The Trust Economy

In my fourth article for this audience, posted almost a year ago, I addressed the importance of trust to an economy. In light of the roilings of the week it is time to revisit that concept.

In the World Bank study on which my original article was based one finds that the world's richest nations have economies in which the vast majority of wealth can't be traced directly to tangible assets. In the United States such tangible assets as land, buildings, crops, and machinery account for as little as one fifth of the country's measurable wealth. The rest resides in such things as education, an effective and trustworthy judicial system, widespread social and political skills, and, most importantly, a generalized trust that permits people to feel that their efforts at serving the needs of others will be rewarded with the service of their own needs.

Events such as the collapse of major financial guarantors like Fannie Mae and Freddie Mac erode that fundamental trust. This erosion happens in two major ways. First, the events surrounding the actual collapse change the rules of the economy in general. Ordinary citizens not closely attuned to the workings of the economy get the sense that they don't know how to work the economy's controls. For a trust economy to function smoothly common folk must feel reasonably secure that their efforts will be rewarded similarly from one day to the next. Market upheavals that rapidly change the requirements for securing credit, for example, damage that security.

Secondly, as a Washington Post examination of the history of the two mortgage giants has shown, collapses of this kind really are the natural result of attempts to violate fundamental principles of the functioning of efficient markets. In this case the very structure of the companies themselves made them appear immune to the need to avoid stupid risks. They had the implicit backing of the Treasury. They couldn't fail. Indeed, as the Post article states-

"The companies increasingly were seen as the engine of the housing boom. They were increasingly impervious to calls for even modest reforms. ...
...But the report concluded that severing government ties with Fannie Mae and Freddie Mac would harm the housing market. In unusually colorful language, the budget office wrote, 'Once one agrees to share a canoe with a bear, it is hard to get him out without obtaining his agreement or getting wet.'"

Thus the companies became the focus of loan guarantees on loans no sane financier would make in a circumstance where default meant he would lose HIS money. The mortgage giants could secure funds at much lower cost than competing private companies who had to get funds in real markets that could fail. That inherently squeezed out competition. Much of this decade's housing boom was artificially floated on a foundation imagineered out of the presumed infallibility of these giants.

When the least little blip in the economy showed, however, that this artificial floor had inflated housing prices to the point they could not be supported in resale equity the trust in the artifice collapsed and "real", market based values put a stark light on the whole sham.

Both political parties have been trying to make hay of this crisis. The truth is, though, they both danced together to produce it. Democrat political pressure greatly expanded pressure on the mortgage giants and, through them, on private lenders to use them as, in essence, charitable lenders to Democrat constituencies. Two former Fannie Mae CEOs have been deeply involved in the Obama campaign. Republicans have sought all through the last six years to portray the artificial housing boom, and the strength it added to the economy, as the product of their "sound" economic policy. If either side didn't like what they saw they were both perfectly willing to let it go as long as it didn't blow up on their watch.

Events such as this show there are distinct roles for both government and private business and overlapping those roles is a dangerous gamble. Private enterprise is good at operating markets. Government can assist this process by clarifying and regulating those markets. When government attempts to operate within the market, though, it can't resist giving itself an advantage and clouding the tranparency needed to assure efficient, much less honest, markets. From the power plants of Cernobyl to the coal mines of China to the formerly nationalized automobile manufacturing industry of Great Britain one sees the same lesson taught over and over. When government decides to participate in the productive side of the economy it cheats, covers up, and, eventually, harms people and fails badly. This erodes the trust that is the vast majority of the economy's value.

There is more to come on the importance of trust in economics.

Posted by Lee Emmerich Jamison at September 20, 2008 12:57 PM
Comments
Comment #263633

So, this whole meltdown is the fault of fannie mae and freddie mac? I really, really don’t believe that.

Posted by: womanmarine at September 20, 2008 1:12 PM
Comment #263688

My understanding is that this meltdown was caused by the policies put into place by Phil Gramm, under the Bush Administration back in the year 2000.

Posted by: Anonymous Democrat at September 20, 2008 2:38 PM
Comment #263714

Lee, you can thank John McCain’s economic adviser Phil Gramm and Jim Leach, both Republicans, for the Gramm-Leach-Bliley Act, which allowed this consolidation and mergers of financial institutions and lines of business to occur, which you now offer in the form of a WaPo article which stipulates these institutions grew so large as to be capable of avoiding oversight and regulation.

