• Sprott Money
    05/06/2016 - 06:03
    The US, in its own decline, is showing this same self-destructive tendency. The worse things get, the greater the inclination of the citizenry to say, “Carry on, everything’s fine.”

Guest Post: Welcome to the United States of Orwell, Part 4: "Consumer Protection" Just Another Federal Reserve Power Grab

Tyler Durden's picture


Submitted by Charles Hugh Smith from Of Two Minds

Welcome to the United States of Orwell, Part 4: "Consumer Protection" Just Another Federal Reserve Power Grab

How to mask yet another Federal Reserve power grab? Call it "consumer protection."

This is truly Orwellian: the latest and greatest Executive Branch/Federal Reserve power grab is labeled "consumer protection." I am indebted to correspondent Jim S. who seems to be one of the few Americans to have actually sorted through this monstronsity and gleaned its true nature: an unprecedented extension of Executive (i.e. Imperial Presidency) and Federal Reserve power.

Let's start by recalling that the Federal Reserve is a consortium of private banks. Calling a private consortium of banks the "Federal Reserve" is the original Orwellian misdirection, for there is nothing "Federal" about the Federal Reserve. It is not a government agency.

Now guess who will fund and control this vast new bureaucracy of "consumer protection"? Yes, the private consortium known as the Federal Reserve. "The Consumer Financial Protection Bureau (CFPB) will be an independent unit located inside and funded by the United States Federal Reserve. It will write and enforce bank rules, conduct bank examinations, monitor and report on markets, as well as collect and track consumer complaints."

Since managing the money supply and interest rates is the ultimate "consumer protection," we can ask how well the Fed managed those tasks in the past 15 years: alas, their management has been catastrophic for the nation and the middle class, which has been gutted by their policies of serial bubble blowing, leveraged speculation and bank predation.

The very last private consortium any sane person would select to run a Consumer Financial Protection Bureau would be the privately owned parasites of the Federal Reserve. Doesn't the vast, sprawling bureaucracy of the Federal government already have agencies experienced in regulating consumer protection? Why do we "need" to consolidate all financial consumer data and regulation under the control of a non-government consortium that has amply proven itself to be the enabler and enforcer of institutionalized bank predation, embezzlement and fraud?

This is beyond bizarre. If we had to assign the task of protecting consumers to a privately owned consortium, then we'd be better off giving the task to IBM. But the bank-owned toadies in Congress handed all this power to the Federal Reserve. One wonders how it is legal that a private consortium now has power over all financial data in the U.S.

Here is Jim's summary:

You are more than familiar with the Shadow Banking System running parallel, black-box-like to the Federal Reserve System...no regulation, no accounting, notional hypothecation upon notional re-hypothecations accounting for leverages to the Moon, and in the end, essentially infinite debt.


The CFPB represents to me a complete, contained Shadow US Government System established by the Dems and the Fed right under our very noses. One of the profound things I have not completely conveyed is what I see as the invisibility cloak and impenetrable shield the CFPB has for total immunity from evaluation, oversight, attack, etc.


The CFPB is funded by the FED with any amount of money it asks for and is completely unaccountable as to how it uses it...unlimited funding. The CFPB is answerable to no entity regarding its deliberations, decisions with the full force of law, disclosure of agendas.


It will link through its fully unaccountable Director through established Executive Branch inter-agency councils and sub-councils to every agency and sub-agency it desires or any agency wishing to associate/link with the CFPB (e.g.IRS requests Director to have instant nanosecond access for behaviorial data collection on consumers via their formerly private credit card, bank, credit union, stock market and forex market and commodity market accounts....and, Director Cordray says in nanoseconds,....OK!)


Under the opaque umbrella of the CFPB, all Executive Agencies, formerly accountable to the Congress in some way, will become opaque to the Congress insofar as they are associated with the CFPB. Congress can request info from the CFPB, none has to be given at all.


The CFPB is an autonomous creature of the Federal Reserve, completely cloaking itself with total immunity from any Congressional controlling authority.


