{"id":14165,"date":"2013-08-23T12:43:13","date_gmt":"2013-08-23T16:43:13","guid":{"rendered":"http:\/\/ssgreenberg.name\/PoliticsBlog\/?p=14165"},"modified":"2013-08-23T12:43:13","modified_gmt":"2013-08-23T16:43:13","slug":"bhide-pick-a-boring-fed-chair-because-supervision-is-the-key-and-it-requires-dullness","status":"publish","type":"post","link":"https:\/\/ssgreenberg.name\/PoliticsBlog\/2013\/08\/23\/bhide-pick-a-boring-fed-chair-because-supervision-is-the-key-and-it-requires-dullness\/","title":{"rendered":"Bhide: Pick a \u201cBoring\u201d Fed Chair because Supervision is the Key and it requires \u201cDullness\u201d"},"content":{"rendered":"

William Black has written the piece Bhide: Pick a \u201cBoring\u201d Fed Chair because Supervision is the Key and it requires \u201cDullness\u201d<\/strong><\/em><\/a>.\u00a0 There is a lot in the article that is obviously based on his own experiences as a regulator.<\/p>\n

Bhide has just witnessed the greatest spree of elite looting in history, but somehow missed it entirely.\u00a0 Had Greenspan and Bernanke understood that deregulation was \u201cbound to produce looting\u201d and given the \u201cregulators in the field\u201d their full support there would have been no financial crisis.\u00a0 Greenspan did not muster even \u201clukewarm support\u201d for the Fed\u2019s supervisors \u2013 he attacked them savagely for daring to criticize the banks that were large control frauds.\u00a0 Bernanke appointed two economists as his top (anti) supervisor to ensure he would not suffer their practice of speaking truth to power.\u00a0 A Fed Chair who made it her mission to restore effective supervision would not choose \u201cboring\u201d, \u201cdull,\u201d or \u201cbureaucratic\u201d people.\u00a0 She would be putting a giant bull\u2019s-eye on her back and would ensure that she never have another boring day.<\/p><\/blockquote>\n

I wonder how\u00a0 hard the American people need to be hit upside the head with the evidence of this obvious plundering by the elite bankers of this country before they insist on reform.\u00a0 There is no reason why Elizabeth Warren should be so alone in her insistence on fixing the problem.<\/p>\n

I have also often mentioned this point brought out by Black’s article:<\/p>\n

Control fraud begat additional control fraud and created the perverse incentives that spread \u201cecho\u201d epidemics of control fraud through other professions (loan brokers, appraisers, and auditors) by creating a \u201cGresham\u2019s\u201d dynamic in which bad ethics tends to drive good ethics out of the markets and professions.<\/p><\/blockquote>\n

I observed this at the time of the dot com bubble.\u00a0 Year after year people were making money hand over fist with ridiculous investments in these enterprises which were almost certain to fail.\u00a0 The mutual fund managers who only made their customers 12% per year gains by making prudent investments were drummed out of the business because they weren’t making 90% returns like their colleagues who were willing to throw caution to the winds.\u00a0 I wanted to invest with the cautious mutual funds, but they were disappearing right before my eyes.\u00a0 Fortunately for me there were enough cautions mutual funds left to keep me protected from the dot com\u00a0 bubble.<\/p>\n","protected":false},"excerpt":{"rendered":"

William Black has written the piece Bhide: Pick a \u201cBoring\u201d Fed Chair because Supervision is the Key and it requires \u201cDullness\u201d.\u00a0 There is a lot in the article that is obviously based on his own experiences as a regulator. Bhide has just witnessed the greatest spree of elite looting in history, but somehow missed it […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[166],"tags":[],"class_list":{"0":"post-14165","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-stevegsposts","7":"czr-hentry"},"_links":{"self":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/14165","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/comments?post=14165"}],"version-history":[{"count":1,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/14165\/revisions"}],"predecessor-version":[{"id":14166,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/14165\/revisions\/14166"}],"wp:attachment":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/media?parent=14165"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/categories?post=14165"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/tags?post=14165"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}