While Bachmann is young and attractive her supporters are not. Ron Paul's supporters on the other hand are not old and folksy. What's going on here? The Republican establishment doesn't understand Marshall Mcluhan, actually not many do; myself included. Today we are witnessing the premise of the "Media is the Message" with the Arab Spring that started with one lone dissenter in an obscure Tunisian village who became a cause among the young in social media. I postulate that Twitter and Facebook are the natural media of the young and that the young in general who take up this media are libertarian and not authoritarian at heart.
The Republican's are not going to achieve their goal of making Obama a one term President with a great fundraising yet essentailly authoritarian candidate such as Rick Perry. Ron Paul with his consistent libertarian message is doing well. He does not understand it, but he has Marshall Mcluhan on his side and an old media blockbuster will not.
Sunday, August 14, 2011
Thomas M. Hoenig, Retiring as President of the Kansas FED RES Bank
Too bad. Mr. Hoeing has been a lone voice in the Federal Reserve looking to break up TBTF banks into smaller entities that fail with no ill effect on the taxpayer when they act imprudently. It's unfortunate that his views are out of touch, possibly since Kansas does not cut much weight in the Federal Reserve, because they are what could save our financial system.
What's wrong with our banking system? First and foremost Wall Street Banks represents too big a percentage of the U. S. economic activity for what are essentially a bunch of cake eaters. The economy needs to shed highly compensed financial engineers that produce nothing and consume greatly. Ben Bernanke has studied the Japanese lost decade (decades?)and still does not understand that by protecting Wall Street and their bonuses that he is doing the same as Japan supporting its walking dead.
What's wrong with our banking system? First and foremost Wall Street Banks represents too big a percentage of the U. S. economic activity for what are essentially a bunch of cake eaters. The economy needs to shed highly compensed financial engineers that produce nothing and consume greatly. Ben Bernanke has studied the Japanese lost decade (decades?)and still does not understand that by protecting Wall Street and their bonuses that he is doing the same as Japan supporting its walking dead.
Tuesday, August 9, 2011
Evangelicals do not understand free market economies
Rick Perry of Texas is about to enter the Republican primaries for President and so we will have another Evangelical in the race. Republicans need to renew their commitment to free markets and capitalism which I postulate are libertarian versus God fearing fundamentalists who are authoritarian by nature. When a Perry or Bachman espouse a free market solution of reduced taxes, government and regulation to add supporters to their tent they create a conflict between authoritarian and libertarian ideals which will result in poor decisions. For example Richard Nixon had no real ideology other than Republican expediency. How else can you explain his putting in wage and price controls when he was President? In spite of rabid anti communism he couldn' have been more like one, authoritarian!
Tuesday, July 26, 2011
Reckless Endangerment
Gretchen Morgensen and Joshua Rosner's book exposes the central character of the great recession. His name is Jim Johnson and he ran Fannie Mae in the 1990's. He was the puppeteer who dangled Barney Frank and Chris Dodd to do his bidding. His henchman was Angelo Mozilo, his sponsor was Goldman Sachs and his victims are the American Tax Payer. What ever aspirations to greatness that James A. Johnson former CEO of Fannie Mae, Director of Goldman Sachs, Brooking Institute and The Kennedy Center of the Performing Arts had, this book thoroughly and irrevocably smashes it right now. This guy makes Bernie Madoff look like a Saint.
Besides marvelous character assassination richly deserved, this book makes very clear that "Government Sponsored Enterprises" such as Fannie Mae with one foot in government and the other in private enterprise is untenable. Fannie Mae took its unfair advantage of a government guarantee to lobby and secure additional advantages. It worked the books as shamelessly as Enron and Worldcom to enrich its executives. And it cynically got the ball rolling in a direction and speed that was sure to to end badly.
Besides marvelous character assassination richly deserved, this book makes very clear that "Government Sponsored Enterprises" such as Fannie Mae with one foot in government and the other in private enterprise is untenable. Fannie Mae took its unfair advantage of a government guarantee to lobby and secure additional advantages. It worked the books as shamelessly as Enron and Worldcom to enrich its executives. And it cynically got the ball rolling in a direction and speed that was sure to to end badly.
Sheila Baird interview with Joe Nocera NY Times Magazne
Hard to believe that there was a government regulator who got it.
“Do you really think they should have let Bear fail?” Asked Joe Nocera.
“Let’s face it,” Sheila Baird responded. “Bear Stearns was a second-tier investment bank, with — what? — around $400 billion in assets? I’m a traditionalist. Banks and bank-holding companies are in the safety net. That’s why they have deposit insurance. Investment banks take higher risks, and they are supposed to be outside the safety net. If they make enough mistakes, they are supposed to fail. So, yes, I was amazed when they saved it. I couldn’t believe it. When they told me about it, I said: ‘Guess what: Investment banks fail.’ ”
Saturday, June 11, 2011
Japan's Biggest Utility Faces Insolvency Risk
TEPCO, Tokyo Electric Power Company, is the on the verge of going under after failing so catastrophically to control their nuclear facilities that were swamped by the March tsunami on Japan. I mention this because an industry that managed to co opt its government, justice system and regulators as thoroughly as TEPCO did, finally destroyed it's shareholders. I believe it was management complacency that pushed short term decisions that ultimately bet the company's existence. Similarly BP's offshore drilling disaster came from complacent management which now risks the independence of the company and a good portion of its shareholders capital. Last year BP made a desperate high stakes deal with Russia which is now falling apart because of Putin's cavalier attitude over private property and the rule of law. I don't think it will be long before BP is bought by another major.
In both cases short cutting prudent precautions in spite of government regulatory and judicial approval did the company and its shareholders no good.
In both cases short cutting prudent precautions in spite of government regulatory and judicial approval did the company and its shareholders no good.
Blocking Elizabeth Warren
Joe Nocera's editorial today in the New York Times regarding resistance to Elizabeth Warren's nomination to the Consumer Financial Protection Bureau reveals the Republican's ideological conundrum, they express free market support for banks that are too big to fail. Mitch McConnell and most Country Club Republicans support starving the newly formed bureau and then let the concentrated banking sector, the large players not the home town banks, run wild with the consumer.
As Libertarian I am against the need for Dodd Frank and the new bureau being formed by Elizabeth Warren but only if the Too Large to Fail Banks are all split up into pieces that they become small enough to fail without harming our economy. It would be a great Teddy Roosevelt moment in Republican history if Mitch and his Senate colleagues would give up their efforts to block and or stall financial regulations and counter propose a sweeping culling out of duplicative financial rules, agencies and congressional committees along with a simple rule that any bank reaching a certain level of assets be required to split into completely separate entities. I doubt the GOP Senators, other then Rand Paul, have the ideological fortitude to wrap their arms around such a quid pro quo exchange when the bank lobby holds so much sway over the Republican Party.
As Libertarian I am against the need for Dodd Frank and the new bureau being formed by Elizabeth Warren but only if the Too Large to Fail Banks are all split up into pieces that they become small enough to fail without harming our economy. It would be a great Teddy Roosevelt moment in Republican history if Mitch and his Senate colleagues would give up their efforts to block and or stall financial regulations and counter propose a sweeping culling out of duplicative financial rules, agencies and congressional committees along with a simple rule that any bank reaching a certain level of assets be required to split into completely separate entities. I doubt the GOP Senators, other then Rand Paul, have the ideological fortitude to wrap their arms around such a quid pro quo exchange when the bank lobby holds so much sway over the Republican Party.
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