The establishment of a Shadow Government Executive Branch "coup" is a direct follow-up to Paulson's "gun to the head" of Congress in 2008 when the world was only hours from a Federal Reserve derivative originated financial crash. Congress capitulated with the initial $700B. and in the meanwhile the Fed has printed debt loans to the tune of $16T to fund the interest liabilities of short term derivative rollover and refinancing demands.

Jim also noted the dearth of mainstream media coverage of the CFPB, and suggested this story: Obama Creates Unconstitutional Monster.

“The CFPB director will have vast rulemaking, supervisory, investigative and enforcement powers and the authority to regulate any person or business that offers or sells a ‘financial product or service,” the Senate Republicans told Obama. “This authority will directly affect every American household by limiting their choices when purchasing financial products, restricting the availability of credit to consumers, and increasing the cost of goods or services purchased using credit.”


“Despite the vast power vested in the hands of the director, there are no effective checks on the director’s authority,” said Sen. Richard Shelby, the ranking Republican on Banking Committee.


“When you set up something that is outside the control of the elected branches, when you set up something that doesn’t require the appropriations by Congress to make sure they can continue their work only on the basis of their complying with the constitutional requirements, then you have essentially set up the potential for a rogue agency which does not have any controls and therefore you’re affecting the liberty of the people.”

The Dodd-Frank bill, like Obamacare, is tyranny by complexity. Who can plow through thousands of pages of these bills except those gaming the legislative process to their own advantage?

Consider the Glass-Steagall Act, at 37 pages in length, and the 2,319-page monstrosity of the “Dodd-Frank Wall Street Reform and Consumer Protection Act:" (Source)

Back in December, Nick Schulz helped put the size of the 2,074-page healthcare bill into some historical context by comparing its length to some previous bills that rank among the most consequential in U.S. history, like the 82-page Social Security Act of 1935 and the 74-page Civil Rights Act of 1964.


Now that Congress has passed the “Dodd-Frank Wall Street Reform and Consumer Protection Act,” it might be a good time to compare the 2,319-page financial reform bill (245 pages longer than the healthcare bill) to the previous bills listed below (and see graph) that are considered among the most consequential legislative acts for banking and finance.


1. Federal Reserve Act (1913) – 31 pages.


2. Glass-Steagall Act (1933) – 37 pages.

Like everything else, this issue has been put through the partisan meat grinder. Everybody knows the banking sector owns Congress, but how it is even legal to grant extraordinary powers over the entire financial system to a private consortium without congressional oversight? It simply doesn't pass the most basic constitutional "sniff test."

The entire Dodd–Frank Wall Street Reform and Consumer Protection Act should be nullified as an unconstitional power grab. The asleep-at-the-wheel lackeys on the Supreme Court better wake up soon or democracy and "the will of the people" will be mere memories.

Thanks to Dodd-Frank, it boils down to this: whatever the Federal Reserve does with the data it collects from Federal government agencies is private and none of your business. Whatever financial actions you take that create a digital record is the now the Fed's business.

In case you have any doubts about where our "leadership" is taking us, please review these Assorted quotes by Fascists or about Fascism.

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Thu, 03/29/2012 - 14:25 | 2301325 Pinto Currency
Pinto Currency's picture



The Fed - an institution owned by private banks - is going to protect consumers.  Nice.

Thu, 03/29/2012 - 14:31 | 2301353 spiral_eyes
spiral_eyes's picture

In other news:

Wolves are to be empowered by the Obama administration to protect sheep, while foxes are being roped in to protect chicken coops. 

Thu, 03/29/2012 - 14:38 | 2301381 CH1
CH1's picture

Let me try to say this succinctly...

Fuck the state. 

Fuck every state.

Fuck the position of "state."

Thu, 03/29/2012 - 14:41 | 2301391 Doubleguns
Doubleguns's picture

The chicken coop has been turned into a butcher shop.

The foxes are simply asking the customers (bankers) how do you want your chicken cut up sir!!!

Thu, 03/29/2012 - 14:56 | 2301439 Problem Is
Problem Is's picture

Banksters: "Fry that chicken up and serve it to me on a SILVER platter..."

