Tuesday, February 23, 2010

Kangaroo America

"Subpoenas Hit Toyota on the Eve of Hearing", Wall Street Journal, Tuesday, February 23, 2010, page A 4.

The appearance of conflicts of interest, said the Democrats at one time, is as important to eliminate as are the conflicts of interest themselves. Is it not an overwhelming appearance of conflict of interest when the United Auto Workers union-controlled so-called "U. S. auto industry" and its Democrat toadies can establish such a barrage to weaken another "U. S. auto company" -- but a predominantly non-union one? It is clear to most reasonable Americans that the rules of commerce in America have changed with this administration and Democrat-led Congress. The Rule of Law is out. The Constitution is so last century. Free enterprise? Who needs it? No wonder individuals are trying to hang onto whatever money they have, keep operations lean and not expand nor buy. America is run by Partialitists, those who are partial to one over another. It is arbitrary and anti-business. It is damaging America, American business and American jobs.

And those subpoenas? Is it bad luck that they were issued by Obama's Securities and Exchange Commission on the eve of the hearings? Or coincidence? Or a highly-coordinated conspiracy?

The leaders of the pack against Toyota? They are Democrats from union strongholds like Michigan and California. And how did they treat Toyota's response to the National Highway Traffic Safety Administration's complaints? "… [S]eriously deficient…" write the U. S. House of Representatives' Energy and Commerce Committee Chairman, Democrat Waxman from California, the chairman of the Committee's subcomittee on oversight, Bart Stupak, a Democrat from Michigan and Transportation Secretary Ray LaHood, ostensibly a token Republican but working for a Democrat. But that's only one hearing. Also piling on are the House Oversight and Government Reform [sic] Committee and the Senate's Commerce, Science and Transportation Committee. That letter from Waxman, Stupak and LaHood also criticizes Toyota's engineering report as having "major flaws". Senators, Congressmen have you even read Toyota's response and report? And, finally, the entire process will likely enrich 1) trial lawyers with whom Toyota will likely be forced to settle; 2) Democrats, again, elected in part by the huge contributions of the afore-mentioned trial lawyers and 3) trial lawyers a second time for whom tort reform is quashed by the afore-mentioned Democrats.

The SEC goes after Toyota for, among other issues, "improper disclosure or misleading statements made to investors". But without any presentation of evidence, couldn't the media blitz by the Democrats be considered improper or even misleading?

All of this smacks of a Kangaroo Court, parroting those called by Eliot Spitzer, most or all of which were thrown out of court.

But wait!  There's more.  The Federal Bureau of Investigaton "visited" three U. S. offices of Japanese car-parts makers as part of an international investigation for anti-trust.  Makers were raided in Japan and Germany, too. 

And the final blow to the Constitution? Innocent until proven guilty. The Democrats and Obama's government seem to care not about guilt or innocence, much less facts. They attack with a vengeance those they do not like and they don't wait for evidence, scientific or otherwise.  But one wonders: If Toyota allowed its unionization, would the government suddenly backtrack?

So Sorry Al

This blog just wants to send a note to Al Gore and all his cronies who have made billions of dollars by gaming Green.  Al, his "venture capital" partners, and I am certain hundreds or thousands of "investors" who hitched to the wagon of Government Green should see their investments tank as the Green Religion is outed as a sham.  A raw political power-grabbing scheme.  Green is sinking in not only public attitude, but many scientists are saying, "So sorry we made a mistake".  All the investments made in wind, solar, electric vehicles, batteries, biofuels, and ethanol should plunge in value.  Not immediately because the politicians still will accept campaign contributions and support in exchange for them continuing taxpayer-funded subsidies, as has clearly happened with ethanol.  But now taxpayers are wising up.  The Tea Parties are one indication.  Democrats being shown the door in November will be another.

Oh, yes, our note to Al:  "Sorry, Dude your scam didn't work, hope you get to keep your jet, mansion and a couple billion."

The President still a Whirling Dervish.

