A contradiction in terms…

…in today’s WaPo headline:
U.S. Seeks Expanded Power to Seize Firms
Goal Is to Limit Risk to Broader Economy

The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.

The government at present has the authority to seize only banks.

Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president’s Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document.
…
The government also would assume the authority to seize such firms if they totter toward failure.

Let’s ponder that statement: Goal Is to Limit Risk to Broader Economy.

From the article, three things jump out:

• give the Treasury secretary unprecedented powers, when the Treasury hasn’t even found competent people who actually want to fill seventeen vacancies
• independent agencies that are shielded from the political process would be replaced by politicians

and

• The government also would assume the authority to seize such firms if they totter toward failure. Define “totter.”

Naked Capitalism points out,

Moreover, elements of this appear, to put it mildly, misguided. Insurers are regulated by states. Does the Treasury, in supplanting state authority, intend to put in place the needed supervisory apparatus? Does anyone at Treasury have the foggiest grasp of insurance accounting (which separately, is a bit of a mess)?

And AIG, poster child of insufficient regulation, was overseen at the parent level (which is where the black hole creating Financial Products unit sat) by the Office of Thrift Supervision (no joke), which is an agency of the Treasury! So the Treasury is acting like it needs more authority to prevent future AIG’s when its own agency was responsible for the doomsday machine part of AIG.

The Goal Is to Limit Risk to Broader Economy? Not so. The goal is to seize more elements of the economy.

UPDATE
After Failing To Help Banks, Obama Plans To Take Over Other Businesses

Welcome, Sister Toldjah‘s readers.