While it is true that Bill Clinton signed this bill into law in Nov. of 1999, and Democrats in Congress went along in exchange for Republicans giving them stronger provisions in the Community Reinvestment Act and certain privacy concerns, they were not Ph.D’s in economics. Phil Gramm was. He knew the potential risks of this venture to override the Glass Steagal Act, but he was also a representative for the banking industry which had been calling for this change since the 1980’s.

It was only after Republicans gained a majority in one house of Congress that overturning the Glass Steagal act became a real possibility. This current extremely debilitating crisis was Republican sponsored, Republican nurtured by Greenspan and Pres. Bush in their attempt to create an ownership society regardless of cost America’s future economic viability, and the Republican lobbyists for the financial industry which knew Republicans would be more than happy to turn a blind eye to faulty and deplorable measures to grab the profits while the grabbing was good.

McCain still relies on Phil Gramm for economic education, and Phil Gramm is the first architect of this near meltdown. There is NO WAY to defend McCain’s candidacy if voter’s become aware of this history of the current crisis.

You can fact check my comments here, I welcome it. The facts will hold up.

Posted by: David R. Remer at September 20, 2008 6:19 PM
Comment #263715

Lee -

Democrat political pressure greatly expanded pressure on the mortgage giants and, through them, on private lenders to use them as, in essence, charitable lenders to Democrat constituencies.

And your reference for this is…what?

You point out two former executives of FM and FM working with the Obama campaign…but there are EIGHTY-THREE Wall Street lobbyists who are on McCain’s staff. Splinter and log, indeed.

I can back up that statement, Lee - can you back up yours?

Posted by: Glenn Contrarian at September 20, 2008 6:25 PM
Comment #263729

The Democratic posters here and across the country continue to sing in unison like a choir that this is all the fault of Phil Gramm.

And how do they demonstrate this? By saying the words “Gramm-Leach-Bliley Act” again and again as if those words have some kind of magic talismanic power than supersedes all logic and argument.

The only thing that’s still missing is any cogent explanation of how the Gramm-Leach-Bliley Act and the diversification of financial institutions caused massive borrowing and loaning against bad mortgage-based securities during a housing bubble, and how that led to a credit crisis.

Of course, that would require an understanding of basic economic realities—something that is a lot more difficult to demonstrate than simplistic partisan sloganeering.

Posted by: Loyal Opposition at September 20, 2008 11:49 PM
Comment #263732


L.O.: What other choice do the liberals have? They know that they are supporting a gaggle of corrupt politicians from Obama on down. They are trying to gain the upper hand on the other corrupt party.

Both parties have no other option but to attack the other as corrupt, out of touch with the people and bad for the nation. Both parties are telling the truth.

Posted by: jlw at September 21, 2008 12:41 AM
Comment #263750

jlw,

“Both parties have no other option but to attack the other as corrupt, out of touch with the people and bad for the nation. Both parties are telling the truth.”

I’m a republican, and i can see that. one has to wonder why the dem posters on this site still refuse to see that. IMO we don’t have much of a choice this election cycle. we’re screwed either way.

Posted by: dbs at September 21, 2008 9:16 AM
Comment #263751

No matter how you paint it, we’re all in it now. Taxes will have to be raised to pay our skyrocketing national debt. Or chicken out and risk killing our economy down the road, either on our watch or our children/grandchildren’s watch. Very patriotic, wouldn’t you say?

Now, I have several rules that I live by: don’t borrow money unless you have assets to cover the loan should something go sour; don’t cheat on your wife; don’t cheat, period; be good to your mother and father; don’t lie except when your wife asks you if that dress makes her look fat;… and this one that applies today:

NEVER feel sorry for people who have more money than you do. CEO’s and other officers make (no make that RAKE) millions of dollars off the companies that they oversee (aren’t they supposed to look out for the stockholders?) stuffing an average of 350 times the average worker pay into their pockets. OK, it’s all legal… but they way I see it, there’s no reason that we shouldn’t tax the fool out of people who earn that much per year… more than they’ll ever need. Now, I fall under the group that Obama wants to tax. Yes, the wife and I make enough. But are we becoming so selfish that living a great life is not enough for us? Do the wealthy want it ALL????

And don’t give me that stuff about killing investments. Where are they going to put their money? Under their mattress?

