Why do they blame the bankers?

Embedded in l Wallison's WSJ article is the source and answer to the question: Why do they blame the bankers?   There's way too much mis and disinformation floating around out there and this article and the books written on the subject by Wallison, and others mentioned in previous blogs, go a long way to clearing the air and setting the record right.  Bottom line:  the bulk of the blame resides where it always does, with the policies of the government as ordered by the political class.  Period.

ADDED: Joe Nocero, liberal NYT business columnist, begs to differ with Wallison and Pinto here.  But he does so with narrative and very little in the way of specifics.  The protection of Freddie and Fannie by the congressional liberal cabal of Barney Frank and the CBC, duly noted elsewhere on this blog, is evidence of Nocero covering for his fellow liberals.

Who's behind the demonstrations

In answer to the anti Wall Street, anti capitalism demonstrators in lower Manhattan and around the country, the WSJ offers a logical, sensible, rational explanation here, essentially ending their piece by suggesting the demonstrators should move south 200 miles to find the real culprits in Washington.  But is there more to this whole movement than meets the eye?  A previous post provided some evidence that there is a serious plan behind the demonstrations that has direct and indirect links to the White House.  In view of Obama's past as a community organizer trained by Saul Alinsky, and in view of many of the radical connections of many of his czars and other appointees in his administration, these so-far tenuous links to the White House probably should be taken seriously.  In addition, one has to wonder about the timing of these demonstrations, alleged to be "spontaneous" while actually occurring 6 months  after Obama's  precipitously plummeting approval ratings in the polls and 6 months after Obama declared war on the plutocrats on Wall Street the wealthy in general.  Its almost as though the plan is for artillery bombardment to soften up the enemy as phase one to be followed by the assault of the ground troops as phase two.  Coincidence or planned event a la Alinsky?  Perhaps this line of thinking gives too much credence to conspiracists who too often cry "wolf".  On the other hand Obama's past associations and family (both parents socialists), his staff and political appointments(specifically Van Jones, a self avowed communist), his power moves to pass Obamacare, $800 billion stimulus,  driving up the cost of energy ( $4.00 gas at the pump) to push the socialists Green Revolution,  the EPA plan to dramatically increase regulations and add 200,000 more federal enforcers, his cozying up to dictators and authoritarian regimes (concomitantly stiffing allies), his unqualified support for unions (sent one-half the stimulus billions to bail out local community municipal workers unions), and last but far from least his campaign promise to be a transformational president, and one has the grounds for at least speculating about the "spontaneity" of this OWS "movement".

Another Nobel economist with feet of clay

Here a quote from Instapundit blog:

"Speaking before a group of protesters in Zuccotti Park, Nobel economics prize winner Joseph Stiglitz urged on the crowd, telling them they are “right to be indignant.” Professor Stiglitz goes on to explain, correctly in my view, that we have a financial system of socialized losses and privatized gains.

What the good professor fails to mention is only a few years ago, for what I understand was a nice paycheck, he was denying this very fact. In 2004, along with Jonathan and Peter Orszag, Professor Stiglitz wrote a paper for Fannie Mae in which he “estimated” that the “risk to the government from a potential default on GSE debt is effectively zero.” The paper goes on to argue “that the expected cost to the government of providing an explicit government guarantee on $1 trillion in GSE debt is just $2 million.” Now I understand his Nobel is in economics, not math, but $2 million sounds no where near the actual cost so far of $160 billion.

Certainly there was a time where some could be forgiven for not really understanding the nature of Fannie and Freddie, but this was published after Freddie’s accounting scandals came to light and while Fannie itself was being investigated.

So yes, you do have a right to be indignant. Especially at those “academics” who sold their work to the highest bidder defending the system and now pretend to be shocked at how everything turned out."

Ah yes, just another  "expert" is exposed with feet of clay.

Out of Control Compensations

There is justifiable concern in many quarters (including this one) over the often outsized bonus and compensation packages on Wall Street, Corporate America, and even in the professional sports world.  Ten, fifteen, twenty million dollar bonuses and annual sports contracts makes one wonder if the system isn't overloading the pay to producers to the detriment of capitalism,  the only successful and productive economic system for raising living standards the world has ever known .  It's a complicated and difficult issue but at least the extreme compensation we are talking about here is occurring in the private sector where the discipline of profit and loss are at work and owners who permit this compensation can always change it whenever they want.  Outsized compensation packages in the public sector is quite another issue since we're talking about something paid for by taxpayers who can't change what they don't know about.  We all know about the relatively large salaries and retirement benefits (perhaps not by Wall Street standards) paid out to federal lawmakers and sundry federal employees, but transparency regarding  the compensation of city managers,  heads of local community fire, police and other departments is virtually nonexistent.  Some information about this subject has been leaking out recently about abuses about some small towns in California that have gone bankrupt. City managers receiving compensation packages valued at well over 500 thousand dollars per year, firemen and police officers and penitentiary guards with upwards of 200,000 annual salaries plus generous retirement benefits, and so  forth.  One school in Orange County, California, Brandman University, a subsidiary of the better known Chapman University, several years ago created a master of public administration program to study various cities' compensation plans for employees.  This story in the Orange County Register provides major insights about what's going on with public service employee compensation these days and it's not a pretty picture.  To understand what's at the bottom of the constantly rising tax burden, begin by understanding the consequences of these city employees's compensation packages.  It is not a wonder that the majority of graduates of the vaunted California higher education system pick government work as their first career choice.

