Reforming Monetary And Financial Regulatory Institutions

By Chandrashekar (Chandra) Tamirisa, (On Twitter) @c_tamirisa

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Today’s press conference by President Barack Obama about the economy, suggests that the White House has lost confidence in the Federal Reserve as an institution whose responsibility it is to recover the US economy in a self-sustaining (meaning, technically Solovian steady-state non-excessive inflationary growth rate at any given interest rate of money supply) and timely manner, especially when the law provides all the authority and the tools to make that happen in the interest of the general welfare of the country.

Presumptive Republican nominee for president in 2012, Mitt Romney, has already called for Ben Bernanke to be replaced.

Republican primary candidate Dr Ron Paul whose responsibility it was to oversee the Federal Reserve in the United States House of Representatives had written a book asking for the Fed to be ended as a separate institutional entity because of its irresponsibility in dispensing fiat money, except under Paul Volcker’s leadership. His clarion call, which provoked protests outside the Fed from his supporters is, in fact, timely – close to 100 years after the institution was founded by president Woodrow Wilson and the Congress in 1913.

The recent financial regulatory reform law requires institutional flesh to be implemented first, though the law itself may need some further changes to be more effective in the world of new finance – innovations meant to circumvent government regulations since the Great Depression in 1929 but flexible in providing capital, one would hope, in a manner that will serve the people’s interests sustainably after the financial crises since 1992 have culminated in the ongoing global economic collapse, engendering serious loss of confidence in open markets and open societies.

The required institutional restructuring will require monetary policy to be merged with the US Treasury after abrogating the Federal Reserve Act and its amendments since 1913 and constrained by legislated rules for maintaining price stability through the implementation of a numerical inflation targeting range to ensure monetary policy independence within the executive branch in a manner that is accountable to the Congress and the people, similar to other executive branch agencies.

An Undersecretary of Monetary Affairs reporting to the Secretary of Treasury of the United States should be held accountable for monetary policy after the institutional reform.

The reconstituted Treasury Department will be responsible only for monetary and fiscal policies, accountability to the Congress and the people held in the Undersecretaries of Monetary and Fiscal policies reporting to the Secretary of the Treasury who in turn reports to the president of the United States, and all of whom can be called upon by the United States Congress and the people at any time of their choosing to explain the economic health of the country.

International Economic Policy must be moved to the Department of State from the Department of The Treasury to work with other nations on the boards of the International Monetary Fund (IMF) and The World Bank.

Financial markets supervision and markets’ regulation by the Securities and Exchange Commission (SEC), the Commodities and Futures Trading Commission (CFTC) and any other regulatory agency pertaining to the financial markets such as the Federal Deposit Insurance Corporation (FDIC), Office of Comptroller of Currency (OCC) and others for all financial instruments must be consolidated with consumer protection as a separate executive branch agency.


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One Response to Reforming Monetary And Financial Regulatory Institutions

  1. Chandrashekar Tamirisa in response to Paul Lewis on Linkedin in discussion with a few edits for language:

    The dollar fell in value by 2800% in 220 years or an average of 12% a year. Meaning, US dollar experienced inflation of 12% a year on average beginning in 1792, not 89.5% in the 220 years (I wish), assuming that the changes in supply and demand of silver for reasons of financial and technical innovations are a part of the changing market structure over time to maintain as stable a price level as is feasible.

    The first 119 years experienced about 556% inflation or 4.67% average annual inflation, despite the Revolutionary War, War of 1812, and the Civil war, through the Industrial Revolution, including coal, oil, rail and autos. This is the genius of Alexander Hamilton (1789, Founding Father and the First Secretary of the Treasury of the United States, US Department of the Treasury): basic enlightenment values of a balanced check book without borrowing.

    The following 100 years since 1913 experienced 2,224% inflation or an average of 22.24% per year.

    The dollar had to be reissued 28 times since 1792, and only about 6 times between 1792 and 1912, a period of maximum liberty when the country was a laissez-faire state, closely adhering to The Federalist Papers (my lobbying business model,, with an addition which I will not go into) authored by Alexander Hamilton, fourth president James Madison and first Chief Justice John Jay.

    The founding fathers were men who could reason in dialog through persuasion to come to a consensus (common ground) even though they had deep disagreements on issues.

 All the business tycoons from Vanderbilt to Henry Ford, Rockefeller, Edison and J.P. Morgan, AT&T, IBM, Caterpillar, Microsoft, Apple, Oracle, Twitter, myself, had/have the same values: invest to make something of value to create a market, give jobs, pay a living wage to be able to buy what workers make to create demand (Adam Smith and Say’s law of Jean-Baptiste Say not John Maynard Keynes).

    Founding Fathers are of lore, not contemporaneous Americans unless you count a few people such as me, and few others who are mostly on the Supreme Court of the United States, Herbert Hoover the mining engineer-turned-politician who was destroyed by FDR in the run up to October 29, 1929 (Great Depression was orchestrated by the Democrats from within Wall Street including Joe Kennedy Sr., JFK’s father. JFK did not play his father’s game and got shot because he was Catholic), Ronald Reagan, Ron Paul, and Robert Shiller of Yale Business School. Greenspan has been corrupted by Clinton.

    Today, people like me are persecuted in the United States.

    American productivity has gone down since the Fed was created. Why? Money for nothing and chicks for free under the Buttonwood Tree (rhymes) – I mean the Fed (b. 1913) screwed up Wall Street (b. 1792), while also recognizing that the award of the British title Knight Commander of the British Empire (KBE) to Americans began in 1917, the year America entered the war (World War I began in 1914, exactly 100 years after the end of the War of 1812) to obligate allegiance to the crown, in subversion of 1776 and that the United Kingdom supported the Confederacy in the Civil War from 1861 to 1865 against Lincoln’s Union Army.

    The Democrats mismanaged the economy from 1913-now, after the Fed was created as a public (7/19 Federal Open Market Committee, FOMC, members, all federal government political appointees) and private (12/19 FOMC members with 1/3 vote for the federal government and 2/3rds for the regional businesses) by Woodrow Wilson. Most Democrats are from the American south. Daniel Duckworth provided me with data in the other discussion in response to a query of mine about inflation during the Civil War which clearly shows that the south experienced the most inflation after Fort Sumter, South Carolina where the first shots of the war were fired by the southern Confederate army against the north.

    China is rising at 4% inflation and 4% unemployment with its own monolithic political structure, American capitalist value of investing fiat money (debt of zero order) in real things domestically (not in higher orders of debt) and British imperialism in trade policy.

    Where is the Fed’s head? In the sand (or up its a*** in San Francisco’s Bohemian Club and at Bilderberg royal gatherings orchestrated out of Amsterdam and Brussels)?

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