Daily Archives: 14 June 2012

Government Censorship

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Readers know that I’m no fan of the NLMSM.  However, now we hear of a naked attempt to turn the press—that erstwhile bastion of freedom—into an arm of the Federal government, all at the behest of President Obama’s Labor Department.

Labor officials have put forward a plan to require reporters who analyze and write about economic data which Labor provides in its “lock up” room to use government—Labor—computers, software(!?), and Internet accesses so the government, they claim, can protect itself against potential security hacks.

I have some beachfront property in central New Mexico on offer for those who believe this claim.

This is nothing but the government’s attempt to dictate to the press what they will be permitted to see and what they will be permitted to say about what they will see.  Bloomberg News Executive Editor, Dan Moss, testifying before the House Oversight and Government Reform Committee, has the right of it:

This proposal threatens the First Amendment.  The government would literally open the reporters’ notebooks.

(As an aside, it’s interesting to note that the Senate’s Homeland Security and Governmental Affairs Committee isn’t conducting any hearings on the matter.)

Carl Fillichio, a Labor communications specialist, told committee Chairman Darrell Issa (R, CA) after Wednesday’s hearing that he, Fillichio, would provide “some flexibility” on a June 15 deadline for the plan’s implementation.  Notice that: a communications specialist, not a Labor official with actual authority, claims to be in a position to commit the Department.  Fillichio did then send an email to Bloomberg, The Washington Examiner, and others, saying in part

Per my commitment to Chairman Issa’s request, we are going to move the effective date on changes to the lock up[.]

Notice this, too: there’s no commitment by this underling—or by anyone in authority at Labor, or by anyone in Obama’s White House—to eliminate this plan; there’s only a “commitment” to move its effective date.

Fox News‘ headline in the linked article is naïve.  This isn’t a backing off.  This is just cynical delay and a weasel-wording of a pseudo-change made by a junior functionary.  This obfuscation is of a piece with the HHS contraceptive, sterilization, and abortifacients insurance coverage “compromise.”  The plan will go into effect essentially unchanged, unless there’s more outcry and more pressure put on our Congressmen to withdraw by legislation this plan’s attack on our freedom (which also will force Obama’s explicit veto).

Regulations and Foreign Law

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The Fed wants to put our own banking system under the aegis of international banking regulators.  Not directly, but by requiring all American banks—including even our smallest institutions—to meet the capital requirements of Basel III.  Basel III is an international standards “agreement” carrying international bureaucrats’ view of what constitutes a bank’s capital adequacy; those bureaucrats’ view of proper stress testing of a bank; and those bureaucrats’ view of the adequacy of a bank’s liquidity, apart from its capital adequacy.

There’s more: the Fed intends to impose on each bank a 1%-2.5% surcharge on its (increased) capital—because the Fed has a better understanding of how the bank’s capital should be used than does the bank.

Aside from whether US businesses should be under the control of foreign quasi-governmental agencies—a meme this administration is increasingly embracing—smaller financial institutions will have trouble meeting the additional requirements.  This is apparent from the results, in market share and profit margin, of this sort of intervention.  Lenders with $1 billion or less in assets have seen their market share fall to the neighborhood of 10% from the 31% they held in the early ’90s, and smaller banks had a return on assets of 1.22% for the first quarter of this year, compared with 1.52% for those with more than $1 billion in assets, just from the existence of the Fed’s domestic regulatory requirements.  So much for too big to fail.  The Fed is busily instituting too small to survive.  (And as an aside, notice those profit margins.  So much for fat cat bankers.  Those are the margins of chain grocery stores.)

There’s yet more.  The Fed doesn’t want banks to rate their riskiness in any effective way.  It intends to  force banks to stop relying on credit ratings when looking at their own assets’ riskiness.  Instead, the risk classifications of another foreign entity, Organization for Economic Cooperation and Development, are to be used.  The OECD Knows Better.

Hmm….