“I need wider powers!”

April 1, 2009 by Debi Ghate

Here’s U.S. Treasury Secretary, Timothy Geithner, on March 26th, 2009 before the House Financial Services Committee on “regulating risk”, when he outlined his plan for a “comprehensive framework for regulatory reform”:

Supervision and regulation failed to prevent these problems…U.S. law left regulators without good options for managing failures of systematically important non-bank financial institutions…We must end the practice of allowing banks and other financial companies to choose their regulator simply by changing their charters; regulators must choose who to regulate. Moreover, our regulatory system must be comprehensive and eliminate gaps in coverage. Our regulatory structure must assign clear regulatory authority, resources, and accountability for each of the key regulatory functions….

What’s Geithner really saying here? Consider the following as a translation:

Freedom has been given a chance and failed. Therefore, more stringent controls are necessary. Since men are unable and unwilling to solve their problems voluntarily, they must be forced to do it…

I need wider powers!

These are the words of Wesley Mouch, head of the aptly-named “Bureau of Economic Planning and National Resources” in Ayn Rand’s novel Atlas Shrugged. The fictional Mouch makes this argument when introducing “emergency legislation” empowering the government to carry out systemic regulatory reform.

Like Mouch, Geithner blames the supposedly free market and claims the need for greater government power as the solution. But in reality extensive, long-running government interventions into the economy are a key source of the problem. Are we going to let him get away with it?

(In a separate post, I’ll discuss further what Ayn Rand reveals to us about the Geithners of the world.)