The Whirling Dervish President, Barack Obama, in a desperate attempt to prove to the country, Democrats and most importantly, to himself,  that he has some power left, is regurgitating healthcare "reform".   This time he believes that price controls are the answer.  No matter they have been tried by Democrats and Republicans in the past and have utterly failed.  Utterly.  With this latest pathetic scheme, the federal government would establish some authority to arbitrarily preempt all state health insurance commissions and dictate to state-chartered health insurance companies what they should charge in premiums.  Obama and his "authority" would arbitrarily decide and establish what these so-called "free market"  health insurance companies should charge and when price changes are too high.  It is clear that Obama doesn't have a clue that states have some rights, as the Constitution says.  Questions his "constitutional law" understanding.  And the arbitrariness of his commission absolutely goes against the Rule of Law, a key foundation of the economic success of the United States of America.  But he cares not for any of the economic success and wealth generation of free enterprise, he simply does not like health insurance companies.  That's enough for him.

Please go back and read my blog "The Whirling dervish to Failure, October 12, 2009.

Mr. Obama is out of control.

Tuesday, February 16, 2010

Professor Blinder with his blinders on.

Wall Street Journal OPINION FEBRUARY 15, 2010, 6:48 P.M. ET It's Time for Financial Reform Plan C

Can't everyone at least agree on a resolution authority that would prevent another Lehman or AIG?


About a month ago on this page ("When Greed Is Not Good," Jan. 11), I worried that the financial reform boat was taking on water and in danger of sinking. Since then, legislative prospects have grown progressively worse.

First came the election of Sen. Scott Brown (R., Mass.), otherwise known as "41" to signal the impossibility of breaking a filibuster on a party-line vote. Then came the Supreme Court's outrageous campaign-finance decision, which will strengthen the hands of industry lobbyists who were doing quite well already. That same day, President Barack Obama shuffled the deck by embracing what he called the "Volcker rule" on proprietary trading by banks and the permissible size of financial institutions—two ideas his own Treasury Department had previously rejected.

Finally, in case you thought you still detected a pulse, Republican senators slammed the door on any bipartisan reform bill, embracing yet again the "just say no" strategy.

Doing nothing to safeguard the financial system after what we've been through would be a disgrace. So what can be salvaged from the wreckage?

Let me start with the two most pressing issues: systemic risk and resolution authority.

I don't think any sentient person denies the need for an agency responsible for overseeing system-wide risks, no matter where they emerge. The disagreements come over to whom to give this authority. I have long thought it should be lodged in the Federal Reserve. So, not surprisingly, does Fed Chairman Ben Bernanke. And so, more or less, do the Treasury and the House. But Sen. Christopher Dodd (D., Conn.) objects to giving the Fed additional powers. He wants to clip its wings instead.

There is good news here. If Congress fails to act, the Fed will, by default, continue to be the tacit systemic risk monitor and regulator. Given the searing recent experiences, our central bank will neither ignore this responsibility nor assume that someone else is doing the job. Of course, memories will fade. So it would be far better to give the Fed this responsibility explicitly—in law. But if congressional paralysis continues, we'll get the right solution anyway.

Not so with resolution authority. Nearly everyone agrees there should never be another Lehman or another AIG. In the first case, the government practiced tough non-love, let the firm file for bankruptcy, and then watched in horror as the financial system started imploding. In the second case, the government saved the company (and the system) by putting taxpayers on the hook to the tune of $180 billion. Though diametrically opposed, those two policy decisions were both horrifying. However, should a financial giant start failing today, congressional inaction leaves regulators with those same two options.

Here we do need a legislative fix—one that gives regulators a third way, between bankruptcy and bailout, that would either euthanize these institutions peacefully or resuscitate them under new management. That's what "resolution authority" is all about.

Rumor has it that Republicans and Democrats on the Senate Banking Committee are—or is it were?—close to agreement on this thorny-but-essential issue. Ladies and gentlemen, could you possibly stop bickering long enough to give us a tightly-focused bill that accomplishes this one objective? Mr. Obama, could you please shame Congress into doing so?

