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The Comedy of John Boehner’s “Plan B”

45 | By Shah Gilani

I am laughing right now, really.

Not because the market opened down more than 1% this morning; that’s only funny if you’re short (okay, I’m laughing a little).

And not because we’re all still here; it is 12-21-12, you know!

I am laughing at what happened last night. I am laughing that House Speaker John Boehner’s “Plan B” for the Fiscal Cliff wasn’t even voted on.

Why not? I can’t imagine – it had all the right stuff.

According to Mr. Bonehead’s website, “The bill focuses on stopping waste, fraud, and abuse in federal programs, eliminating government slush funds (including an ObamaCare slush fund), and reducing waste and duplication in government bureaucracies.”

And that was just the trash talk about cutting wasteful spending in the bill. He also wanted a tax cut for Americans making under a million dollars a year. I’m for that!

So what’s making me laugh, when on the surface the bill seems to make some sense?

It’s what you can’t see (because most of it is hidden, or if it’s there it’s buried) that’s funny. In fact, two things in the bill are so funny that they almost brought me to tears.

Let’s go have a laugh together.

First, because House Republicans want to cut wasteful spending, they offered to cut funding for the newly minted Consumer Financial Protection Bureau. Brilliant!

We don’t need more oversight of money-grubbing schemers or consumer protection from banks and money…oh, I said that already.

The House bill wanted to tether the CFPB’s budget to Congressional appropriation, on account of the fact that they want to slice it and dice it, and, yes, kill it. That’s an elegant way to bludgeon it to death.

How is the CFPB funded now? Oh, it gets an automatic percentage of the Federal Reserve Board’s operating expense budget. Where does that come from? Don’t even get me started on that one. Although, considering the kind of stuff that gets Insights & Indictments readers going…Okay, you got it. I will cover that for you in detail in the near future – and you will love it!

Back to what’s so funny about Plan B.

Second, because House Republicans want to cut wasteful spending, they offered to eliminate the Office of Financial Research. Why that obscure little office? Because that’s where the Dodd-Frank Wall Street Reform & Consumer Protection Act provided for the breakup of too-big-to-fail banks that actually fail (is that an oxymoron, or just moronic?) by means of an Orderly Liquidation Authority.

House Republicans, with the filthy hands of their puppeteer masters – the morons from the TBTF banks – showing below the top of the curtain above where they rattle and hum, are saying there’s savings in cutting them thar stupid rules.

Brilliant!

To understand why I’m laughing, you have to get my humor. And to get that, all you have to understand is that there is nothing to cut

See, back in April when the Republican-led House Financial Services Committee tried to ram this through in the Sequester Replacement Reconciliation Act of 2012 – that went nowhere – they calculated there would be $22 billion in savings if you eliminated the Orderly Liquidation Authority.

But there is no $22 billion.

There is no cash-flow from any part of that Authority to cut. There may be some tiny savings from eliminating the tiny budget (it’s not established yet) of the Office of Financial Research, but there ain’t no $22 billion!

What there is, if that’s cut out, is a toll-free highway for the TBTF banks to keep growing and to never, ever, ever, be challenged or threatened with being dismantled.

Which is okay with me. Why? Just because I love to laugh.

Why am I laughing? Because the Office of the Comptroller of the Currency (OCC) just had a closed-door “convention” to talk with bank directors about how safe the banks really are.

Nineteen of the country’s biggest banks were looked at, and guess what? They all failed.

That’s why I’m laughing – they all failed.

Do you get it? That’s funny. The too-big-to-fail banks all just failed an OCC stress test. Come on, that’s funny!

Again, it’s what’s behind the closed doors that’s funny.

The OCC now thinks it has to put far more importance on testing banks’ compliance policies, on operational risks, and on strategic and reputation risks. They now think that’s more important than testing bank’s credit and interest rate exposures, asset price exposure, trading activity, and liquidity risks. Brilliant!

According to Mike Brosnan, an OCC veteran who heads large bank supervision, “For the first time in my life, we actually say this basket of risks is more important, and more of a priority for the system to deal with, than asset quality, liquidity, interest rate risk and trading activities.” He told The American Banker, “It makes us uncomfortable as examiners, because it’s not how we were trained.”