America needs to rebuild our middle class. We must pay for our wars, our bailouts of private firms, quit subsidizing loans to the wealthy, penalize companies who avoid taxes by using off-shore accounts, give incentives to shareholders in companies which keep employees in the States, use the presidential bully pulpit to inspire Americans to build and conserve wealth, invest in savings and American owned businesses, encourage those wealthy (we’re talking hundreds of million or billion dollar wealthy, here) CEO’s to quit putting it in their pockets and put it in businesses and manufacturing jobs in the high unemployment areas, then we can put hard limits on government handouts - to the poor and the wealthy alike.

Or we could just let the ultrawealthy get wealthier and the poor poorer. Prepare for lots of security guard jobs to keep yourself safe… oh, and like they do down in some South American economies… make sure you pay your guards well enough that they don’t kidnap you for ransom.

Posted by: LibRick at September 21, 2008 9:26 AM
Comment #263757

LO

Of course, that would require an understanding of basic economic realities—something that is a lot more difficult to demonstrate than simplistic partisan sloganeering.

I think phx8 demonstrated a rather high level of economic understanding over in the left column in regards to your questions. He clearly laid out the facts for you too see. Yet you continue to turn a blind eye to the facts. It seems to me that the problems you folks over here are experiencing is one that has been prevalent under Bush for all of almost eight years now. That would be denial of fact and lack of accountability. As they say the buck stops at the top. In this case it started with Gramm, grew under republican rule and peaked during Bush. Now the same person that all roads lead back to is McCain’s economic man. Sorry about that and too bad for McCain, but hey he is the one who chose to surround himself with republican slime.

Now all of us working class people who have been suffering higher taxes by way of inflation under Bush are now guaranteed even higher taxes for years to come because of failed fiscal policy. Eight years of republican fiscal policy has created a vastly huge economic downturn that is not over and will affect all of us for decades to come. I would like to thank the republican party and their wealthy handlers for all that good economic leadership that led us to this state of regression and inflation. Job well done! NOT!!!!

Posted by: RickIL at September 21, 2008 11:24 AM
Comment #263767

I’ll ask it again…Since the S&L bailout, has general welfare programs cost taxpayers more or less than corporate welfare?

Ronald Reagan…deregulation and union busting
Sam Walton…Union busting and China building
George W Bush…Incompetent, dishonest and dishonorable policies and actions
H Lee Scott…continued killing of American middle class

The above are the four greatest nemesis of America in our history. Collectively they beat out Hitler (WWII & The Marshall Plan), and Stalin (The Cold War) in economic damage done to our great country.

Posted by: Marysdude at September 21, 2008 12:47 PM
Comment #263774

It’s absurd on its face to blame this on Clinton. Republicans have been in charge for the last eight years, and this meltdown is the direct result of the lack of regulation Republicans promised would lead to boom times.

I notice your last article was about how America will always be rich, so long as we keep making the richer richer and richer. Well, we did it. We made the rich incredibly rich, and made it so that everyone else in this country is living off of borrowed money.

Posted by: Max at September 21, 2008 2:16 PM
Comment #263781

Double the tax rate for the highest bracket, and cut the capital gains tax in half. Plenty of money has been lent building unoccupied mcmansions and high end condos, but let’s but all bankrupt persons in jail, and send the rest back to the projects.

Posted by: ohrealy at September 21, 2008 3:21 PM
Comment #263788

Loyal Opp, I could explain it to you in detail, how the Gramm Act led to this, but, what would be the point? You wouldn’t accept Republican responsibility for anything negative no matter how air tight the case, because your comments demonstrate the same loyalist mimicking of your party’s propaganda as you accuse Democrats of.

In short, it opened the door for mergers and acquisitions across all lines of financial business which led to financial entities so large as to force the taxpayers to bail them out in order to salvage the economy.

But, you don’t want to hear logic, and facts. You want to hear that this was all FDR’s, Clinton’s, and Obama’s fault. I am sure you have many sources for that kind of fiction.


Posted by: David R. Remer at September 21, 2008 4:27 PM
Comment #263789

Sorry, ohrealy, but since the American tax burden has been relegated to the middle class, and the ineffective ‘drug war’ has filled the prisons with poor people, and the Cheney/Bush administration has caused only middle class folks to go bankrupt, there ain’t enough taxpayers left to build the jails necessary to imprison them.

Posted by: Marysdude at September 21, 2008 4:29 PM
Comment #263791

Both the liberal and independent posters here are showing a clear prejudice- totally ignoring the point of my post for the sake of a partizan agenda. Let me quote myself for a second-

“From the power plants of Cernobyl to the coal mines of China to the formerly nationalized automobile manufacturing industry of Great Britain one sees the same lesson taught over and over. When government decides to participate in the productive side of the economy it cheats, covers up, and, eventually, harms people and fails badly. This erodes the trust that is the vast majority of the economy’s value.”

