Due to the space limitations imposed on me by the News-Sentinel I was not able to talk about the other odious provisions of the Dodd bill. One is that it will kill angel investors and those companies that depend upon them. As you know, an angel investor is typically a wealthy person or persons who provide funds for business startups or young businesses who are capital-starved. The Dodd bill would require startups wanting funding to register with the SEC and wait for an SEC review that could take up to 120 days. Then any investor must need assets of $2.3 million and an income of $450,000. I was reminded of this provision by the CEO of a successful California firm that I met in Hilo while on vacation. He said in a letter to Sen. Feinstein that if this provision were in effect, he would have never gotten his company off the ground. I am tempted to say that this is consistent with the anti-business attitude of the current party leaders in power but I though that they were champions of the little guy? Other provisions call for the President of the New York Fed to be a political appointee. This is actually nothing new. Some members of congress have been trying to politicize the Fed presidents for years. It was a bad idea when proposed annually by Henry Gonzalez (D-TX) and it remains a bad idea today. Another bad idea is in an amendment welcomed by Sen. Dodd to audit the Fed. As I have written before I am not opposed to an annual audit. What I oppose is the audit being public information. If disclosed at a hearing closed to the public - much like the CIA - then I have no objection. However a public audit would act to again politicize monetary policy. Another bad idea.
Harold A. Black is professor emeritus in the Department of Finance, University of Tennessee, Knoxville having retired after 24 years of service. He has served on the faculties of American University, Howard University, the University of North Carolina - Chapel Hill and the University of Florida. His government service includes the Office of the Comptroller of the Currency and as a Board Member of the National Credit Union Administration. He also has served on the boards of directors Home Savings of America and its parent company, H. F. Ahmanson & Co., Irwindale, California prior to its merger with Washington Mutual Savings Bank, on the board of New Century Financial Corporation, Irvine, California, then the nation’s largest real estate investment trust and as director and later chairman of the Nashville Branch of the Federal Reserve Bank of Atlanta. He writes an occasional article for the Knoxville News-Sentinel at http://www.knoxnews.com/staff/dr-harold-black/. His web page is haroldablackphd.com