Scary Perry

Rick Perry's money raising power and “pay to play” Texas culture makes him a scary crony capitalist. I say that Texas has been prospering because of high energy prices and that its economy is doing well in spite of Governor Perry. The contrast between Ron Paul, another Texan, and Rick Perry could not could not be starker. One doles out the people's money to his favored friends while the other would be sick to his stomach being a part of such a sham.  

$50 a Barrel Tax on imported oil

We have an economic malaise of no confidence. Capital is readily available but no where to apply it. What is a country to do? The tax proposed in the title is counter intuitive, but let me postulate that a large cash inflow into the U.S. Treasury will raise confidence and that this inflow may not create much if any outflow from consumer's pockets. This is because the world crude oil market will drop on lesser demand on the margin and speculators will leave the world market further deflating prices. It's very likely that world oil price will drop to $50 leaving the U. S. consumer at the same $100 level prevalent now which will also keep domestic alternative energy investments and oil and gas drillers from suffering and it makes much more sense than promising a $2 a gallon gas price.

Marshall Mcluhan

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.

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.

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!

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.

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.’ ”