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How To Describe The President’s Agenda?

Monday, March 23, 2009  |  posted by Hugh Hewitt

“Sweeping?” “Massive?” How about “radical?”

Yesterday’s New York Times article by Stephen Labaton sketches out an agenda of government control over the private sector which pushes out far, far beyond troubled banks that accepted TARP funds. The key graphs:

Officials said the proposal would seek a broad new role for the Federal Reserve to oversee large companies, including major hedge funds, whose problems could pose risks to the entire financial system.

It will propose that many kinds of derivatives and other exotic financial instruments that contributed to the crisis be traded on exchanges or through clearinghouses so they are more transparent and can be more tightly regulated. And to protect consumers, it will call for federal standards for mortgage lenders beyond what the Federal Reserve adopted last year, as well as more aggressive enforcement of the mortgage rules.

The administration has been considering increased oversight of executive pay for some time, but the issue was heightened in recent days as public fury over bonuses spilled into the regulatory effort.

The officials said that the administration was still debating the details of its plan, including how broadly it should be applied and how far it could go beyond simple reporting requirements. Depending on the outcome of the discussions, the administration could seek to put the changes into effect through regulations rather than through legislation.

One proposal could impose greater requirements on company boards to tie executive compensation more closely to corporate performance and to take other steps to ensure that compensation was aligned with the financial interest of the company.

The new rules will cover all financial institutions, including those not now covered by any pay rules because they are not receiving federal bailout money. Officials say the rules could also be applied more broadly to publicly traded companies, which already report about some executive pay practices to the Securities and Exchange Commission.

I will begin the program by discussing this article, and will review the specifics with economist Brian Wesbury, Congressmen David Dreier and John Camopbell, and former Massachusetts Governor Mitt Romney as the show progresses. The Times article is a trial balloon to see just how aggressive a push can be mounted for remaking the private sector into the ward of the federal government. The private sector –from Main Street to Wall Street– had better mount an immediate campaign to stop this power grab, and wherever the president attempts to impose it by regulation as opposed to legislation, should stand by the courthouse foor ready to challenge every extra-constitutional measure.

For more on the radical nature of the president’s ambitions, see Scott Johnson’s short essay at Powerline.

UPDATE: The EPA adds another part of the predicate for the massive expansion of the government’s power.

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