Greenspan was wrong

After reading 13 Banker's I have been mulling over Alan Greenspan's libertarian background and his chairmanship of the Federal Reserve. Where there is regulation there is an implicit government guarantee much like for Fannie and Freddie. The September 08 financial crisis pretty much exposed the guarantee to all those that were too big to fail whether they were banks or not.  It is apparent that laissez faire economics does not work when any player is too big to fail. That Alan Greenspan headed the Federal Reserve as it let the system develop into a club of TBTF's ran contrary to his Libertarian principals and is his biggest failure.

TBTF is such an important core subject to comment on that I am thinking of changing the blog's banner.  I have no doubt Bonehead will be on the side of the status quo in spite of his need to bring in the Tea Party.  Busting up the fat cats on Wall Street has populist appeal and excellent risk dispersing intellectual economic underpinnings.  It will be fun to see Republican's defend all that they say they stand against when they support the Wall Street lobby.  

We need a Populist revolt against TBTF

    13 Bankers by Simon Johnson and James Kwak makes a good case for a Teddy Roosevelt Style break up of Mega-Banks, principally those that are Too Big To Fail.  Ron Paul may be the Andrew Jackson of our time who comes out of the wilderness and smites Wall Street and the Federal Reserve they co opted.
    Johnson and Kwak are confident that TBTF is such a strong idea against our present course of centralizing our financial structure that a key figure may coalesce a counter to Wall Street's influence much like Teddy Roosevelt did a hundred years ago. For example at the start of the 1900's it was the common opinion that Oil and Steel trusts were the inevitable natural order of economic activity and yet within a few short years TR was able to reverse that opinion and break up the trusts and apparently for the good of the country.
    The Obama administration is populated by Wall Street people in all things to do with Treasury and you can depend on Bonehead and Mitch to push the Wall Street agenda even more vigorously to out curry their favor in the next election.  Ron Paul with his steady drip drip criticism of the Fed may get traction on the issue as it becomes common knowledge that regulation and regulators get co opted by the industry they regulate.  The best refresher is failure. Allowing banks to be too big to fail is bad for our democracy as well as our economic well being. Presently it may be a Populist sentiment but is has a strong foundation.

Ron Paul comes in from the cold, New York Times

http://www.nytimes.com/2010/12/13/us/politics/13paul.html?_r=1

Ron Paul did not move, but by sticking to the core ideology of liberty the public and congress is beginning to listen. It's not easy, though.  I forgot how irrelevant Rudy Giuliani was in the 2008 Republican primaries.

As final Debt Plan is Released, Signs That the Fight is just Beginning

http://www.nytimes.com/2010/12/02/us/politics/02fiscal.html?_r=1&ref=politics

My number one priority is to see a path towards a balanced budget.  As a businessman, family man and citizen I can't stand politicians who put there heads in the sand when it comes to the budget. Governor Christie of New Jersey is popular because he confronts it head on.  Democrat or Republican who don't want to grapple with this monster don't deserve our ear or respect.

We have known for decades that we were on an  untenable path of over committing and underfunding. The G. W. Bush administration was the coup grace. It took easiest path in every situation; tax cuts, rolled over on every increased expenditure proposed by Congress, engaged in war at will and that caused an economic malaise we are not getting out of for a decade. LBJ all the way. He was from Texas, too.

Republicans Threaten to Bring Senate to a Halt over tax Dispute

http://www.nytimes.com/2010/12/02/us/politics/02cong.html

Fantastic. Do nothing and thereby do no more harm. Mitch McConnell I applaud your efforts to stalemate the Senate and thereby the Congress so it grinds to a halt.  I really mean it. Next step is to keep the brakes on so tight that appropriations stop.  Two candidates to strangle with withdrawal of funding are the departments of energy and agriculture.

David Nolan, Founder of the Libertarian Party

http://www.nytimes.com/2010/11/23/us/23nolan.html?src=twrhp

I am a member of the Libertarian party, but I never heard of David.  Its a generous obituary for the New York Times which I found fascinating.  "He wanted to be an uncompromising architect like Howard Roark, the hero of  Ayn Rand's "Fountainhead."

The Blur between Spending and Taxing

http://www.nytimes.com/2010/11/21/business/economy/21view.html?src=busln

The attached link refers to an ECONOMIC VIEW article by N. Gregory Mankiw in this past weekend's New York Times describes the similarity between tax credits and increased spending.  Raising taxes is such a killer issue on the right that we can expect Republicans to use slight of hand tricks to get the spending that their favored lobby wants  and call them tax cuts.  I consider these additional complications to the tax code to be ten times worse then earmarks, and the Tea Party ought to pay attention.

If Bonehead and the gang start promoting these tax credits please put out the clarion call that Republicans cater only to the fat cats that have the legal and accounting expertise to take advantage of them.

House Democrats Repel Efforts to Cut Funds for NPR

“Representative Eric Cantor of Virginia, the number two House Republican and soon to become majority leader, said that the vote showed that Democrats had failed to learn the lessons of this month's midterm elections” and on the other hand “Representative Earl Blumenauer, Democrat of Oregon, who formed the Congressional Public Broadcasting Caucus, called the Republican effort cynical. I urge members of both parties to focus our efforts on the urgent priorities facing this Congress and stop playing political games with public radio stations.”¹

I personally am a big fan of PBS and NPR. I watch and donate regularly. The appeals for donation imply very little government backing for both. My opinion is that it should stop forthwith. The job of launching public broadcasting is done and government should have gotten out a long time ago. Much like Ford in the auto industry experiencing increased support from the public for not taking taxpayer money Public Broadcasting would benefit equally when it is made perfectly clear that it is not government radio or TV.

Public broadcasting is launched. Time to bump it into the non profit private sector and move on. Oh, you disagree? You believe an arm of the government should be in a position to review what is broadcast by PBS or NPR? You didn't like it when the Bush Administration made noises about controlling public broadcasting's liberal bias nor do I like the possible restraint that could be imposed by any administration. Kill it. The money is peanuts in comparison the hacking the defense department needs to take. Congressman Blumenauer stop being such a bonehead and make the new majority leader squirm, backpedal and use inane arguments to defend the indefensible such as increased defense spending and tax cuts for the rich.

Stop playing nice with Republicans

Republicans, not the tea party, made Nancy Pelosi into a witch this last past election. I think that Democrats should do the same with the new Speaker of the House, Congressman John Boehner of Ohio. Everyone is being very nice to John by calling him Representative “Bâner.” I rather like “Bôner,” and with a descriptor such as bonehead you could have a field day. You know he has made some big ones. Bonehead Boehner. Go to it Democrats and stop rolling over on every issue for Christ's sake.

You want to fight about something then fight the tax cuts like man. When Boehner makes the argument that his country club pals need tax relief, well call him for the bonehead he is. I don't like taxes but I don't like trillion dollar deficits either. It seems to me that we need to make some drastic cuts and raise government revenue at the same time. I suspect Bonehead will be in the lights making some pretty stupid arguments to spend extra on defense and cuts taxes even further. Take him up on it will you!