Thu, 03/29/2012 - 18:01 | 2302006 Doubleguns
Doubleguns's picture

The need 450 million bullets to kill 300 million americans because they are going to miss half the time.

Thu, 03/29/2012 - 20:31 | 2302366 RussellChester8
RussellChester8's picture

my friend's sister makes $74/hr on the computer. She has been out of a job for seven months but last month her check was $17871 just working on the computer for a few hours. Read more on this site .... http://bit.ly/wYpMrv

Fri, 03/30/2012 - 12:17 | 2303736 strayaway
strayaway's picture

On the computer? Does she lay backwards over it performing for geeks? Link to pictures?

Thu, 03/29/2012 - 14:33 | 2301358 Gully Foyle
Gully Foyle's picture
"Consumer Protection"

Is not what you are talking about. You have conflated finance with protection from say flammable baby clothing.

Consumer protection in itself is a good thing because there are a shitload of dumb motherfuckers out there, like the people who killed their baby by feeding it only Soy milk.


Thu, 03/29/2012 - 14:58 | 2301446 Pinto Currency
Pinto Currency's picture



Consumers need protection against the Fed's flammable currency and the Fed's shareholders' (the private banks) flammable financial products.

Thu, 03/29/2012 - 15:10 | 2301477 Ripped Chunk
Ripped Chunk's picture

Not you though.

Thu, 03/29/2012 - 15:44 | 2301579 jcaz
jcaz's picture

It's called "Darwinism"-  let it work.....

Truly pathetic that people still think stupidity can be regulated and solved......

Thu, 03/29/2012 - 15:52 | 2301605 Burnbright
Burnbright's picture

Your argument is that people need consumer protection from being dumb? Sorry idiot but you can't fix stupid. And by the way the court ruled in that case that the baby died to not being feed enough, which is rather obvious given that the baby only weighed 3 pounds at 6 weeks. 

Thu, 03/29/2012 - 15:54 | 2301611 TheFourthStooge-ing
TheFourthStooge-ing's picture

Gully Foyle said:

"Consumer Protection" Is not what you are talking about.

Indeed. However, the Consumer Endless Ass Raping Bureau didn't test that well in terms of warm and fuzzy in marketing focus group studies.


Thu, 03/29/2012 - 16:03 | 2301640 themiestro
themiestro's picture

No, consumer protection is stupid because you wind up with people that can't take care of themselves.  DARWINISM RULES.  If government went by this law, our top five largest banks wouldn't exist today, oh sorry, CAPITALISM RULES.

Thu, 03/29/2012 - 17:55 | 2301997 machineh
machineh's picture

'You have conflated finance with protection from say flammable baby clothing.'

No, YOU have. The agency is called the Consumer Financial Protection Bureau.

In other words, they don't regulate baby clothing. 

However, if you should experience any problem getting your sheeple suit back from the cleaners, do give them a call!


Thu, 03/29/2012 - 14:26 | 2301329 espirit
espirit's picture

The 99% can't be trusted to handle their own monetary affairs.

There, fixed it.

Thu, 03/29/2012 - 14:34 | 2301367 Gully Foyle
Gully Foyle's picture


"The 99% can't be trusted to handle their own monetary affairs."

That is true.

No one pointed a gun at anyones head and made them go into debt. No one forces people to overspend on cons like Organic food.

The 99% are dumb as a box of rocks and actually deserve to be where they are.


Thu, 03/29/2012 - 14:56 | 2301438 pods
pods's picture

When a product is financialized, the price jumps up so high that it almost requires some form of credit to pay for it.

See college, housing, autos, etc.


Thu, 03/29/2012 - 14:58 | 2301442 Problem Is
Problem Is's picture

+1... Correct analysis...

Thu, 03/29/2012 - 15:11 | 2301479 Ripped Chunk
Ripped Chunk's picture

Not you though.