Next on my reform list would be the proposed Consumer Financial Protection Agency (CFPA). It is clear that one major contributor to the subprime mess was that unwary consumers were duped into mortgage products they should never have touched. And it can happen again. So I think the CFPA is an essential addition to the regulatory tool kit. But hardly any Republicans agree. My advice on this one to Democrats? Demagogue the issue unmercifully. Portray Republicans as defenders of those who would cheat consumers and permit another subprime debacle. My advice to Republicans? Cave in rather than let Democrats paint you into such a corner. (Don't worry. Neither party ever follows my advice.)

That brings me to the Volcker rule on proprietary trading which, I guess, is: Don't let depository institutions do it. Let me start with a confession: My admiration for Paul Volcker is boundless; he is truly a great man. When Mr. Volcker talks, people should listen. And I could not agree more with his underlying goal: to stop traders from gambling with taxpayers' money.

That said, I am waiting to see if what is really the Volcker "idea" can be translated into a workable Volcker rule. It is devilishly difficult to draw bright lines between proprietary trading and trading, hedging, and market-making on behalf of clients. Mr. Volcker himself said that "you know it when you see it," suggesting an analogy with pornography. The problem is, often you don't.

Furthermore, the firms that take the biggest proprietary trading risks are not banks at all—or at least not real banks, with depositors and all that. (I am not naming names.) Yet some of these firms are too big to fail, whether we like it or not. If they gamble and lose big, we taxpayers may find ourselves on the hook again, which is why we need resolution authority. So I'm waiting for the details of a fleshed-out Volcker rule. After that, we'll see if anyone can convince 60 senators of its wisdom.

But what to do until that glorious day arrives? Bank regulators have the power to judge certain instruments and trading practices riskier than others. They do not need congressional approval. They should use this authority to impose higher regulatory capital charges and closer supervision on trading in riskier exotic assets, especially those not traded on organized exchanges. While that would fall short of the Volcker rule, it would help—especially if capital charges are substantial and eyebrows are sternly arched.

There are many other financial reform issues, but my space and your attention are limited. The overriding message is this. Plan A died long ago, and Plan B is gasping for breath. It's time to prepare Plan C.

Mr. Blinder, a professor of economics and public affairs at Princeton University and vice chairman of the Promontory Interfinancial Network, is a former vice chairman of the Federal Reserve Board.

My Letter to the Editor Response:

Mr. Blinder continues to have his blinders on. The cause of the "subprime meltdown" which led to the near-collapse of the world financial system, according to Mr. Blinder and his left-wing cronies is the stupidity of the citizenry of the United States of America. ("…unwary consumers were duped into mortgage products they should never have touched.") Well first, I disagree that consumers are all so ignorant they were able to be duped. Mr. Blinder and most Democrats do, indeed, consider that American consumers are so stupid, they need handholding by a big government. Only government is honest, businessmen are not. But let's give Mr. Blinder that. Now, sir, do you believe voters were equally as stupid as to be duped by Barack Obama, who arguably misled them? Or, sir, are consumers stupid but voters intelligent? why don't Democrats -- President Obama included -- just announce to the citizenry/consumer/voter -- because they are all one in the same -- that they are stupid and forget all this "equality" stuff? The only intelligent thing, Professor Blinder, you wrote is "(Don't worry. Neither party ever follows my advice.)"  And for good reason!

Theodore M. Wight

Monday, February 15, 2010

Weather models OK, mortgage models NOT.

Models that fortell the future of the world climate, and its cause in human activity are accurate, says the Liberal/Progressive/Social Justice/Democrat self-serving special interest group.  Why?  Simply because they say it's "proven science" and, of course, gets them to the result: control, control over economies and people.

But a far-less complex model, the same Liberal/Progressive/Social Justice/Democrat self-serving special interest group announces, that of securities whose principal-amount value is secured by mortgages on residences in the United States of America, cannot be accurate and its inaccuracy was the cause of the so-called "Sub-prime Meltdown" which led to the near-demise of the American economy.  And the necessity, the absolute need, for the same self-serving special interest group to take control of banks, financial institutions, automobile manufacturers, and direct the economy toward what they know to be proven science, Green Stuff.

