Archive for ‘Ben Bernanke’

June 18, 2009

WTF happened to ‘caveat emptor’?

Poking around the Web, I noticed lots of liberals whining that Obama’s massive new financial-industry regulatory scheme — which analysts worry will suck the profits out of banks — doesn’t go far enough.

Let’s face it, liberals won’t be happy until there are more regulatory bureaucrats than there are bankers. You’ll walk into your bank to cash a check, and three federal regulators will have to sign off on the transaction, with another regulator assigned to decide whether your kid gets a lollipop.

Don’t believe me? Liberal blogger Simon Johnson:

But based on what we see so far, there is little reason to be encouraged. The reform process appears to be have been captured at an early stage — by design the lobbyists were let into the executive branch’s working, so we don’t even get to have a transparent debate or to hear specious arguments about why we really need big banks.
Writing in the New York Times today, Joe Nocera sums up, “If Mr. Obama hopes to create a regulatory environment that stands for another six decades, he is going to have to do what Roosevelt did once upon a time. He is going to have make some bankers mad.”

OK, so who exactly is Simon Johnson, and who put him in charge of deciding whether banks are too big? Well, ho, ho, ho:

Simon Johnson, former chief economist of the International Monetary Fund, is a professor at the MIT Sloan School of Management and a senior fellow at the Peterson Institute for International Economics. He is a co-founder of The Baseline Scenario. Update (April 2009): Johnson has joined the CBO’s Panel of Economic Advisers.

Johnson worked for the IMF which certainly gives him credibility to talk about banks being too big, eh? As for experience in the for-profit private sector, we have zero evidence that Simon Johnson could turn a profit on the sno-cone concession in Hell.

Which brings me back to the original question: WTF ever happened to caveat emptor?

Banks are not in business to minimize your risk, but to maximize their own profits. Ditto mortgage companies, real-estate agencies, stock brokers, mutual funds, et cetera. I don’t care whether you’re transacting business with Citibank or a pawn shop, the guy on the other side of the counter is there to turn a profit, and it isn’t his job to look after your interests — except insofar as his reputation for trustworthiness helps him attract customers.

Economic Nerf-World
You got scammed by Bernie Madoff? You bought Citi at $54 a share and now it’s at $3 a share? You mortgaged yourself to the max for a new Vegas condo in 2005, based on your salary at a development company that got wiped out when the Vegas real-estate boom evaporated in 2007?

Whose fault is all that, huh? Why is it the job of the federal government to cover the economy in foam Nerf padding like a McDonald’s Playland so that you never suffer for your own financial stupidity?

Liberals want to make the financial sector so “safe” that I could hand my paycheck to my 10-year-old son, let him invest it in Nintendo games and baseball cards, and still be guaranteed a profit.

Not that I don’t empathize with economic losers. I made the clever decision in 1986 to go into the newspaper business, which hasn’t exactly been a juggernaut of growth lately, as you might have noticed by the fact that I’m now shaking the tip jar for blog-o-bucks. (Despite their expressions of concern for boosting economic recovery, Tim Geithner and Ben Bernanke ain’t hittin’ my tip jar.)

Compared to some other people, though, I’ve been relatively unscathed by the meltdown. I know retirees who lost hundreds of thousands of dollars in the Big Wipeout of 2008, not to mention all the people I know whose jobs are directly linked to the devastated housing market.

Poverty As Security
I might have lost my butt, too, except for the fact that I had a lot less butt to lose. Couldn’t afford a D.C. condo during the bubble, you see, so I’m still renting, 12 years after we sold our little Georgia bungalow and moved to Washington. So boo-hoo-hoo for the idiots who are upside down on their mortgages, and boo-hoo-hoo for the fat cats who thought Bernie Madoff was going to make them rich.

Becoming a journalist was, in retrospect, a stupid career move, but maybe I’m not quite as stupid as some of those guys who got rich doing something else and then pissed it all away on bad investments. Why should the federal government intervene and deprive us of future opportunities for schadenfreude?

If you went to the county fair and let a carnie hustle you out of $100, do we need a Federal Bureau of Ring-Toss to protect you from yourself? Maybe a federally-mandated advisory sticker on every video-poker machine at the Indian casino: “WARNING: Winning Not Guaranteed.”

Maybe caveat emptor has gone by the wayside because schools don’t teach Latin anymore. So let’s go ahead and ditch E Pluribus Unum while we’re at it. Try a new slogan in English: “Never Give A Sucker An Even Break.”

A sucker is born every minute. You see the suckers every time you walk into a convenience store and have to wait in line behind some fool who requires five minutes to complete his lottery-ticket purchase: “OK, give seven of the Pick Three and five Powerballs . . . yeah, right, now give me six each of Lucky Lady, Pot O’ Gold . . .”

The 401(k) Lotto
You’re reading a blog post about economics and financial regulation, so when you find yourself in that all-too-familiar convenience-store scenario, you almost certainly look down your college-educated nose at the poor idiot throwing away money on lotto tickets.

So, tell me, how’s your 401(K) been performing the past couple of year, Mr. Smart Guy? And how much cash-in-hand would you walk away with, if you had to sell your house tomorrow?

