By James Kwak
The National Association for Business Economics does a semi-annual Economic Policy Survey of its members, who are primarily private-sector economists. The March 2010 survey isn’t up on their site yet, but this is what it has to say about the Consumer Financial Protection Agency:
“A key point of discussion in Congressional deliberations on financial services regulatory reform has been the establishment of an independent agency focused on consumer financial protection. Fifty-four percent of survey respondents feel that creating such an agency would not impair safety and soundness regulation; 25 percent believed it would be detrimental. On a related issue, 43 percent of respondents indicate that a consumer financial protection agency would not impair access to credit while 39 percent believed it would.”
The financial sector has been demanding that any new consumer protection agency be made subservient to the traditional safety and soundness regulators, and has also been threatening that greater regulation will make credit harder to come by. Apparently the business community–a group that is pretty skeptical about government, judging by some of the other survey responses–isn’t buying it.
The Baseline Scenario 
The The National Association for Business Economics wrote:
“A key point of discussion in Congressional deliberations on financial services regulatory reform has been the establishment of an independent agency focused on consumer financial protection. Fifty-four percent of survey respondents feel that creating such an agency would not impair safety and soundness regulation; 25 percent believed it would be detrimental. On a related issue, 43 percent of respondents indicate that a consumer financial protection agency would not impair access to credit while 39 percent believed it would.”
03/10/10 02:18 PM | AP – excerpt
NEW YORK — “Connecticut’s attorney general sued Moody’s Investors Service and Standard & Poor’s over ratings the agencies issued on risky investments. In the civil lawsuit filed Wednesday, Attorney General Richard Blumenthal alleged Moody’s and S&P knowingly assigned false ratings to complex investments that pushed the country into recession.
“Moody’s and S&P violated public trust – resulting in many investors purchasing securities that contained far more risk than anticipated and that have ultimately proven to be nearly worthless,” Blumenthal said.
The attorney general called the ratings process “deceptive and misleading” during a news conference. He said lucrative fees Moody’s and S&P received for rating the investments affected their objectivity in rating the debt. Companies issuing the investments paid Moody’s and S&P to rate it.”
http://tinyurl.com/yhckbfn
The very fact that those questions have such parameters proves that enfolding a CFPA in the Fed is the same things as dumping it completely.
In principle the idea of consumer protection, and more broadly the public interest as such, is antipodal to the Fed’s antisocial pseudo-principles.
From there we must conclude yet again, as from a hundred other trains of reason and morality, that we need to abolish the Fed altogether.
I want to vomit when I read this crap. everyone knows these are talking points reasoning that has worked in the past and allow those in congress to thwart the will of the american people. It’s always the sma estory, andything that has the potential to lower their income will hurt the average american.
I find it extremetly frustrating that both Mr. Johnson and Mr. Kwak spend so much time saying what we know isn’t true, in fact isn’t true. Perhaps some of your efforts would be better spent exposing the tired logic of the fraud to lawmakers. that it’s always the same load of BS argument.
I worked in a hospital, and everyone knows with any organization there are code words you use to get what you want. “quality of care, safety, etc. In financie it is cons t of capital, which too cheap capital is the cause of the problem. Not the solution.
We know the system is rigged, the quiet coup by Mr. Johnson shows he knows it. Yet neither you nor Mr. Johnson will say so on this site. WHY?
This is in fact the worst lie you can perpetuate. When you try to use legitimate reason all the time to contradict phoney arguments it makes the other side appear legitimate. Better to say it like it is, outright fraud.
You see the left make this mistake over and over. with evolution (darwinism, climate change) etc. By rationalizing the irrational/fraud youmake it a valid talking point.
Those in congress alread know that what the financial industry is telling them isn’t true (at least I hope they are smart enough to know it). the reall issue is does the industry provide enough “evidence” so I can give them my bought vote with cover. The industry knows this cost of cpital arguement works by the play book, hence it has become the standard mantra.
The reality is this type of post make the process appear legit, when in fact it has no legitimacy. The process is fraudulent. So start point that out.
By the way, the readers of this blog already know, so what audience are you now reaching. You need to get to the audience in middle america that doesn’t know of this site. etc. that has to rely on the local media or fox.
How about adding petitions to sign on the site. I get thing from american for finanicial reform to sign or send. Stop talking, and use the postition you have earned to try and galvanize people and help us to find places we can direct our efforts. after a certain time talk becomes cheap. time for a bit of action from the “baseline”
for instance help with huffington’s move your money campaign.
DCB wrote:
“The reality is this type of post make the process appear legit, when in fact it has no legitimacy. The process is fraudulent. So start point that out.”
Reality is self-evident to many, others will have to develop broader shoulders, because nothing is going to lighten their load better than self-education. In other words…(we’ve)”ferried the wounded souls across the river of dread to a point where hope is dimly visible, and (now we must) stop the boat, shove them in the water and make them swim.” Start swimming.
With the trillions in losses created by relaxed lending standards and loose credit, why would anyone object to less credit in the system?
The problem is too much credit so any solution will reduce the amount of credit available. Providing credit has become so lucrative in America, especially when you could offload the risk, that everyone got into the game. The product was oversold to the point that it became the raison d’etre of the country – spending. Not an easy mindset to change. Worse, in order for the economy to survive the change the change must be gradual – an abrupt and continuing loss of consumer spending would be fatal. The goal should be a gradual change that slowly pushes lenders out of the market. You could do that by ratcheting down the costs of credit. Begin with the transaction cost – gradually (over 5 years) lower it to 0.2% (like it is in Australia). At the same time, lower the maximum interest rate charged – gradually (over 10 years) to say 15%. That should slowly reduce supply and slowly reduce the footprint of consumer finance in the US economy and hence its position as one of the puppet masters of the US congress.
Of course the real business community isn’t buying this – they can’t get the credit they need – hence the continuation of the Recession. Sadly, general business won’t be able to lobby on this, because the U.S. Chamber of Commerce is now a financial and insurance industry shill.
The consumer products safety commission (when it is properly functioning), impairs the ability of consumers to obtain products which might kill them or their children. Of course in doing so it curtails the freedom of both the slimy seller of these products and the unwitting or foolish consumer.
The CFPA should do precisely the same thing involving financial products. And yes this would impair access to credit, for those who can’t afford it or manage it. This is precisely the point.
Realistically, enactment and empowerment of a strong CFPA, with its own authority to go against those who violate its dictates, will only harm banks (and non-standard banking entities) to the extent that they won’t be able to “game” their customers. I believe that this levels the playing field, and that, forced to act honestly and responsibly, those firms with a strong moral position and business model will succeed greatly, while the flim-flammers will lose what they have built by obfiscatory practices. The result will probably be no net gain or loss in credit availability, or banking volume, and will result in detering, to some extent, the reforming of a new bubble, at least in the credit/lending area. In fact it will actually have a great positive impact on derivatives created from debt that is fairly established under the new rules of the road, and will make future collapses of the kind just experienced, far less likely.
axxicl Aug 07, 2009 4:58 PM
welcome to —————–www.goladymall.com Wholesale and retail all kinds of world brand shoes,jeans,t-shirts,bikini,beach pants,handbags,wallets,sunglasses,belt,caps,watches etc.. Free shipping!free return!lowest price! No any extra cost!
axxicl Aug 07, 2009 4:58 PM
welcome to —————–www.goladymall.com Wholesale and retail all kinds of world brand shoes,jeans,t-shirts,bikini,beach pants,handbags,wallets,sunglasses,belt,caps,watches etc.. Free shipping!free return!lowest price! No any extra cost!sdfsdf