Now, that’s funny! These guys are now going to concentrate on stuff they’re not even trained in? You just can’t make this stuff up.

“Plan B”. That was funny to start with. It’s even funnier that it didn’t get to see the light of a “No” vote.

But what’s really funny is what’s going on behind closed doors for the soul of our economy and the safety of our savings (what savings?) and our pensions (what pensions?) and our future (what future?).

Really, I am laughing because it’s better than crying.

I hope you are, too.

Shah

45 Responses to The Comedy of John Boehner’s “Plan B”

  1. LITM says:

    No one seems to talk of the hefty bonuses paid to the upper 1% despite losses and loot which appears to continue with beneficiaries among the congress allegedly. Why not start with getting rid of the alleged CEOs who never in their whole life “invented” anything other than a crooked “innovation” to rob investors.

    • martyn sinclair says:

      A start would be to make all participants from both sides of the house delcare what trades they have made in the futures markets during all of this tom-foolery…since they are exempt from effectively inside trading , evey time they open their mouths raising then dashing hopes, you can bet they are raking in the $$ on the ensuing volatility… just another example of the bannana republic the US has become

    • Ole Wickham says:

      WHERE ARE OUR LEADERS, I can”t believe the people we putt in OFFICE, they don’t know from RIGHT or WRONG. Do what’s good for 98% of Americans, if not let’s get rid of them 111

  2. ASHLEY GOODMAN says:

    Do you know that the only successful econmies seem to be the socalled socialist economies or those partially soicialistic, Norway, Sweden, Denmark. Flndland, China, canada, Australia, etc. etc? Now look at the dolorous state of the so called capitalist countries. What is one to think? If all capitalism can produce is our Congress and Bank that are too big to fail. Then why do you hate socalism. You must hate success.

    • Phil says:

      I hope Shah will respond to this, because an excellent question deserves an excellent answer. My view is that capitalism means free markets, which unfortunately includes the freedom to get ourselves into a serious mess from time to time. That’s where we’re at right now, and so countries with less free markets are in a better state at the moment. But I wouldn’t take that to mean that capitalism fundamentally doesn’t work. Add in some strong and enforceable regulations against corrupt or unsustainable practices, plus a minimum of social welfare to ensure that ensure that everyone gets a chance in life, and we could have the best of both worlds.

      • NOMAD says:

        Stick to the Constitution! The finest document ever written by Man for All Men. Capitalism is the fairest way. Gives you incentive. Stick to the Rule of Law and Moral Justice and it works just fine. That is how we became the Leading Nation In The World!

        • Phil says:

          I see NOMAD that you are a Man of Principle. I’m not saying that any principle should be thrown away, because they have worked very well as you say, but we must remember at the same time that anything which refuses on principle to adapt will eventually become outdated.

    • Michael says:

      So Ashley doesn’t feel that the United States is a successful economy? My oh my! Even though we have become the largest economy in the world and have been so for most of the last 100 years or so? I believe our per capita GDP is also the largest of any large country. Does she know about the “successes” of some of the socialist countries, such as the USSR, East Germany, Vietnam, Cambodia, and even China, which may recently have become quite successful in GDP growth, but did so by introducing capitalist measures, and is still hardly a success in terms of personal freedom.

    • Tony D says:

      Australia a socialist country ? Don’t think so.
      The US is much more socialist, look at how centrally controlled the economy is with “too big to fail”. Calling the US a capitalist economy is a bit of joke when most FED policies (ZIRP) are designed to prevent capital formation.
      While capitalism is a founding ideal of the USA it is now a fading dream…..

    • FrasIsunset says:

      hi almost all those economies are getting the money to run the government off resources Chrismas tree economies merry Chrismas frank

    • Kevin Beck says:

      I guess you forgot to include the United States among those “partially socialized” economies.

