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Slapping the little guys back into line

techno's picture

After watching the banksters swagger around, looting and pillaging, for over a generation, I have pretty much decided that the most we can hope to achieve in controlling these criminals is serious regulation.  I still applaud the wag who suggested that "the regulation of the financial services business should be so comprehensive and strict, the head of Goldman Sachs would have to get a hall pass from Marcy Kaptur to take a dump." But in reality, I would settle for financial services being treated like a regulated utility.

But look what happened to Hungary when she attempted to put some restrictions on the "sacred" independence of the central bank.  The EU has stepped in to explain how her government will be allowed to run.   Actually, the restrictions Hungary wanted impose are very reasonable—which pretty much means my reform wish list will never happen. (sigh)  I especially liked the part where central bankers were required to swear a loyalty oath to the country.  Imagine asking a central banker to place the well-being of his country above the institutional needs of the central bank. (the horror)  Gotta bring the big guns down on that! (cross posted at real economics)

Unlawful Constitution
EU Takes Legal Action Against Hungary
01/17/2012

The European Commission has launched legal proceedings against Hungary, accusing it of breaching EU treaties with laws that undermine the independence of the justice system and central bank. The case could delay the payment of international aid needed to shore up Hungary's economy.

The European Commission said on Tuesday it was launching legal action against Hungary for violating EU laws with new legislation that curbs the independence of the national central bank, the data protection agency and the judiciary.

Legal proceedings against a member state's laws are rare in the EU, and the Commission's move reflects mounting international concern at the authoritarian policies of the right-wing government of Prime Minister Viktor Orbán, and could delay negotiations on an international aid package for Hungary.

"We had hoped that Hungary would have made the necessary changes. This has not been the case so far," said Commission President Jose Manuel Barroso.

Hungary has introduced legislation permitting a cabinet minister to participate in meetings of the central bank's monetary council, requiring the council to send the government the agenda of its meetings in advance, and forcing the central bank governor and council members to take an oath of loyalty to the country.

The government has also lowered the retirement age of judges to 62 from 70, in addition to making other changes to the organization of courts. The move has raised suspicions that the government wants to get rid of troublesome judges and state prosecutors. more

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Submitted by Alcuin on

There appears to be a bit more to the situation than just the issue of the Central Bank, techno. I read several articles that said that tens of thousands of students and citizens were in the streets, protesting against the high-handed tactics of the right-wing authoritarian government. It is all well and good to be in favor of more control over ones' central bank, at the expense of the Euro bureaucrats, but there are also other issues to be considered. Basically, it appears to me that the politicians making the changes may well be cut out of the wrong kind of cloth. If I'm wrong, correct me.

techno's picture
Submitted by techno on

But IF you want to regain control over an obviously criminal banking system, it is good to watch what others are trying—and the responses they are provoking.

Then there is the problem that most lefties have long since abandoned their critiques of privately owned and operated central banking. The last big lefty effort was when William Greider wrote "Secrets of the Temple" back in the 1980s. Half this country wasn't even born when that was written. So if you want to talk about the intrinsic problems of Monetarism, you are forced to turn right for examples.

So in USA, the problems of private equity and vulture capitalism surface because Gnoot releases a doc on Bain Capital. 99.99% of my lefty friends don't have a clue why this is important.

I would probably like the Orban government less that I would like Gnoot as president, but I have NO idea why that is relevant here.

Submitted by Alcuin on

Well, count me as one of those .01% of "lefty friends" who does have an understanding of the problems of private equity and vulture capitalism. Maybe you need to find some new "lefty friends" - sounds like you have a lot of liberal friends, instead! I'm sure they are horrified at the candidacy of Ron Paul, who is no friend of central banking. Arguing against central banking is one thing but giving the Orban government the time of day is another matter, entirely. Just like voting for Paul in the Republican primary is one thing, but voting for him as a presidential candidate (ain't gonna happen) is another matter, entirely!