The Kansas City Federal Reserve President, Thomas Hoenig, spoke truth to power in a speech to the U.S. Chamber of Commerce, titled The Financial Foundation for Main Street. This is how it starts out:
If we stray from our core principles of fairness or ignore the rule of law, we distort the playing field and inevitably cultivate a crisis. When the markets are no longer competitive, firms become a monopoly or an oligopoly and it matters more who you know than what you know.
Then, the economy loses its ability to innovate and succeed. When the market perceives an unfair advantage of some over others, the very foundation of the economic system is compromised.
Big banks have already begun poking the holes in Obama’s new rules—holes they expect their banks to pass through basically unchanged.
The president promised this morning to work with Congress to ensure that no bank or financial institution that contains a bank will own, invest in or sponsor a hedge fund or a private equity fund, or proprietary trading operations unrelated to serving customers for its own profit.
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