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Whiskey, Drugs, and Guns

Daniel Greenfield writes The Guns of Obamerica in his blog The Sultan Knish, 1/20/2013.

Excerpts:

Reformers in the twenties blamed the plight of the slums on the availability of liquor. They rammed through Prohibition for the entire country to fix the cities. The liquor went on flowing and the slums went on being slums. Gun control has been just as successful in healing the slums as whiskey control was. And like the dry reformers, gun control advocates insist on trying to apply their solution on a national level, when the problem is not nationwide.

This country does not need to have a conversation about how many bullets should go in a clip. It does need to have a conversation about how many parents should go in a family. It needs to talk about the ghettos of Obamerica and have a serious conversation about broken families and generational dependency. It needs to have a conversation about funneling new immigrants from broken parts of the world into areas already suffering from high levels of unemployment and street violence.

Not all of Obamerica is broken, but a lot of it is. Obamerica has a big gap between the rich and the poor. Its middle class is always on the run. Its upper class retreats to fortresses. Its lower class is broken and constantly growing as its political machines feed off human misery and exploit social dysfunction to gain votes.

Most of all this country needs to have a conversation about the direction it’s headed in. We need to set aside the same old tired social justice rhetoric that has done nothing except train .001 percent of the young men and women of Obamerica to be community organizers and race card wielders and have a serious conversation about what is wrong with New Orleans, Detroit and Chicago.

HKO

Two excellent points. Liquor, drugs or gun control avoids the real problem; social dysfunction enabled by well intended but misguided public policy.  Secondly such problems may be localized but in the nature of sensationalized media seem national.  It is not those who cling to their guns and bibles that cause the social problems; it is those who are protected and insulated from the consequences of their own decisions.

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Who Has Really Unchained Wall Street?

From the Daily Caller, Report: Cronyism, political donations likely behind Obama, Holder failure to charge any bankers after 2008 financial meltdown,8/7/12, by Matthew Boyle.

Excerpts:

In the report, GAI details how the George W. Bush and Bill Clinton administrations both actually took down financial criminals — unlike the Obama administration. Between 2002 and 2008, for instance, GAI points out how a Bush administration task force “obtained over 1,300 corporate fraud convictions, including those of over 130 corporate vice presidents and over 200 CEOs and corporate presidents.”

“Clinton’s DOJ prosecuted over 1,800 S&L [savings and loans] executives, senior officials, and directors, and over 1,000 of them were sent to jail,” GAI adds.

But, despite having “promised more of the same,” especially in the wake of the 2008 financial crisis, the Obama administration’s DOJ has not brought criminal charges against a single major Wall Street executive.

“By the fall of 2011, Obama had collected more donations from Wall Street than any of the Republican candidates, and employees at Bain Capital had donated more than twice as much to Obama as they did to [Mitt] Romney, the firm’s founder,” GAI wrote in its report.

“In the weeks before and after the Senate report on Goldman Sachs, several Goldman executives and their families made contributions to Obama’s Victory Fund and related entities and some contributors maxed out at the largest individual donation allowed, $35,800.”

“No other modern administration has staffed the DOJ with big money fundraisers,” GAI wrote. “Holder bundled $50,000 for Obama’s 2008 campaign, while Perrelli, West, and Mason all bundled $500,000 for the campaign. West also helped Obama raised an estimated $65 million in California.”

GAI president Peter Schweizer told TheDC that cronyism appears to be infiltrating the halls of the DOJ with the Obama administration, and that it appears Holder’s team has no interest in fighting for accountability when it comes to Wall Street because he, Obama and the rest of the DOJ team have a financial interest in not enforcing those laws.

HKO

Read the whole article.

This is a stunning revelation.  This administration which has never stopped blaming others for its failures has proven to be the most corrupted cronyist administration in decades.  Biden stupidly accuses Romney of “unchaining Wall Street” and the press doesn’t blink. The only failure greater than the administration’s is the media’s lack of willingness to openly confront this incredible ethical and moral lapse.

Obama bundler and ex NJ governor Corzine was not charged with any crime even though over a billion dollars of client money was improperly used.  It is not a crime to lose money on bad trades such as under Jamie Dimon at JP Morgan, but is inconceivable that this much money was destroyed using improper co-mingling of customer funds with no one in the firm held accountable.