It is a struggle, in the midst of a screaming fit on the part of the political poles, to get any truly revealing information on who is more at fault over the long haul. The best information I can get so far is that the real roots of the problems we face today are planted deep in the inflation-ridden days of the late 1970s.

It is clear that Republicans refused to use government to make the welter of novel financial instruments devised over the last decade more transparent. When people warned regulators of the dangers of these obscure devices they were ignored by the Bush administration. This was true even as Democrats sought to use their influence to prevent the agency charged with being the mortgage giants’ watchdog from having any real power to regulate them, either.

People on both sides of the government playing field were more concerned with which TEAM would win and neither gave a damn whether or not the field was on fire. That is what happens when we leave it to the government to save us from ourselves. They start to contend with each other over who gets control of the playing field (us) and forget to pay any real attention to us.

Government is the problem. It has over-participated and under-regulated. No matter whose team “wins” we lose if we can’t get them to understand that.

Posted by: Lee Jamison at September 21, 2008 4:35 PM
Comment #263795

Since taxes have come up one of the issues in the theme of the “trust economy” is the fact that not all of the “wealth” in the economy is convertable to stuff.

Assume half of the “wealth” is held by five percent of the population. “Wow!”, You may say to yourself, “I could solve the problems of the poor by only taking half of the half owned by the ‘rich’”. In fact, only about a fifth of the wealth in our economy even can be converted to stuff. Most of that, while it may be owned in some fashion by the rich, is actually used by the middle class to produce income.

What would result from the transfer, then, is the revelation that much of what we think is wealth can’t be converted from trust to anything useful by commandeering it from those who hold it, and that portion that is useful will be only rendered less effective in the wasteful, corrupt, hands of government. Tax away half of the wealth the “rich” have and you will only get inflation and economic devastation.

Posted by: Lee Jamison at September 21, 2008 4:52 PM
Comment #263798

Lee

Tax away half of the wealth the “rich” have and you will only get inflation and economic devastation.

And how would that be any different than where we are at now. At least the a—es would have to suffer with the rest.

How do you discern the difference between the wealthy and the wasteful corrupt hands of government. It is the parasitic wealthy that breed those corrupt government leeches.

No partisan agenda here Lee. Just disgust for a putrid party that has let this country down time and time again. As Obama would say. ENOUGH!!

Posted by: RickIL at September 21, 2008 5:10 PM
Comment #263801

>Tax away half of the wealth the “rich” have and you will only get inflation and economic devastation.
Posted by: Lee Jamison at September 21, 2008 04:52 PM

That has got to be the strangest thing I’ve read on this site…and, that’s really saying something.

We are in the middle of a ‘stagflation’ wherein inflation can’t catch up with job losses, and neither can catch up with corruption…and Cheneey/Bush has made sure the ‘rich’ don’t pay even their share of taxes. If it is this bad now…boy! If we actually taxed the rich we’d really be in trouble.

Thanks, Lee, for the positive outlook…

Posted by: Marysdude at September 21, 2008 6:11 PM
Comment #263802

RickIL,

Yeah…ENOUGH!!!

Posted by: Marysdude at September 21, 2008 6:12 PM
Comment #263843

Since, unlike so many others here, I am not out to defend a party (I have often voted for conservative or relatively conservative Democrats when their agendas made some sense.) but, rather, a philosophy, I have been seeking historical resources that would help to shed some real, non-partisan light on the issues we face today.

One paper in particular, from 1998, seems to hit closer to the head of the nail than any of the Democrat vs Republican crap currently clouding the information superhighways. It is an FDIC research paper going by the arcane title-The Rising Long-Term Trend of Single-Family Mortgage Foreclosure Rates* by Peter J. Elmer and Steven A. Seelig.

It’s a rather longish and dense paper discussing the puzzlement at the steady increase in mortgage foreclosure rates from 1950 through the middle ’90s. It’s consclusions, however, manage by a process of elimination to be pretty insightful.

“Although several traditional determinants of default, notably house appreciation and LTV, explain some portion of the long-term trend, they appear to stop short of explaining the more recent, and unsettling, rising trend. In an effort to explain the remaining portion of the trend, we have explored the notion that the incidence of shocks to individual lifestyles or “trigger events,” such as divorce, have increased. A related, but distinct, hypothesis is that the risk posture of individuals has increased, especially as individuals increasingly leverage their homes as part of a broader strategy of managing their overall wealth portfolio. Although evidence exists supporting both hypotheses, the risk posture hypothesis appears more consistent with a variety of disparate incentives and trends relating to household financial management.”