      But that would oppose your basic thesis: That only the socialized economies are being successful. The United States went down the path toward socialism before even the Soviet Union; we started on the way in 1912, with the passage of the Federal Reserve Act and the 16th Amendment to the Constitution, which established the Income Tax. Check your Marxism to verify: Both of these were among Marx’ 10 points of a socialist economy.

      So now, I have to ask: How is TBTF banking equal to capitalism?

      A basic requirement of capitalism is the chance of failure. TBTF is a lock against failure.

  3. Debra says:

    I really look forward to each newsletter because you you have an uncanny way of exposing the games or charade would be a better term. You are a delightful and refreshing analyst who tells the real story and believe me there are VERY few who actually have integrity anymore! Thank you for being in the people’s corner…..Hey, would you consider running for President and clean up this mess?? Hope you have a Merry Christmas Shah!!

  4. sodbuster says:

    You have to be an idiot to not know what’s going on with YOUR gov.
    If you don’t know that OBUMM was put into office to ruin this country
    then you are in a coma. We will soon be Germany in the 1930′s. and you wonder why people are buying guns by the millions. I won’t be here
    as I’m 86 but you younger ones are in for a bumpy ride. Good luck,
    You will certainly need it…………

    • DD says:

      Why do people insist of blaming Obama (or the Dems) alone for all of this mess? The Republican’s have played a HUGE part in it too. I mean it was Nixon that took the USD off gold partly to pay for the Vietnam war. Reagan deregulated all the Corps that have played a part in the fraud we are seeing today. Father Bush and in particular Boy Bush also lied through their teeth about WMD’s in Iraq (amongst other lies) leading the $3 trillion war(s) and counting. This mess has been in the making for decades and is now coming into fruition.
      I know the Dems have played their part too, but have the integrity and balls to admit the Reps are just as much to blame, please!

    • Nelson says:

      By Golly, you are a sodbuster. He was put into office to keep these from becoming trillionaires. Like Bush, for example who borrowed the money to fignt his wars with and now is puzzled as to why the country is in debt.

    • ron says:

      I agree, the changes I’ve seen in my short 61 years has been a strain on my level of tolerance. anybody who thinks obama is anybody but somebody’s boy, needs to wake up. But my concerns go back to the first bush president. that was the first time I heard the expression “one world order”. I know my interpretation, but I wonder what othr people think of it?

  5. Frank B. says:

    Merry Christmas Shah!

    I must say it has been quite a year and I’m still here(12/21/12)!
    I wish all the best for you and yours this holiday season.

    Guess it’s now time to strap in for the ride of a lifetime next year.

    As usual, I’ll be tuning in for all the Insights and Indictments!!

    Keep on Keeping on Shah, we love you for it!

    FB

  6. eric taylor says:

    We could follow Iceland’s lead, they put their mismanaged banks into receivership, and jailed the bad management, and now, they are turning for the better, because they did the exact opposite of what the United States, and now Europe is doing! Happy Winter Solstice, the day the Goddess was celebrated for birthing the Sun, in the oldest known religion of humankind! Surely, the Doomsday predictions for the Mayan calender, will see the error of their ways, and renew their calender for another run! ………………….eric wynne taylor

    • Roger Charlesworth says:

      “We could follow Iceland’s lead, they put their mismanaged banks into receivership, and jailed the bad management,”……. I LOVE this kind of response…..jail the baddies etc. BY WHOM? The baddies are the ones with the clout, and watch out THEY will want to jail YOU

  7. Hazle says:

    The main point is that we are a broke nation. We all are going to have to tighten our belts and learn again that the government only has what it
    takes away from someone. (I am 84 and vaguely remember the real
    depression.)