If you’re one of those whiny pukes who wants Uncle Sugar to fix the economy so that you don’t ever suffer a loss on your investments, so that you’re guaranteed permanent employment and health care and retirement security, I despise you far more than you despise that chump buying $37 worth of lotto tickets and a pack of Newports. At least those Newports are worth something, compared to a lot of mortgages brokered by Fannie Mae and Freddie Mac.

My idea of “financial reform” is to pull the plug on this bailout/stimulus/regulation/subsidy racket and let some overprivileged Smart Guys get first-hand experience in the virtuous poverty they’re always admiring from a safe distance.

Given the record of previous Democratic administrations, I’d say it’s an even bet that Tim Geithner goes from Treasury secretary to federal prison inmate, so maybe when he gets out of Leavenworth . . .

Well, he’ll sure have a new perspective on the barter value of a pack of Newports, won’t he?

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(Get daily financial and economic news updates at NTCNews.com. And hit the tip jar, you swine.)

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June 15, 2009

‘Experts’ Euthanize the U.S. Economy

What does the long-ago death of a matinee idol tell us about the likely results of Obamanomics? Glad you asked!

Actual science involves the ascertaining and application of facts, with the knowledge that there are more facts in the universe than any person can ever possibly know. The pseudo-religion of Science, by contrast, involves the belief that “experts” already know all the important facts, and that much of what we normally call “common sense” is contradicted by the facts most recently discovered by these experts, who constitute the high priesthood of the cult of Science. . . .
Think about how, when Timothy Geithner’s nomination as Treasury secretary was before the Senate, we were told that Geithner — who couldn’t even correctly calculate his own income tax — was nonetheless the only man in the country who could save our economic fortunes. Even Republicans praised Geithner, with Sen. Orrin Hatch of Utah calling him “a person of great integrity.” . . .
Last week, financial analyst James Quinn portrayed Geithner, President Obama and Federal Reserve Chairman Ben Bernanke as the Larry, Curly and Moe of an economic slapstick routine that would be hysterically funny, if only the consequences weren’t so predictably tragic. . . .
We should hardly be surprised that the journalistic priesthood sings the praises of the economic priesthood, even as Dr. Larry, Dr. Curly and Dr. Moe proceed to administer to the American economy the kind of Science that the surgeons provided to the late Jeff Chandler.

Read the whole thing.

UPDATE: The DJIA was down 200 points at noon. Maybe some “squirrels” are getting wise to the game.

UPDATE II: Somewhat related: Liberal mathematics.

June 8, 2009

Economy: Up, Down or Sideways?

Just got back this morning from Atlanta, where the economy sucks. The ripple effects of the housing meltdown are being felt especially hard in my hometown, which is national headquarters for Home Depot, a regional hub of banking and transportation, and site of a large number of undeveloped developments.

When I got back, my first task was to prepare the Monday morning business report for NTCNews.com. Mixed signals from the markets, but there was this weird New York Times story about “underlying tensions” among Obama’s economic advisers:

By all accounts, much of the tension derives from the president’s choice of the brilliant but sometimes supercilious Mr. Summers to be the director of the National Economic Council, making him the policy impresario of the team. The widespread assumption, from Washington to Wall Street, was that the job would be Mr. Summers’s way station until the president could name him chairman of the Federal Reserve when Ben S. Bernanke’s term expires early next year.
But Mr. Bernanke’s aggressive response to the crisis has so improved his reputation that people close to Mr. Obama increasingly suggest the president could well reappoint him in the interests of financial stability — just as Presidents Ronald Reagan and Bill Clinton retained Fed chiefs who had been picked by predecessors of the other party.
As for Mr. Summers, even as top administration officials acknowledge the occasional strains among economic advisers, they say the president is thrilled with the job Mr. Summers is doing in his current post.

Read the whole thing. Basically, it’s a round-robin of anonymous leakers trying to get rid of Larry Summers. And I’m appalled that Bernanke’s stock has actually risen in the past four months. I didn’t like Bernanke when he was Bush’s Fed chairman, and nothing he’s done during Obama’s tenure has improved my opinion of him.

That the anti-Summers cabal is praising Bernanke for being “aggressive” reminds me of my private-sector economist buddy who, two weeks ago, shook his head and said, “They’re trying to re-inflate the bubble!”

It appears to me that Team Obama (which includes the MSM) is playing an expectations game with the economy, trying to convince us that a recovery is underway. Unemployment is nearing double digits, the bond market is signaling higher interest rates, and given what I saw during my Atlanta trip, I’m deeply skeptical about the near-term economic prospects.

However, those are merely my opinions, and the numbers are whatever the numbers are. The Nikei was up this morning, which usually signals a good day for U.S. stocks, so don’t let my gloom spoil your day. Maybe I’m just suffering the opposite of “irrational exuberance.”

UPDATE: Charles Lemos at MyDD says Summers ” is viewed with suspicion on the progressive left” and describes him as “a right-of-center economist,” which is to say he’s not Paul Krugman or Robert Reich. Exactly what does an economist have to do before he’s not “viewed with suspicion on the progressive left”? Maybe if Larry Summers decapitated a few bankers on YouTube . . .

UPDATE II: Jehuda says:

Looks like the Left is going to need a bigger Sorosphere.

Heh.