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Posts tagged Transparency

Friday Lazy Linking

One-way mirror

(Quote thanks to Sheldon Richman 2009-04-10: Bad Regulation Drives Out Good.)

Here is Senator Charles Schumer (D-NY) — who informs us that in conflicts between Wall Street and Main Street, he sides with Main Street and always has — expounding on the governing party’s new notion of transparency in hyperregulatory bailout capitalism:

We are working on major financial reform…. You're gonna find a different system of regulation. The real problem—and this is government's fault ...—when the financial world changed, the system of regulation didn't.... That will change. There will be a strong, quiet, hopefully more unified federal regulator.... And he's gonna be tough–or she. But they're gonna be quiet. So like when Bear Stearns began to run into trouble, they're gonna call the heads of Bear Stearns in and say, All right fellas, you're getting rid of those two hedge funds; you're gonna raise more capital—even if means you have lower profitability. We're not gonna tell anyone you're doing this, but you do it or we're gonna take sanctions against you. ... You don’t need a lot of voices, yelling, because that just weakens the institution. You need a tough, strong regulator, unified—no holes in the system— ... who ... sees the problem ahead of time, so they have complete transparency, they know exactly what's going on ... and they come in and say straighten up even if your ... profitability is lower and your stock has to go down.

— Senator Charles Schumer (D-NY), Morning Joe (2009-04-06), MSNBC. Transcript available.

Normally, in politics, transparency is used to refer to norms and processes that allow ordinary people to find out what government or other large institutions are doing with their money or how those institutions are making the decisions that affect their lives. For Charles Schumer, transparency in government regulatory agencies apparently means that government regulators will have complete access to information about everybody else’s business — and will call in the heads of large financial institutions to a secret meeting, behind closed doors, where they will make secret decisions, behind closed doors, which they will force on institutions whose decisions affect millions of people, which will be forced to comply with special requirements and subsidized with special government deals, which both the government and those institutions will deliberately conceal from the public, with the explicit purpose of preserving the economic status quo, and frustrating any effort by ordinary folks to find out what the hell the government is doing on their dime and supposedly in their names. Under Schumerian transparency, government regulators will know everything about what’s going on, and they will conspire with big bankers to make sure that you know nothing.

For Schumer, transparency is a one-way mirror — like the kind you see on TV cop shows. Guess which side the prisoner is on.

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