OWS (Occupy Wall Street)

The movement called OWS (Occupy Wall Street) is a collection of unemployed (unemployable?) losers who are steadily gaining momentum in other parts of the country.  The way to measure the seriousness of this "movement" is to see what happens when the weather turns and the malcontents become uncomfortable.  In the meantime one has to speculate on why all of the sudden this "movement" sprung up.  Newt Gingrich is on record as suggesting this is the result of Obama's beating up on Wall Street since his poll numbers started cratering about a year ago.  This particular explanation makes sense at least from an historical standpoint.  Usually when unrest and discontent starts to get out of hand in totalitarian regimes, the dictator finds a bogey man to occupy the thoughts of the masses and deflect their anger against him.  Gingrich is right about this.  Obama approved the bailout of Wall Street and he willingly accepted (and accepts) big contributions from this quarter.  But he clearly decided that they make the most defenseless target to attack since they were bailed out, still pay themselves outsized bonuses, plus the work force is not unionized and lives infinitely better than the democrats core constituency. Easy envy target.  James Taranto here in the WSJ captures some of the essence of this strategy.  The biggest danger is that the "movement" spirals out of control and violence erupts, which of course the radical left would like and will probably do everything they can to abet.

ADDED:  This Surber post indicates the so-called demonstration has taken another turn, this time much for the worse.  Some investigations have turned up the information that this is the work of the swame WTO crowd who trashed Seattle a few years back, as well as a union connection and even a possible al-Qaeda one based on  intel provided by Andrew Breibert's website.  This is getting interesting since there are also links to the WH via the union activities.  Typically radicals either orchestrate and or take-over "movements" and turn them in the direction they want, so that "Protests" can evolve into opportunity to take down the existing government.  Those radicals are at work here.  Democrats supporting this stuff are definitely playing with fire that may in the end consume them if these various ties of this OWS crowd to known radicals prove to be the case.  Time will tell.

FDR's depression and turnaround

The key to understanding how the country came out of the Great Depression of the '30"s lies in reading certain economists' explanation and avoiding the deeply flawed liberal historians's account. Liberal historians typically want to give credit to all FDR's collectivist programs, i.e., NIRA, NLRA, et al., when the opposite is the case.  Once these failed experiments were overturned in the courts and voluntarily by the administration in 1938-39, productivity and employment began to rise.  As pointed out in this WSJ piece the real recovery was well underway, and unemployment was declining, well before the out break of WWII.  Roosevelt's programs actually retarded the recovery and prolonged the suffering and unemployment by several years at least.  The Austrian economists, von Mises, Hayek, Rothbard and others predicted this outcome but were shouted down by "interventionists", collectivists and all the other charlatans who promoted government solutions to solve the perceived shortcomings of capitalism and the free enterprise system.   In reality all the GD proved was the more the government interferes in  the free market, with credit creation, employment programs and the like, the worse things get.  Some people never learn, witness the Obama administration, and for that matter the Bush administration that preceded it.

The pathology of the liberal media

Of all the stars that lined up right for the election of Obama, none was bigger or brighter than the craven MSM and its irresponsible reporting, or lack thereof.  This post by Scott Johnson of Powerline is but one of countless examples of the liberal media's, aka MSM, failure to perform its basic role as watchdog for the people.  Unarguably had MSM thoroughly vetted Obama's past associations, political and personal, instead of white washing them, it is unlikely he would have fooled as many people as he did.  As it was, the MSM papered over and refused to dig into all the troubling people and events in this weird candidate's past. Voila, we are stuck with a radical and incompetent head of state for at least four years.  In this particular case of malfeasance and abject dereliction of responsibility,  the Minneapolis Star Tribune virtually ignored the obviously illegal establishment of a Muslim religion based private school supported by tax payers.  Were it not for the work of Scott Johnson and the lone conservative investigative reporter, Katherine Kersten, on the staff of the Trib, this important story would never have seen the light of day, and the stealth Muslim invasion of our free society would have continued on its merry way.  If ever there was cause to award a Pulitzer Prize for investigative journalism, this one is a slam dunk.  Wanna bet  she doesn't even get nominated for one by the uber liberal Pulitzer Committee?

Hayward on Hayek

Once again Steve Hayward treats us to a mini lesson on the Austrian School of von Mises and Hayek debunking the  
usual misinformation and disinformation bunkum put out by the left, in this case Nation Magazine.  It's hard to figure why the left continues to play this dishonest game now that we have blogs like Powerline available to call out their nonsense.  Most likely it's because having no coherent ideas (all theirs having failed repeatedly) how to accomplish anything in society that makes sense at this point in time, they are left with no other role than trying to tear down those ideas that have been proven to work.  This continual rewriting of history does nothing but hasten the demise of their cause, which is a good thing.