Ben Bernanke: Commissioner of the Economic Police Department?

If it is not bad enough that the Federal Reserve has almost unlimited control over money and interest rates and can totally control the market from an office building, the Obama administration is proposing that the Federal Reserve serve as a regulator to detect activities that could pose risks to the financial system and economy of America. So, the Federal Reserve is now the economy police. What does that make Ben Bernanke? Economy Police Commissioner?

A new plan is circulating among key lawmakers, under which the administration is recommending two new agencies, one to protect consumers and another aimed at protecting investors and maintaining the integrity of the markets. Wonderful; in a time of economic crisis, we want to expand government and spend more money. The FDIC would get expanded authority over troubled bank holding companies and a new government agency would conduct what insiders are calling “prudential regulation,” supervising government and private financial corporations.

This is only one part of six economic strategy recommendations designed to address weaknesses in the financial system that contributed to the current recession. Lawmakers and insiders say there is still much work to be done. Timothy Geithner (Security of the Treasury Department) and other administration officials have discussed this possibility in the past. It looks likely to be proposed to Congress soon, and it is just as likely to pass.

Directly from White House spokeswoman Jen Psaki, “The president is committed to signing a regulatory reform package by the end of the year and officials at the White House and the Treasury department are continuing work with Congress on the final phases of a proposal, but there is no final proposal in place and any announcement will not be for a couple of weeks.”

The agency to be raised to create consumer protection would focus on financial products but exclude securities. The investor protection agency could be an agency that merges the SEC and the Commodity Futures Trading Commission. By expanding the FDIC’s , the administration would hopefully allow the government to more effectively address failing banking institutions, or at least that is the plan.