When Republicans in Texas were trying to force through so-called “reforms” to allow homeowners to take out second mortgages so they could cash out the equity in their homes, I had seen some of the results of this trend nationally and was wholeheartedly opposed to it. I was also totally against the revision of bankruptcy laws (for which Joe Biden voted, Dems…) because I knew it was not flaws in bankruptcy that were driving increases in consumer default. It was increased exposure of individual families to financial risk. That was made possible by a convergence of big government interests with big corporate interests- the peril of large organizations that have more in common with each other than any of them has with us.

Strangest things you ever heard? Try getting all your minds out of one of two deep partisan ruts. There is a whole muddy road up here. It’s hard slogging even for an open mind, but at least one can attempt to see past the walls of your enclosures.

Posted by: Lee Jamison at September 22, 2008 10:23 AM
Comment #263847

RickIL,
With this quote- “And how would that be any different than where we are at now. At least the a—es would have to suffer with the rest.” you simply prove that you are driven more by envy than you are by any desire to make things better. Historically, the triumph of those who want to make sure pain is distributed equally always wins more and different pain for the majority, even as it creates new priviledged elites.

Posted by: Lee Jamison at September 22, 2008 10:37 AM
Comment #263854

“Tax away half of the wealth the “rich” have and you will only get inflation and economic devastation.
Posted by: Lee Jamison at September 21, 2008 04:52 PM”

Lee do you mean similar to the fifties and sixties when the tax burden for the wealthy was really a tax burden yet the economy did extremely well. I know you like to rail against partisanship yet isn’t that exactly what this is, more party line propaganda? The fact is the uberwealthy can do just fine paying their fair share for a change. The fact is multinational corporations can survive without handouts from the people of this country.

Posted by: j2t2 at September 22, 2008 11:09 AM
Comment #263866

Incredible.

Absolutely incredible.

People defending the greed - for greed is exactly what it is - of CEO’s getting hundreds of times the salaries of the rank-and-file workers.

Know what, Lee? If the corporations didn’t have to pay their CEO’s so much, they’d have MORE to invest in things like research, marketing, advertising…the nuts and bolts that make the business SUCCEED.

Posted by: Glenn Contrarian at September 22, 2008 1:41 PM
Comment #263867

>Strangest things you ever heard? Try getting all your minds out of one of two deep partisan ruts. There is a whole muddy road up here. It’s hard slogging even for an open mind, but at least one can attempt to see past the walls of your enclosures.
Posted by: Lee Jamison at September 22, 2008 10:23 AM, but at least one can attempt to see past the walls of your enclosures.
Posted by: Lee Jamison at September 22, 2008 10:23 AM

Lee,

Am I to assume this article was written by an OPEN minded individual? (If we overtax the wealthy, the ones who lied to us and cheated us and took advantage of us, we’ll end up in a bad fix?)

I’m sorry, but I can’t see your point in this. Probably because I can’t afford to see out of my enclosure…

Posted by: Marysdude at September 22, 2008 1:53 PM
Comment #263868

j2t2,

One of the very interesting points in the article I quoted above was a HUGE (3+ times)spike in home forclosures from 1964 through 1967. It was totally anomalous as regards the general trend in home forclosures. Yeah, everybody who didn’t lose a home then probably thought it was a great time.

Glenn,

Where do you get that I’m defending greed when I’m attacking a partnerships between corporations and government? I am unequivocally anti-huge organization, government or corporate (for those who don’t realize they are the same thing).

I believe in small business. No billion dollar CEOs there. And I believe in maintaining a healthy antagonism between big government and big business. Just look at milk in China and you see what happens when we forget the dangers of letting the two sleep in the same bed.

Posted by: Lee Jamison at September 22, 2008 1:56 PM
Comment #263876

There is of course, a simple solution to Executive pay. Make it a percentage of corporate net profits, with a mandatory legislated cap, and with a reversal switch. If they oversee a corporation whose net profits drop by more than 25% or go negative, the execs owe a commensurate percentage of previous year’s pay back to the corporation’s shareholders.

It is elegant, simple, and very workable, and can be enforced through the IRS, not the corporation under the exec’s and Director’s rule. Competition is not stifled as all execs are capped at the same rate. In fact, this would make the talent pool for executive positions larger.

