10 Fishy Government Moves = Corruption or Stupidity?
A fishy pattern is coming to the surface of the financial crisis, and the creators seem to be the U.S. government.
Whether the ‘fish’ is clean enough to eat, or stinky enough to expose corruption and throw away remains to be seen.
Consider:
1. Alleged Threats: Headline Saturday on EconomicPolicyJournal.com proclaimed “Chrysler Hedge Fund Attorney: White House Threatening My Clients.”
White House
A lawyer for the White House reportedly denied the aforementioned allegation. See ABC News’ Jake Tapper’s Sunday post, White House Denies Charge By Attorney that Administration Threatened to Destroy Investment Firm’s Reputation.
2. Alleged Pressure: Did former Treasury Secretary Henry M. Paulson Jr. and Federal Reserve Chairman, Ben S. Bernanke, pressure Bank of America CEO Ken Lewis to go through with the acquisition of Merrill Lynch and keep mum on Merrill’s large losses until the additional government bailout was finalized? Attorney General Andrew M. Cuomo of New York has investigated the matter. From Dealbook:
Though Mr. Cuomo said in his letter that testimony from federal officials largely supported Mr. Lewis’s testimony, a full account of the events is not clear. Mr. Cuomo did not release other testimony.
However, consider:
Representatives for Federal Reserve Chairman Ben S. Bernanke and Henry M. Paulson Jr., who was secretary of the Treasury at the time, denied that they ever advised Mr. Lewis on disclosure issues. A representative for Mr. Paulson said he did not dispute any of the attorney general’s characterizations of his conversations with Mr. Lewis. Mr. Bernanke has invoked the bank examination privilege and declined to testify about the Fed’s role.
Peter J. Hennings, a professor at Wayne State Law School who specializes on issues related to white collar crime, blogged about the alleged government pressure on Bank of America on the Deal Professor. Hennings writes:
“This raises serious questions whether the government caused the company to violate the federal securities laws.
3. Naked Opportunism: Pres. Barack Obama’s chief of staff, Rahm Emmanuel, said “Never let a serious crisis go to waste. What I mean by that is it’s an opportunity to do things you couldn’t do before.”
4. Runaway Spending: $3.5 trillion FY2010 budget has been approved by Congress, and the Democratic majority and Pres. Obama seem unconcerned that the U.S. debt will triple in 10 years.
5. More Spending: The $850 billion stimulus bill was voted on and passed by Congress Feb. 13, and not one member had the opportunity to read the 1588 page bill. Pres. Obama painted a dark and scary picture to the American people if the stimulus bill was not passed pronto. Obama opined in an op-ed in The Washington Post that the stimulus package was an absolute, immediate, must.
“This recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse,” Obama wrote in the op-ed titled, “The Action Americans Need.”
Well, hate to point out the obvious, but unemployment is already at double digits in some states. We’re getting into huge debt so that we can get out of the recession?
6. No Cutbacks, but still more Spending: $410 billion omnibus bill containing 9,000 earmarks sailed through, passed the Senate March 10, and was signed into law. Seems the majority of Congress can’t fathom cutting spending.
7. Fearmongering: The TARP bill, passed Oct. 2, 2008, gave unprecedented power to then Treasury Secretary Hank Paulson to allocate $700 billion to buy troubled assets at financial firms.
8. ‘Wal-Mart Stimulus:’ Let’s not forget the $168 billion Economic Stimulus Act President George W. Bush signed into law on Feb. 8, 2008 in hopes of preventing a severe recession. Many households received $300-$1200 checks as a result of this stimulus. Too bad the $168 billion was wasted — it’s clear a severe recession was not averted. However, Wal-Mart certainly profited from the government giveaway.
9. Funding Victory?: Encased in the $850 billion stimulus bill are sweet treats for Obama’s supporters, including the infamous ACORN. Obama is funneling up to $5.2 billion in taxpayer money to groups who helped elect him–under the umbrella of the so-called stimulus bill. ACORN is one of the groups who will be helping conduct the census in 2010.
10. Cap & Trade Scheme: This is a tax, plain and simple. Pres. Obama thinks he can make everyone go green by making it so expensive to use traditional fuels, that you have no choice. No carrot, only a big stick.
Errr…is that day-old tuna I smell? The Obama administration seems intent on punishing businesses — which create wealth and jobs.
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There are no serious questions. There’s no conceivable consequence for the present degree of interference by the govt into business, and since the stock market is cheering it, it’s bound to continue. The stock market is not only discounting a recovery, it’s discounting a massive boom. Economic policy has been outsourced to Goldman Sachs.
Cap and Trade
After Cap and Trade was explained to me, it took several months to figure out the best objection to it.
First the explanation given to me.
You are in charge of everything relevant here, you can tax and make laws. You know that there are four categories of business: businesses that are high polluters and high producers; there are high polluters and low producers; low polluters that are high producers; and low polluters that are low producers.
Taxing one group would cripple the economy because it would destroy it. The same with two or three. All four also makes you unpopular.
Q. What to do since the government must have money and business must survive?
A. Create a new business. Each business would be given–by the government–a number of credits for each pollutant(not transferable between pollutants) which could be used, saved, or traded. There would also be a different kind of business or businesses which would–by contract with the government–do the cleanup required for all of the credits.
In countries where one pollutant was more of a problem, less credits would be given. This would essentially compel trade with other countries.
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Objections
The first is effect is that there become businesses which have a negative product and therefore makes money from the government. The absurdity is simply too much.
The second is that if every corporation had the same amount, dummy corporations could be set up and traded with. It would not even be a boon for small businesses, though it would seem so on the surface: being swamped with paperwork is not good for a mom and pop store; even less, as they find out that their store produces such a large footprint that it is hard to sell credits to the giants. Thus the economy will be harmed
The third is that if the credits are distributed according to the number of employees, small and medium sized businesses will be destroyed and a good chunk of the economy will be destroyed.
Setting aside that problem
The fourth is that for the plan to work to its fullest, it must be international and have full cooperation on all levels. Historically, this is absurd. Just look at the U.N., which for all of its aspirations and intents is mainly an expensive joke.
The fifth is that it requires two new variables to be entered into the incredibly complicated equation of economics/politics. Since the two variables are related to each other and unknown, the only way to know for certain whether cap and trade is a good idea is to test.
Now, essentially everything in the idea has been tried before and has failed. Since destroying one or more business sector would destroy the economy, and as shown above cap and trade destroys sectors of the economy, cap and trade is not the answer to economic woes.