Sanders Amendment To Financial Reform Bill Passes Easily

An amendment to increase the transparency through which the Federal Reserve (Fed) operates passed on Tuesday by a vote of 96-0.

The measure, sponsored by Sen. Bernie Sanders (I-Vt.), would require the Government Accountability Office (GAO) to conduct a one-time audit of the powerful central banking agency, going back to December 1, 2007. At a press conference with reporters immediately following the vote, Sanders praised his colleagues for their unanimous support.

"What just transpired is an historic vote for the American people in terms of finally bringing transparency to what is perhaps the most powerful federal agency, and that is the Fed," he said.

A similar amendment that would've required the GAO to conduct a far more wide-ranging audit, and would've made such audits recurring, failed by a vote of 62-37. The measure was the product of Sanders's initial, less watered-down effort to shine more light on the Fed, mirrored after a proposal put forth by Reps. Ron Paul (R-Texas) and Alan Grayson (D-Fla.) that passed the House last year.

After Sanders modified his amendment, Sen. David Vitter (R-La.) re-introduced the original version.

Treasury Secretary Geithner: Tax On Big Institutions Will Offset TARP Costs

By Justine Rellosa- Talk Radio News Service

Treasury Secretary Tim Geithner cast levying a tax on large financial institutions as a significant step in offsetting the costs incurred through the Troubled Assets Relief Program (TARP).

“This was an expensive financial crisis. It caused a lot of damage to our long term fiscal position,” Geithner said Tuesday during his testimony before the Senate Finance Committee.

Geithner explained that the affected firms are made up of those that have over $50 billion in assets and are eligible for emergency assistance programs.

“We thought the fairest way to do this was to apply the fee to the firms that contributed the most to the crisis.”

The tax will be collected throughout the decade and ultimately seeks to gather $90 billion.

Greenspan Downplays Fed's Role In Subprime Mortgage Crisis

By Justine Rellosa-Talk Radio News Service

Former Federal Reserve Chairman Alan Greenspan conceded Wednesday morning before a hearing with the Financial Crisis Inquiry Commission (FCIC) that he had made mistakes throughout his career, but denied that the Federal Reserve Board played a significant hand in the subprime mortgage crisis.

“Remember that the Federal Reserve Board is a rule making [agency], it is not an enforcement agency," said Greenspan, who served as chairman from 1987-2006. "We did not have the capacity to implement the types of enforcement that the FDIC, [Housing and Urban Development and the Department of Justice] has."

Greenspan explained that external factors played more of a role in the collapse of the housing market than the subprime mortgages themselves.

"Origination of subprime mortgages - as opposed to the rise in global demand for securitized mortgage interests - was not a significant cause of the financial crisis," said Greenspan.

Noted the 84 year old Greenspan, “I was right 70% of the time, but I was wrong 30% of the time. There are an awful lot of mistakes in 21 years.”

Greenspan declined to speculate on what he could have done differently.

"Figuring out what you should have done differently is a really futile activity because you can’t...in the real world, do it."

An Unsustainable American Lifestyle

I have spent the last week traveling through two similar, yet very different countries. After leaving southern Sudan, I traveled to Bhutan and India. Bhutan is a kingdom that has just transitioned into a democracy. It is a small country of 750,000 people, about the size of Switzerland. India is the sub-continent that will most likely surpass China in population. Currently, about 1.3 billion people live in India. I travel to understand the world better and to get other cultures' perspectives on the United States.

Bhutan was a closed community, and until fairly recently the only way to see it was by invitation. It is slowly joining the modern world. In 2000, its government began allowing television to be broadcast in the country. The fourth king of Bhutan abdicated in favor of his son so that the country could transition from an absolute monarchy to a constitutional monarchy. Bhutan is a member of the United Nations, but, in an attempt to keep from angering China, it has chosen not to have ambassadorial exchange with any of the permanent members of the U.N. Security Council.

My junior high school geography teacher was way ahead of the author of "Guns, Germs and Steel," as he was a firm believer that geography was destiny. He was certainly right when it comes to India and Bhutan. As our guide led us to a beautiful view of exquisite mountains, he pointed out that the tallest of the mountains was what separated Bhutan from Tibet. Tibet was taken over by China in the late 1940s and the Dalai Lama escaped from Tibet in 1959. One glimpse of the beautiful mountains and it is clear that Bhutan could be overrun in a nanosecond.