Thu, 03/29/2012 - 16:12 | 2301680 Shigure
Shigure's picture

From the link at the bottom of the post:

“Education is dangerous - Every educated person is a future enemy”
-- Hermann Goering

Thu, 03/29/2012 - 17:22 | 2301916 overbet
overbet's picture

Ok but where they are is costing me fucking money through government handouts and bailouts.

Thu, 03/29/2012 - 14:27 | 2301333 Al Huxley
Al Huxley's picture

"Constitutional sniff test" - that's so quaint.  Wow, I can't believe the constitution is being ignored, when did that start to happen? If O didn't know better I might think that the people who own the system are running it exclusively for their own benefit.

Thu, 03/29/2012 - 14:38 | 2301380 NotApplicable
NotApplicable's picture

I feel like I'm listening to some high-schooler who's just registered to vote for the first time.

'The asleep-at-the-wheel lackeys on the Supreme Court better wake up soon or democracy and "the will of the people" will be mere memories.'

As always, nothing but childish, wishful-thinking from a fuckin' brain-dead slave who knows better, but still cannot permit himself to accept the obvious truth staring him in the face.

It's funny that sometimes he gets it, but other times he plunges his head back into the sand trying desperately to make his perceptions align with his beliefs.

Oh well, if he ever does overcome his cognitive dissonance, it should be a hell of an article.

Take the red pill!

Thu, 03/29/2012 - 15:00 | 2301450 AustriAnnie
AustriAnnie's picture

Very few people pay any attention to the corruption of the system and the theft of liberty that system has created.  Yet, even those who "get it" are still begging for someone inside the system to fix it.  

How depressing is it that those people who are most aware of our plight (the few of them that exist), are still seeking help from above?  When is it that people will understand that the people who created the problem are not the people who will create the solution? 

The supreme court is not "asleep at the wheel."  They have been placed there -- offered a position of power in exchange for their cooperation.


Thu, 03/29/2012 - 15:32 | 2301542 pods
pods's picture

Well I think that many people do not want to admit reality.  Shit, people love hope.  Hope is like the salt you can put on a shitty meal.  Makes it a bit more palatable.

You will get lambasted for suggesting that a solution will not be found within this system.  

Because you are removing people's hope.

So people will continue to get flowers every four years from the spouse who beats them the day after they say they are sorry and it won't happen again.

It is in human nature.  And the people who run the show fully understand that.



Thu, 03/29/2012 - 14:27 | 2301336 Buckaroo Banzai
Buckaroo Banzai's picture

Well they are in full-on "fuck you, try and stop us" mode now.

Thu, 03/29/2012 - 15:30 | 2301537 Citxmech
Citxmech's picture

No wonder they folded on Elizabeth Warren's appointment so easily.

Thu, 03/29/2012 - 14:28 | 2301340 KickIce
KickIce's picture

Create a crisis and then offer a solution, each time the noose tightens.  Actually, as of late they are more craming the solution down our throats. 

Thu, 03/29/2012 - 14:28 | 2301341 NotApplicable
NotApplicable's picture


Thu, 03/29/2012 - 14:30 | 2301346 lolmao500
lolmao500's picture

In the same area...

Shoot a civilian, get paid up to 500$ by the cop union.


Albuquerque police officers involved in a rash of fatal shootings over the past two years were paid up to $500 under a union program that some have likened to a bounty system in a department with a culture that critics have long contended promotes brutality.

Shootings have increased 400% since this program has started... fucking corrupt pigs.

Thu, 03/29/2012 - 15:26 | 2301524 10mm
10mm's picture

I doubt killing someone for  500 bucks is going to create an incentive for a unjustified shooting.500 bucks will be for his/her booze habit because lots of booze will be swigged with the anxiety/depression.Heck,they could shake down a dealer without a shot fired.

Thu, 03/29/2012 - 18:20 | 2302030 CH1
CH1's picture

No more benefit of the doubt for agents of the state.

I know one good cop. He gets the benefit of the doubt.. and ONLY him, because he earned it, and NOT because he wears a blue costume.