In summary:  the world's climate model is accurate in all it's impossible complexity of inputs, while the far, far simpler model of mortgage-backed securities, is not.

Go figure.

Tuesday, February 2, 2010

The President's Budget

The President's Budget

1.  Increase Taxes
2.  Increase Government
3.  Hurt Business

The president of the United States of America seems to be forcing its decline.  Or he is an absolute economic ignoramus.  Or he is an absolute Left-wing idealogue. 

Budget Summary:

Commerce Department:  -36%
Justice Department: -13%
Synopsis: less business, less justice

Energy Department:  +7%
Education Department:  +6%
State Department:  +6%
Synopsys: more pet liberal spending

Government workers:  + 15%  (Over Obama's two years)
Synopsys: duh!

Surprise: VA: +7%

Monday, February 1, 2010

Center of free-enterprise: Washington DC

Center of free-enterprise: Washington DC.

Well,  there is little free-enterprise left in America, but the center of commerce in the United States of America is Washington, District of Columbia, USA.  The latest proof of this is in the activities of the new Chief Executive Officer of the largest consumer banking institution, by deposits, in America, the Bank OF America.  Mr. Brian Moynihan has been CEO for all of one month.  During this time has Mr. Moynihan been visiting his employees in his bank's wide-spread branch system?  No.  Has he been holding meetings with his aforementioned employees?  No.  Has he been gathering together his executives and strategizing how to re-start consumer and small-business lending the country needs so desperately?  No.  Likely, he's been visiting major customers.  No.

Mr. Moynihan has been visiting the center of 'competitive' activity in this country:  Washington, DC.  Visiting with Ben Bernanke, chairman of the Federal Reserve System; Timmy Geithner, President Obama's Secretary of the Treasury; Sheila Bair, chairwoman of the Federal Deposit Insurance Corporation; John Dugan, Comptroller of the Currency; Deputy Treasury Secretary Neal Wolin; Valerie Jarrett, President Obama's "advisor" on Socialist Activities or something.  But America aside, Mr. Moynihan jetted (commerical no doubt) to Davos, Switzerland, to meet Jean-Claude Trichet, European Central Bank chief and attended the World Economic Forum.  Hey, Bri-bri what about business?

Mr. Moynihan is a lawyer.

He donated primarily Democrats' campaigns, including Chris Dodd and John Kerry.

Before taking office he told Ms. Jarrett and Lawrence Summers, top White House economic aide (whom Mr. Moynihan met at Harvard) that he wanted to work with the White House to help it achieve its policy objectives, according to the Wall Street Journal, February 1, 2010, Page C 3.  They said, "loan modifications" (sort of like "plastics" to Dustin Hoffman in 'The Graduate').  And his bank became the first to enable Obama's administration's pandering to those taken advantage of by big, greedy, immoral...banks...by modifying as servicer the bad loans made by it and others. 

Mr. Moynihan's global strategy chief and marketing officer, Anne Finucane, who came with the new CEO from B of A's acquisition of FleetBoston Financial, is close to the likes of Christopher Dodd (D., duh, Conn.) Senate Banking Committee Chairman and Barney Fife, err, Frank, (D., for Democrat from Massachusetts) House Financial Services Chairman., but not too close, as he's gay, and apparently House Oversight and Government Reform Committee Chairman Edolophus Towns (Democrat, dontcha know, from N.Y. What kind of a name is 'Edolophus'?).

Mr. Moynihan's two predecessors, Hugh L. McColl Jr., and Kenneth D. Lewis actually had the gall to want to compete in the marketplace, with McColl building the bank through canny acquitisions and Lewis eschewing political gamesmanship enough to resign.  Perhaps also he didn't contribute to Democrats in general and Obama in particular so got pressured to resign.  Perhaps.

To all who are reading this: America's so-called 'Capitalism' is now running on Favoritism, Partialism and Equalitism from Washington  DC. where both the Capitol and Capital are.  President Obama and Democrats have taken the ISM out of Capitalism.