Bowing to political pressure from community bankers, the House Financial Services Committee approved an exemption on Thursday for more than 98 percent of the nation’s banks from oversight by a new agency created to protect consumers from abusive or deceptive credit cards, mortgages and other loans.

Huh?!

So here is the deal: Congress is going to pass legislation creating a new bureaucracy to protect us consumers from bad banks and credit card companies. And the first thing they do is exempt 8000 of the nations 8,200 banks from being reviewed by the new agency.

So rather than hold the existing regulators feet to the fire (did anybody in the SEC get fired for missing Bernie Madoff all those years?) they decide to do what the federal government always does - get bigger. But before they actually grow a new arm they hollow it out. This is an amazing Kabuki dance to watch.

The bill, however, would add $1.7 billion for an extra destroyer the Defense Department did not request and $2.5 billion for 10 C-17 cargo planes it did not want, at the behest of lawmakers representing the states where those items would be built. Although the White House said the administration "strongly objects" to the extra C-17s and to the Senate's proposed shift of more than $3 billion from operations and maintenance accounts to projects the Pentagon did not request, no veto was threatened over those provisions.

The destroyer and the 10 cargo planes are not earmarks. These are incremental spending - totaling more than $4 billion - that was not requested by Defense.

I guess when you are running a $1.5 trillion deficit this seems like monopoly money. There is an old saying: "No one manages someone else's money as carefully as they manage their own."

Stop the madness.

The bill also increases the budgets for lawmakers’ offices by more than 8 percent.

Huh?! What was that? In the same bill that essentially acknowledges that the Federal Government needs to dip into the credit card to pay the bills, the Congress INCREASES its overhead by 8%. 8%!! Are you increasing the overhead in your household by 8% this year? In your business? In your church or synagogue or mosque?

This is the simplest example of why central planning does not work. It is divorced from financial reality and lives in some netherworld of privilege and hubris.  Life is easy when you don't have to balance your checkbook.

Oh, man. This is so great. This guy Grayson is a lawyer's lawyer. He makes the other guy - the General Counsel of the Fed no less - squirm and wish he were somewhere else. Anywhere else.

I think the accusation he is making - "front running" - is that somewhere down the line the Fed executes trades through retail brokers. And these retail brokers, just before they push the Fed's order through, execute an order of their own so they benefit from the Fed's trade. They trade "in front" of the Fed order. This is insider trading of the highest order - and Grayson wants the right to audit these transactions.

Fascinating. And read Taibb's complete post for an entertaining story about his own encounter with Grayson.