The Republicrat Washington establishment, having loosed Wall Street in recent years to ravage the global economy, now wants the authority to take over and/or shut down all types of financial institutions.
Officials say if they had authority to shut non-bank firms, the collapse of Lehman Brothers, which touched off the most virulent phase of the credit crisis, could have been avoided.
“Officials” are full of it.
If Lehman Brothers and other investment banks hadn’t been freed by the SEC in 2004 to take on 30 or 40 times more debt than capital, instead of the 12-to-1 ratio previously enforced, its collapse might have been avoided.
It’s no surprise that Goldman Sachs, which benefited from the rule change, was headed up at that time by Henry Paulson. Paulson, of course, later became the Secretary of the Treasury who proposed the “give us all your money” plan to bail out Wall Street when those unsustainable debt/capital pyramids caved in.
As with gun laws, the government doesn’t need more authority; it needs to enforce the rules on the books — and not allow them to be rewritten by those who stand to profit.