  8. Michael says:

    ” Stick to the Constitution! The finest document ever written by Man for All Men. Capitalism is the fairest way. Gives you incentive. Stick to the Rule of Law and Moral Justice and it works just fine. That is how we became the Leading Nation In The World! ”

    I just love this comment! Since when has there been a ” Rule of Law” that applies to everyone equally in the US??? The game has been rigged from the very start of the Republic, it’s just been refined toward Greed and “Me First” screw you other sheep over the Centuries. Adding the Morality Card is the bit that makes me laugh the hardest! What morality? Christian morality, Bible Belt Morality, the Morality in Equal under the eyes of the Law?? Bwahahahaha!
    This Moronic thought process just doesn’t work to distract what’s really gone on in the Grand Republic – it’s been used as a whitewash far too long! We’ve gotten where we are (where 20% of the Population control 80% of the Wealth) by PONZI and Government collusion to cover the tracks of our esteemed Leaders who have always had the combination to Fort Knox and have manipulated the System like a Yoyo for their own personal gains.
    Well congratulations America – we are now the Leading Nation to the bottom of the Barrel. Everything we’ve accomplished has been through gaming a completely immoral system and successfully convincing the rest of the world that we believe in Freedom, Democracy and Human Rights and that we should be the World police Force to fight against the people that stand in the way of American Interest’s, while picking their pockets and negating their freedom to do anything about it! Who are the real Terrorists in this world? i think you know in your hearts who they REALLY are! Let’s try pinning the Tail on the REAL donkey’s the US and their dangerous l’il lap-dummy’s, Britain, Saudi Arabia and Israel.
    The Mayan Calendar ending on 12/21/12 wasn’t an indication of the “End of the World”, it was the end of the last Era of Mankind. Tomorrow is the start of year “0″. Might be nice if we would take advantage of a fresh start after screwing up the last 5000 years of Mankind’s History. Wishful thinking?

  9. Hayrick says:

    We in OZ had our 12.21,12 the day before you and nothing happened to us either.
    Let the trillion dollar men continue with their monopoly games the real strength is in a society that looks after each other. The day will come when we ignore their spurious, lousy and immoral paperous domination of decent citizens and they will come crawling to be let in.

  10. Ed the Grocer says:

    I’m always amazed that some people can’t believe that poverty can happen to them. In business it can be just a few percentage points change that directs the chart down. Individuals don’t catch on until they have to put things back because the credit card won,t clear the checkout counter. I actually have more faith in poor people. ( maybe because I just spent a hour with another prepper sorting out his dried bean order. ) I’m asking is there any sign that the rich are doing anything to invoke change or do they believe that it just can’t touch them? Do any of the blogs have solutions on the move? Are any people capable?

  11. FrasIsunset says:

    frank even if you come up with a perfectly good idea that won’t take any notice of it computers cannot run the economy mr Greenspan that is like a pepetual motion machine which eventually comes to a halt under it’s own friction robots ditto human ideas and initiative are ireplasable. the dreamers of the 1990s where relying on a Russian women stop dreaming and get back too good honest and enjoyable hard work

  12. RUSS SMITH says:

    SEASON’s GREETINGS Patrons Of I & I Et Al:

    The death that all calendarizers bring to themselves isn’t just uncanny but predictable with a 100% accuracy every time.
    Shah is only pointing out ideas; not changing history. History has a way of traking care of itself without anyone’s help. History in the making isn’t recognized for what it is during the time it’s being made but only years later when someone writes a history book explaining it. Governments masquarading as friends of their people have always been deceiful and so we know that we are the greatest reciptients of major deceit in the history of the entire world but we are not capable o KNOWING this right now, because history is only being made and no yet reported. The Shah may be right but not until someone writes about it 100 years from today. In the meantime trust your deceiful government, so you can feel better and not be agitated by extreem beliefs that real change is needed/required.

    RUSS SMITH, CA. (One Of Our Fiat Money Broke States)
    resmith@wcisp.com

  13. Kevin Beck says:

    There are a few things I don’t like about the Consumer Financial Protection Bureau. One is that the way it is structured is as part of the Federal Reserve. The second is that it doesn’t focus on financial education. It is designed to tell people that they are not smart enough to make their own decisions.

    On the second part: This nation has been suffering because of the federal government taking over financial care for the citizenry for almost 100 years. Since I haven’t been a part of the American mal-education system for 20 years, I would be shocked if they have any basic financial education in high schools anymore. Our government has failed our society by not educating them in how things actually work; instead, it’s been too much feel-good-ism going on over the last 40 years. What passes for “financial education” anymore is how to spend money you don’t have, and then complain about it when the bills come in.

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