Thu, 03/29/2012 - 18:35 | 2302054 4horse
4horse's picture



The Owners of the 12 Central Banks:
- Rothschild Bank of London
- Rothschild Bank of Berlin
- Lazard Brothers of Paris
- Israel Moses Seif Banks of Italy
- Warburg Bank of Amsterdam
- Warburg Bank of Hamburg
- Lehman Brothers of New York
- Kuhn Loeb Bank of New York
- Goldman, Schs of New York
- Chase Manhattan Bank of New York



whether there are about 3003000 or 3000000 VERY POWERFUL__ individuals who Own The FED






Thu, 03/29/2012 - 15:47 | 2301588 TheGardener
TheGardener's picture

It`s an incentive, period

As I said before, gun ownership is granted to militias,
not to government thugs . Disarm belligerents.

Thu, 03/29/2012 - 16:12 | 2301678 10mm
10mm's picture

Alot,NOT ALL,of those Vets will join Police Dept's.That's what im concerned with.Fucked up minds getting passed thru the system because of Vet Status.

Thu, 03/29/2012 - 17:32 | 2301934 Ripped Chunk
Ripped Chunk's picture

I hear the Saints are looking at a couple of these guys.......

Thu, 03/29/2012 - 14:30 | 2301350 lolmao500
lolmao500's picture


TSA Manager Arrested for Running Prostitution Ring



Thu, 03/29/2012 - 14:36 | 2301373 Gully Foyle
Gully Foyle's picture


Two questions come to mind

1. Was he Black?

2. Were the ho's ugly?

Way I see it BIGOV just crushed the small minority business owner.

Thu, 03/29/2012 - 14:47 | 2301409 lolmao500
lolmao500's picture

Way I see it BIGOV just crushed the small minority business owner.

Now that's funny.

Thu, 03/29/2012 - 18:56 | 2302094 The Alarmist
The Alarmist's picture

Did he have the appropriate business licenses? Pay the Ho's minimum wage or better. Collect & remit appropriate withholdings (FITW, FICA, Medicare, SITW, other local taxes)? Comply with OSHA? Dispose of used sex materials IAW EPA regs? Pay taxes on his own income & divs? Do anything that these leeches require of the rest of us when we run a business?

Clearly he did not pay off the right people if he got caught.

Hope they at least remembered to use a fresh rubber glove when processing him into lockup, unlike what the TSA does when feeling the rest of us up.

Thu, 03/29/2012 - 15:13 | 2301483 Ripped Chunk
Ripped Chunk's picture

No, none of these retards are screened for sex offender status.

Thu, 03/29/2012 - 16:00 | 2301630 TheFourthStooge-ing
TheFourthStooge-ing's picture


No, none of these retards are screened for sex offender status.

No need to bother. If they weren't one when hired, they will be after a month on the job.


Thu, 03/29/2012 - 14:32 | 2301356 Everybodys All ...
Everybodys All American's picture

that would explain the justification for the repeated "market saves" by the PPT.

Thu, 03/29/2012 - 14:39 | 2301383 gjp
gjp's picture

Off and running again today.  Volume is dying and markets are levitating.  US decouples from the rest of the world again (note: only when the rest of the world is down).  You can set your watch to it.

Thu, 03/29/2012 - 14:33 | 2301362 GeneMarchbanks
Thu, 03/29/2012 - 14:44 | 2301366 Mercury
Mercury's picture

Almost all incremental government of the last...10? 20? years has been a liberty/"security" swap.

Obamacare, Homeland Security/TSA...a universal "climate change" authority is of course the Holy Grail.

Thu, 03/29/2012 - 14:36 | 2301372 disabledvet
disabledvet's picture

"takes a fascist to know a fascist." is there anyone better to execute on a "cram down provision" than the Fed? Plus there is a contradiction in your argument: Imperial Presidency or Imperious Wall Street? Obviously there is only a...."minor clash of ego's"...between those two..."departments." And of course the Fed is located in Washington DC and is run by an...ahem..."academic" (oh, no!) yeah..."Ben Bernanke is Hitler"...(he may indeed be the Anti-Christ however....

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