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“I am convinced that the existence of too-big-to-fail financial institutions poses the greatest risk to the US economy,” Kansas City Federal Reserve Bank President Thomas Hoenig said.
“They must be broken up. We must make sure that large financial organizations are not in position to hold the US economy hostage. We must not allow organisations operating under the safety net to pursue high-risk activities and we cannot let large organisations put our financial system at risk.”
Originally posted by silent thunder
You guys need to understand Hoenig's particular and specific role in today's Fed. He almost always provides a "minority view" that is actually close to something resembling common sense, unlike the flood of garbage that issues forth from Bernanke's whiskered maw. Put another way, Hoenig is like a kind of perpetual "Washington Generals" to Bernanke's "Harlem Globalism-Trotters." He provides the dissenting position so the illusion of debate in the Fed is maintained. He may very well be sincere in his views, but he never gets anwhere and (this being a conspiracy board) we might as well go ahead and entertain the possibility that things are set up that way for a reason?
Under Greenspan there were few (or perhaps even zero) dissenting votes. When Bernanke came in, one of the the ways he said he was going to be different from Greenspan was by encouraging more debate and contrasting opinions. I very much doubt the Bernakster wants these things but for some reason he sees the need to make others think he wants them. Maybe the record of dozens and dozens of unanimous votes in the Fed year after year just seemed a little too blatant for even them to stomach. Although, they've dispensed with so many illusions in recent years, one wonders why even bother to cultivate this one at all? Maybe so they can say, "See, we considered such-and-such option but it was no good" ?
Score - Bernanke; 5,732 Hoenig: 0