Bhutan rests between China and India. It is to India's advantage to protect Bhutan, which is why the Indian army patrols the border between China and Bhutan. America does a ton of business with China, but between its human rights record, its Taiwan issue and its refusal to let the Tibetan people rule their own country, the Chinese are not exactly the most popular people in Bhutan and India.

Most of the folks I spoke with in both countries have the same views as people in the United States. They watch American television on their satellite dishes, and they see the same news we see at the same time we see it. When news broke last week of the shootings at Fort Hood, the people in Bhutan and India got the news as people in the U.S. did. Even the Indian language stations were showing video instantaneously. Same view, same pictures, but very different views on what needs to happen for the world to improve.

Russia's leader, Vladimir Putin, does not concern them. India trades with Russia and has a good relationship with them. China, on the other hand, is a different story. Most people who engaged in conversation with me had dire warnings for the United States, and they all said roughly the same thing:

1) Get your debt down. All were aware that the sizable debt that the United States has taken on has compromised our policy objectives. It is hard to take on China on Tibet or human rights when America is owned by China to the tune of at least $1 trillion. The Federal Reserve chairman's advice for healing the U.S. economy is to make more consumers out of the Chinese. If that is the solution for solving our job crisis, then maybe I should teach economics. It is scary to me that this is what our leadership thinks will pull us out of the current mess. Moreover, it is not going to happen at a fast enough rate to change our balance of trade and reverse our economy.

2) Stop your consumption of oil. India gets hydropower from Bhutan and is looking to solar and other alternatives. Oil makes the U.S. dependent on Middle East countries, and the people I talked to view such dependency as fueling not just Americans' cars, but terrorism in their region of the world. One Indian businessman I spoke with said our reliance on foreign oil was the reason for us getting involved in "silly wars that kill American young people."

3) Conserve your resources. With the burgeoning world population needing food and water as well as energy, America is viewed as being wasteful. With manufacturing jobs leaving the United States for poorer countries, most people I talked with saw the U.S. as a nation of spendthrifts who will use up more than our fair share of the world's resources, in the process going bankrupt.

4) Don't rely on one country to do your manufacturing. China has the United States' head in a vise, but if American companies spread manufacturing to 20 or more countries around the globe, China would not have the power to control currency and the economic future of the United States.

The bottom line, as one businessman said to me, is America is expecting to live the lifestyle we have grown accustomed to by writing IOUs. But, he added, such a lifestyle will prove to be unsustainable.

I couldn't have said it better myself.

Financial Leaders Applaud Administration's Regulatory Reform Efforts

By Courtney Ann Jackson-Talk Radio News Service

Financial industry leaders were in agreement Friday that the Obama administration’s proposed financial regulatory reform is necessary, noting that the reform will renovate and strengthen the financial marketplace and many of its regulations. During a Committee on Financial Services hearing Friday, many of the panelists applauded the administration’s proposal.

“We fully support the Administration’s five key principles for strengthening consumer protection-transparency, simplicity, fairness, accountability, and access-and we are pleased to see the Chairman carry these principles forward as he works to fill the regulatory gaps to protect consumers,” said Diahann Lassus on behalf of the Financial Planning Coalition.

Other panelists highlighted the administration’s “diagnosis of the deficiencies” of the current financial framework. They said it is outdated and some aspects have led to confusion and inefficiencies for years now.

Regulations received much attention with panelist Robert Nicholas, President and COO of Financial Services Forum, saying the framework as it currently stands, “undermines regulators’ ability to ensure institutional and systemic safety and soundness-helping to create the opportunity for, and exacerbating, the current financial crisis.”

Committee member Rep. Paul Kanjorski (D-Pa.) noted a survey by ShareOwners.org that sites 58 percent of investors are now "less confident in the fairness of the financial markets" than they were one year ago. He noted that a major reason for the lack of confidence is due to the failure of regulators.

"We must enact strong new laws," said Kanjorski.