten just abouit everything wrong for a generation than an endorsement we whould honor. Just as the financial people have moved ruthlessly and with alacrity to recreate their self-indulgent world, so are economists moving to recreate their world of intellectual illusion – rational market theory and all. Dogma that psycho-behaviorally is no different than the Church’ dogma on the movement of celestial bodies. Professional comfort trumps integrity of thought and behavior.
    Back to little Ben. Bernanke has been assiduously promoting himself for the part of the ‘good German’ in the despictable financial collapse scandal. The basically well-intentioned, decent and reasonable person caught in the coils of rather nasty goings-on. This is pure nonsense on the record. The more interesting question is why there is a widespread need to find such a person. There is something in us that resists the idea of unalloyed evil/bad in even the most disreputable institutions/governments. The yearning for redeeming individuals has reemerged.
    Ben Bernanke is the media’s (and the economists’) clear choice. Quiet, soft spoken, and outwardly deferential, he is a natural. Moreover, he tells touching stories about his mother on ’60 Minutes.’ The real Dr. Bernanke, Chairman of the Federal Reserve since 2006 and de facto number 2 to Greenspan on the Board of Governors earlier, he was dedicated to Maetro’s line on unregulated financial markets, a true market fundamentalist, defender of financial ‘innovation.’ inattentive to the bubble economy, a participant in all the louche crisis management decisions, a black knight who as this moment is doing everything he can to block whatever reforms are still on the table, and a disparager of the ethical and greed issues central to the crisis until that attitude became politically untenable.
    Grow up folks, this isn’t a fairy tale that we’re experiencing. Here’s a useful meditation technique: imagine in your mind’s eye Paul Volcker, see him and hear him, contemplate what he has said about our state of affairs and what he would do as Fed president. Then juxtapose him to little Ben. That’s all it takes.
    Michael Brenner
    August 13, 2009 at 6:39 pm

  30. Give me freedom from debt and real hourly earnings growth!

  31. EDIT:

    Give me real hourly earnings growth and freedom from debt!!!!

  32. Sorry I’m so slow on the uptake, but I just steam vacuumed my carpets, took a walk around the park & did a light weight workout so hopefully I’m awake now.

    Further to – “I hope nobody really believes that Geithner is really for CFPA.” —

    Of course the question then is, why is Geithner pacifying Obama by claiming he’s for CFPA? Because Obama is the guy who picks the next Fed Chairman. Pretty slick huh?

    And just think. When Geithner gets to be FC he’s his own boss. He runs the economy by himself. He no longer answers to Congress or the President who has to answer to the taxpayers-voters and the millions of unemployed & under employed Americans (and their families & friends). If he wants to get reelected that is.

    So all Geithner has to do is keep printing free money for a few stupid, greedy bankers who are in the process of shutting the US economy down (maybe they already have). That’s why they’re stupid.

    And after he retires as FC he has that cushy multimillion or billion dollar “position” waiting for him his banker friends are holding just for him.

    I don’t know what he’s going to buy with all that money because nobody will be producing anything because he & the bankers will have all the money & everybody else will be unemployed.

    Of course there’s a lot more minutiae, like what happens if as FC Geithner has to deal with CFPA. Of course he knows the bankers will kill it. And is Bernanke complicit in this? Etc.

    Isn’t that a whole lot slicker than trying to cheat the IRS out of $35,000? And it’s legal.

  33. An afterword re. my harsh comments about the economics profession. This phenomenon is not pecilar to them. I’ve been professionally part of the social sciences for 4o years. It is self-evident that part of us all – individually and in terms of collective identification – are ‘guildists,’ if not tribalists. Ben Bernanke is the embodiemnt of the professional economist engaged in public life. Don’t underestimate the degree of empathy. His exaltation is exaltation for all in the economics professional to some varying extent; his redemptiopn is theirs, too. Is it really the objective judgment of most detached economists that Ben bernanke is tone man in the USA best qualified to be Fed President? Even if we grade on a curve?

    By the way, Paul Volcker was a visiting Professor of economics at Princeton back in the mid-1970s on a visiting basis. Either his stay was too short for full culturalization in the disciple or had more indepenence of mind and spirit.

  34. Correct me if I’m wrong, but don’t you get appointed professor of economics at ______ (insert name of prestige University here), by towing the corporate line?

  35. (no offence intended to the people writing this blog)

  36. I know. Sucks huh?

  37. I agree, and vote for Elizabeth Warren to be in charge of consumer protection. Boy would she be great.

    Don’t get me wrong, but Ben Bernanke has his hand full always, and there is no reason to create additional pressures to take action with potential negative ramifications vis-a-vis your central mission. DO NO PUT THE FED IN CHARGE OF CONSUMER PROTECTION, PERIOD!!!!!

