Larry "Summers, the former Treasury Secretary, says the Fed in any case might not be up to the task. 'It's not realistic to think that career civil servants are going to forsee bubbles that are about to burst in ways that are better than those who have their large fortunes on the line,' he said", WSJ, 31 March 2008.
"Groups ranging from small banks to state attorneys general criticized Treasury Secretary Henry Paulson's proposals to consolidate regulatory agencies and revamp oversight of a financial system bruised by crises in the credit and housing markets. ... Critics aren't shy about making their feelings known. For example, smaller banks fret that creation of a single banking regulator will favor the desires of their bigger competitors. ... Other groups that have expressed early opposition include credit unions. ... State prosecutors complain that a proposal to create a national insurance regulator would substitute their vigilance with weak federal oversight. ... States attorneys general, a powerful group, contend that the Paulson proposals will usurp their enforcement powers, particularly over the insurance industry. ... Paulson argued that state regulation needed to be more even and consistent. He proposed creating a federal commission to judge and grade state policies related to mortgage lending", WSJ, 1 April 2008.
Hank Paulson (HP) is a proponent of "fiat money slavery". He wants all Americans to bail out his Wall Street cronies by holding continually debased dollars. He fights federalism by trying to increase federal oversight of, among other things, insurance companies, pre-empting state regulation, he releases his plan after Eliot Spitzer's demise. How neat. I disagree with LS about one thing: we don't need more regulation, we need more Wall Street firms going bankrupt. Oh yes, and more indictments of the heads of these firms. Well Mike Garcia, the ball's in your court.
Face it, HP wants to gut state regulation of anything to protect his big business cronies.