In my sophomore year in high school, I embarked on whatwould be my penultimate season of organized football. At a shade under 5-foot-8and hovering at 130 pounds, my gridiron skills were in little danger of beingdiscovered by college coaches.

However, a new kid had moved into the district thatsummer, a gargantua named Gerry, who, at age 15, stood nearly 6-foot-3 andwhose bodyweight flirted with 275 pounds. The salivating coaches didn't evenbother trying him out on the JV; instead they threw him in with the big boys onthe varsity squad, where it was soon discovered that his toughness quotient wasequal to that of a cotton ball.

He would be regularly flattened by smaller, moreaggressive players and within the first half hour of practice, the back of hisuniform was usually far dirtier than the front.

Often size and effectiveness can be deceiving.

Take the Federal Reserve for example.

Last week Fed Chair Ben Bernanke told House lawmakersthat the Fed should be placed in charge of regulating the nation's largestinstitutions.

Considering their record of past accomplishments in thatregard, particularly with respect to the financial crisis, it would be akin tostarting Gerry at tackle against the New England Patriots.

 

Bernanke maintained that the powers held by the FederalReserve made it the perfect candidate in the role of a "consolidatedsupervisor" of the country's largest and not to mention complex financialinstitutions.

However, I'm not alone in my concern over the Fed beinggranted expanded authority. Members from both sides of the aisle appeared asenthusiastic about anointing it as systemic regulator as our school's coachingstaff when they realized that Gerry was a rose petal in a 300-lb. body.

Personally I would just rather see them set monetarypolicy. But I digress.

Bernanke, however, did acquiesce somewhat to criticssuggesting to the House Financial Services Committee that a council ofregulators be formed in order to monitor what he termed were "broad"risks in the system.

That council, would in theory, comprise agencies that nowhave much more constrained and channeled regulatory authority and would beexpanded to include hedge funds, investment banks, commercial and mortgagelenders, with an emphasis on products that have been heretofore hard tosupervise.

We already have something like 32 "czars" inthe current administration who oversee everything from executive pay toautomobiles to Sudan. I'm not convinced that another layer of oversight riddledwith more bureaucracy is what we need at this point.

As for the Fed, they had their chance pre-crisis andperformed as admirably as that oversized clod on the football team.

All that was missing was a dirty uniform.

 

 

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