Crony Capitalism

In Defense of Wall Street A**holes

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Long time Democrat turned Republican Donald Trump, who as a business titan relied more than any of his opponents on “Wall Street” funding, decisively won the Republican primary. In sharp contrast, socialist Bernie Sanders decisively won the New Hampshire Democrat primary by attacking his opponent’s Wall Street ties. Trump supporters apparently believe that the way to deal with Wall Street a**holes is a bigger a**hole who will negotiate much better deals, whereas Sanders supporters believe that “Wall Street (a synonym for the entire US financial system) is a fraud” requiring major extractive surgery.

Most people within the NY financial community including the numerous mid-town asset management firms agree that many Wall Street players were a**holes during the sub-prime lending debacle leading to the 2008 financial crisis, but surely the Sanders pitchfork brigade wouldn’t travel uptown. This may explain why among the thousands of books and articles written in the aftermath of the financial crisis and the Occupy Wall Street movement, Wall Street hasn’t defended itself and has found few defenders willing to go public.

Truth be told, Wall Street has always attracted more than its share of greedy a**holes. But historically they discriminated against the less profitable investments in favor of those that had the highest return potential relative to risk. This represented the brains of a heartless US capitalist system. Defenders of capitalism correctly argue that it is the only economic system at the base of all human economic progress, however unequally distributed. Progressive critics argue for greater equality, the poor made poorer so long as the better off are equally so (although this is not the way it is typically represented).

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National Review goes Bananas

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National Review has now gone off the deep end on Donald Trump.

This strikes me as fear and panic but about what ?

But he is not deserving of conservative support in the caucuses and primaries. Trump is a philosophically unmoored political opportunist who would trash the broad conservative ideological consensus within the GOP in favor of a free-floating populism with strong-man overtones.

Cue pearl clutching. What exactly has “the broad conservative ideological consensus” achieved the past 20 years ? Personally, I think Reagan began the problem by choosing Bush for his VP. Bush was antithesis to Reagan’s message and had ridiculed his economic plans.

Sam Houston State University historian, writing on the Forbes web site, has a very odd blog post this morning. He criticizes MIT economist Simon Johnson for attributing the term “voodoo economics” to George H.W. Bush. Domitrovic calls it a “myth” that the elder Bush ever uttered those words. “You’d think there’d be a scrap of evidence dating from 1980 in support of this claim. In fact there is none,” he says.

Perhaps down in Texas they don’t have access to the Los Angeles Times. If one goes to the April 14, 1980 issue and turns to page 20, one will find an articled by Times staff reporter Robert Shogan, entitled, “Bush Ends His Waiting Game, Attacks Reagan.” Following is the 4th paragraph from that news report:

“He [Bush] signaled the shift [in strategy] in a speech here [in Pittsburgh] last week when he charged that Reagan had made ‘a list of phony promises’ on defense, energy and economic policy. And he labeled Reagan’s tax cut proposal ‘voodoo economic policy’ and ‘economic madness.'”

It’s amusing to see people try to deny facts. Some argue that Bush did not oppose “Supply side” theory. Still, that is what “Voodoo Economic Policy” referred to. What else ?

Bush promised “no new taxes” in 1988 but then raised taxes in 1990 creating or deepening a recession that cost him re-electiion and gave us Bill Clinton.

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Is the Ryan budget the last gasp of the public employee unions ?

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As usual. Richard Fernandez has a unique view of current events. He compares the present federal government to Boss Tweed’s Tamany Hall.

But in actuality the impetus for moderating political excess often comes from the elites themselves when mismanagement finally becomes so bad it threatens the survival of everyone.

Until things reach the point of failure mismanagement has the effect of leaving voters no alternative but content themselves with the opposition party. Republican voters may have been disappointed and outraged at the perceived sellout by a Paul Ryan-led Congress to the Obama administration. “It was another Republican “compromise” meaning Democrats got every item they asked for,” said the Drudge Report.

Paul Ryan has engineered a “compromise” with Democrats that gives them everything they wanted.

Today, he defended it on Meet The Press.

And in divided government you don’t get everything you want. So we fought for as much as we could get. We advanced our priorities and principles. Not every single one of them, but many of them. And then we’re going to pick up next year and pick up where we left off and keep going for more.

Is this true ? I doubt it.

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Trust

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A society as huge and complex as the United States can run economically only on the basis of acceptance and trust. This has been true for so long it is no longer noticed, like the air. People accept the rules and generally follow them whether or not there is a policeman in attendance. …. All over the the land people go about their business secure that arrangements will be honored and carried out. A high-trust society is a low-cost society.

Wretchard, at the Belmont Club

Of all that has changed over the last decade in the general culture of the United States, I wonder if a widespread loss of trust in the political, media, intellectual and bureaucratic establishments is the most quietly catastrophic of all the damage done to our society of late. It is axiomatic that once trust in an individual, a friend or a spouse is lost, it can almost never be regained; one of those things which is easily, almost casually done, never to be completely repaired. I suspect that we will discover over the next few decades that the thinking and observing portion of our society will never regain that unthinking trust in our institutions, now that we have seen them become weaponized in open and politically partisan ways. We have observed the national news media become politically partisan, more intent on hiding matters of significance than informing the public about them. What doesn’t appear above the fold, so to speak, or even in the back pages is sometimes more revealing. And the hate for ordinary American citizens in flyover country, frequently expressed by those residents of the wealthy bicoastal enclaves has been mind-boggling. There are personalities who have been so casually offensive in this regard that I have made it a point to avoid patronizing with my pocketbook anything that they have had anything to do with. I suspect that I am not alone in this it’s another element of that ‘cold anger’ that I wrote about some days ago. How has it come to be that the so-called ruling elite of a nation now appear to hold their fellow-citizens in such deep contempt? (This contempt has begun to be returned with interest of late, although the ruling elites are predictably mystified by such quiet demonstrations as in the Chick-Fil-A appreciation day, the failure of certain lavishly promoted moves and TV shows, and heavily attended Tea Party rallies of a few years ago.)

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Here We Go !

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ghost

I have been pessimistic for several years. That may be just my own psychological makeup but I am not the only one.

California is getting a bit agitated about what is happening in China.

Gyrations in the stock market have taken California’s fragile finances for a ride before — when the dot-com bubble burst, when the Wall Street crash sank the national economy less than a decade ago.

So when the market continued its dive Monday, state officials began glancing around for their seat belts.

More than most states, California depends heavily on taxes from the wealthy, pulling about half of its income tax revenue from just 1% of residents in recent years.

California is a top down society because it depends on income tax. Texas doesn’t and its state government is funded by sales tax, which everyone pays, even illegals.

The Obama Administration has been playing a Ponzi Scheme for years.

A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator.

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