  38. Here’s my problem with this idea—all of the current “oversight” and “protection” failed to catch Bernie Madoff, and it seem to have failed just about everywhere it was needed during this last meltdown. We still have yet to get any official probes of the SECs failures during this debacle—and now we have people promoting yet again another “gov’ment” agency to “hep us”.

    So, presumably this Agency would add another 10-20,000 lawyers (complete with pensions) to the Federal Payroll. But what would this bunch of lawyers do? There are a lot of buzzwords in the wind here .. like “financial products”, “financial innovation” and “unfair practices”.. but often there isn’t much “there” “there” in the language chosen to describe the problem.

    What exactly will the employees of the Consumer Protection Agency do that will make our lives better? And what is that they can do that Congress can’t?

  39. No, it is much more subtle than that. Corruption is multiform – and not always financial.

  40. I agree. He believes in the Ponzi Scheme and is working to put it back into place.

  41. do I understand correctly that an American Bank customer is not told the actual percentage cost of his loan as compared to the nominal? Here is an offer from a major German online bank for loans that are meant for those who want more than their much more expensive overdrafts.

    https://www.ing-diba.de/kundenservice/produkte/gesamtangebot/#jumpkr

    I checked their American site http://www.ing-usa.com/us/index.htm and could not find an equally prominently displayed link for loans, I surfed around a bit and still have found nothing except a site that seems overall to be a lot more confusing and containing high-flown praise advertising language than the German site does
    The first impression is that for an American it is as complicated taken care of your bank account as it is for me understanding the ifs and whens and hows of our offers for mobile phone contracts.

  42. ooops – sorry misplaced – intended it to be not an answer but a general comment

  43. you would have to include club memberships – the more you go after their official ties the more they do it in the spas – ooops I meant to say conferences of course – sorry but I just can’t imagine the guys having merry drink-together in the evenings
    (and that’s one reason why they are still mostly guys, women in average can’t hold their drinks as well)

  44. Bernanke has been assiduously promoting himself for the part of the ‘good German’

    actually there were some (very few) but a lot, I mean really a lot, who could acquire that label after the war claimed to have been in “inner emigration” during the more than 12 years of the 1000-year-Reich
    - all of your objections to Geithner & Bernanke up to here reminded me of that “narrative” – they have been in inner emigration and only now with their present position of power can they come into their own, prove their worth etc.
    - at the same time while reading I was reminded of the Peter-Principle, remember? everybody gets promoted until he reaches his level of incompetence therefore I hope for all of us, that B&G are not there yet

  45. the link on your name doesn’t work

  46. Is it time to relinquish anye assumption that somewhere, somehow, someone with adequate power to positively affect the plight of citizens, really wants to make their lives better? Is the absence of such a person, power or framework the vaccum which has to be recognized and declared before a remedy can be sought or created?

  47. Anybody seen this? Debt repudiation. Man, this took a lot of courage. Just think what’s going to happen when the banks, Bernanke, Geithner, Summers & Krugam, et al get a hold of this. They’re going to scream to high heaven. A lot of hot air & bluster coming up.

    But, does this include all loans or just mortgages? Seems like all we need is to get this around the blogosphere, then set a date. Could this be the beginning of the end of the plutocracy? Sounds like a good start.

    Wonder what Simon & James think about debt repudiation?

    http://www.counterpunch.org/auerback08142009.html

  48. Tell that to Carla Hills!

    http://www.cfr.org/bios/3373/carla_a_hills.html

    http://www.theglobalist.com/AuthorBiography.aspx?AuthorId=26

    This is interesting — “she was a partner at Munger, Tolles, Hills, and Rickershauser of Los Angeles” So was her husband Rod. Rod was SEC Chairman from 75-77. Munger is Charley Munger, Warren Buffett’s partner. These people are ancient, but apparently still causing us grief.

    http://en.wikipedia.org/wiki/Carla_Anderson_Hills

    (And to Madeleine Albright too http://en.wikipedia.org/wiki/Madeleine_Albright)

  49. nothing to cause grief in families like the ancients

    in the remote village of about 300 I lived in they would spout the most appalling stuff about their families as long as they still managed to go outside

    and of course it should read that I can imagine them drinking not that I can’t – there are women who have the right to attend and also some who can against all nature’s odds hold their drinks well, but what do they do when the guys move to the brothel? and I can’t imagine that the Icelanders have not had one or several brothels ready for such illustrious visitors. But maybe the brothels have adapted and accomodate conference attending women now also one way or another