PS

My apologies for mindlessly using practically the same title from American Thinker article by Jean-Claude Croulx which also sourced the Daily Caller

PPS

Why no Wall Street Bigwig has been prosecuted

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Understanding the Meltdown

(this was published previously in the Macon Telegraph)

Being in the middle of a record economic crisis presents a rare learning opportunity.  Several books are worthwhile for those seeking to understand what just happened.

Too Big to Fail by Andrew Ross Sorkin details the action of the Fed under Benanke and Treasury under Paulson during the crisis period between August and December.  While Geitner as head of the New York Fed was also featured the central player of this crisis was Hank Paulson.

Monumental decisions involving billions of dollars of assets were made in days, sometimes hours.  Both Paulson and Geitner had a sense that the market was due for a correction long before the crisis hit, but they probably did not see it coming as fast and as broad as it did. Bernanke noted that just as there are no atheists in foxholes there are no ideologues in economic crisis either. Neither Republicans or Democrats wanted to bail out Wall Street , but the crisis dictated actions that were against the grain of capitalists of both parties.

Paulson worked tirelessly to find appropriate merger partners for weak players like Merrill Lynch, Wachovia, and Lehman.  He almost had Barclays ready to buy Lehman when the British Financial Services Authority ( FSA) refused to approve the acquisition/merger because of the risk it brought to the British financial system.

Lehman was singular in the fact that it was not acquired or bailed out and thus had to go bankrupt.  Part of this was timing; Congress was just in no mood to bail out a Wall Street player.  Part of the reason was George Bush’s cousin who worked for Lehman and his brother Jeb’s association with the firm. Such close political relations probably worked against the interests of the firm.

In retrospect bailing our Lehman’s may have forestalled the panic that engulfed the rest of the system. With Bear Sterns gone and now Lehman’s gone, depositors wondered who was next and there began a run of the other banks like J.P Morgan and Morgan Stanley.

While Paulson’s association with Goldman was suspect the fact was he had to severe his tie and sell his stock ($485 million worth) in order to take his job at Treasury. Since his actions were so scrutinized he was careful to avoid even conversations that would indicate favoritism toward his old firm.

The most difficult decision was to bail out AIG whose credit default swaps acted as insurance against many of the cdo’s (collateralized debt obligations) that infected the financial markets. As the underlying assets plummeted in value AIG was downgraded and had to put up more capital that it could not provide.

Having to make such massive changes and decision in such short time meant that perfection was not obtainable. Barney Frank justifiably wanted some assurance that compensation to the executives would suffer from their misdeeds, but there simply was not enough time to rule of thousands of contracts during the time period that decisions had to be made.

Wall Street clearly engaged in risks it did not understand, but neither did the regulators such as Greenspan and his successor Bernanke. Complicated risk models gave the CEO’s delusional certainty, but eventually the party came crashing down for the same reason all bubbles burst;  lack of trust and confidence.

But Sorkin spends little space getting into the detail of the causes of the crash and suitably stays focused on the urgency and the actions required in response. 

For more information on the background that caused the crisis I recommend The Housing Boom and Bust by Thomas Sowell,  Financial Fiasco by Johan Norberg, most of all After the Fall: saving Capitalism from Wall Street – and Washington by Nicole Gelinas.

Sowell and Norberg focus more on the misguided Government fiscal and monetary policies that inflated the housing bubble, but Nicole Gelinas also analyzes which good regulations were unfortunately removed (and by who) and which bad ones were inappropriately applied.

A crisis of this nature required the perfect storm of many great errors to all focus their retribution at the same time. Unfortunately the media large engages in partisanship and demonization and few people will take the time to understand what happened and why.  It is complicated but engaging the problem reveals basic principles of sound policy that were violated as they were in previous bubbles.

History repeats itself but never the same way.

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Why Obama’s tax incentives for small business will backfire

President Obama proposed to give tax incentives to small businesses to hire more people. This sounds like a generally good idea, unless you happen to have any practical experience which  is sorely lacking in this administration.

Read full article at American Thinker

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