To enact it only requires political leadership capable of telling lobbyists to find a broom to hump instead of American consumers and taxpayers.

Posted by: David R. Remer at September 22, 2008 2:25 PM
Comment #263886

David,

The answer you’ll get from the corporate world and their governmental enablers will be that your idea drives talent to the international market. There are, of course, a number of foreign-born execs of American (a term I use advisedly) corporations. What prevents the talent from simply fleeing to international corporations or, worse, the corporations themselves fleeing (a la Stanley Tools)?

Posted by: Lee Jamison at September 22, 2008 3:52 PM
Comment #263890

You can put all the lipstick you want on this particular pig, it’s still a pig. The fact is, the War Party proudly presents you with this meltdown due to their criminal conspiracy with the vested interests of the US corporate scene. Of course the Repugnicans pursued this excuse for free market capitalism with a zealous fervour that would make a revivalist preacher blush. In fact, what you got was gangster crony capitalism, and that is what you are getting from this gangster crony capitalism bailout.

And no doubt the Defecatocrats, seeking populist cheers on main street with their pleas for foreclosure bailouts, will go along. Never mind that the government is now being handed over formally to the shysters who gave you this crisis. Never mind, continue on blissfully shifting the chairs on the decks of the Titanic. May each get what s/he truly deserves in the coming months and years, tho’ they probably won’t. As usual, the little guy will end up paying, and the parasites will scamper onto all the available lifeboats. As George Carlin said, “The reason they call it the American dream is because you have to be asleep to believe in it.”

Posted by: Paul in Euroland at September 22, 2008 4:40 PM
Comment #263900

If you don’t like doubling the income tax on the top bracket, how about a re-incorporation tax for companies located here that pretend that they’re offshore, or a federal property tax on all homes over 5000 square feet. The debt, the deficit, and now this bailout, are all Rpblcn owned and operated, and Rpblcns should pay for them I guess it would be discriminatory to have a specific tax on Rpblcns, but we should try to get as close to it as we can. W is deliberating screwing the next administration, and trying to do it quickly, to get it over before whatever the October surprise will be, so that one must really be the whopper.

Posted by: ohrealy at September 22, 2008 5:59 PM
Comment #263904

Paul in Euroland

Never mind that the government is now being handed over formally to the shysters who gave you this crisis

It was handed over eight years ago and reaffirmed four years ago by the dimwits who can’t see past sleazy campaign ads. And you know what Paul, you are absolutely right. The wealthy ruling class are going to be big winners here once again. They are taking advantage of a crisis to reshape our financial institutions to their advantage. Once again they are using fear to propagate a rush into careless action. Knowing full well that action will strengthen their grasp on the financial world. What is worse is that short of all out revolution there is not a damn thing we can do about it. Disgust is not an adequate descriptive of how I feel about this situation.

Posted by: RickIL at September 22, 2008 6:25 PM
Comment #263913

Here’s the way I look at things:
All economies ultimately derive from realities, and even the most complex economies have to deal with them. A reality may be a resource that exists in a foreign country, but not much in your area. Or it could be the other way around.

Realities also include the basic needs, and the auxiliary needs that technology places upon us, some of which become critical to our needs, and which have replaced former techniques of gaining food, water and other things.

We derive things upwards, going to barter, where we weigh the relative value of the goods themselves in exchange, to a market economy based on a scarce, known resource, such as gold.

We’re beyond even that, now, and the complexity brings us problems. Even in the old days, economic meltdowns could result from the interruption of certain supplies, the destruction of certain infrastructure. Now, though, we can add complex, emergent effects from the organization of the economy itself, and the symbolic instruments we use to negotiate it.

People talk about the free market, but they use a paradigm from a much more closely derived market economy, the kind that a Scotsman of the late 1700s might be familiar with. In truth, especially in America, the law and regulations around it unavoidably define much of what can and cannot be done by a business, and they are here to stay. The companies themselves want it, because they need it essentially to do business.

As a Hybrid Market economy, we leave a lot of decisions, despite that, to the Companies. What freedoms we leave them, and how we leave them is important.

A great deal of the economic troubles of the last decade can be traced to greater permissivenes in terms of economic behavior that is neither productive, nor symbolic of real market conditions.

The Market and the economy, are in their own way, immense fictions, mental games that we arrange in order to carry out the pursuit of economic needs and imperatives, to best use our resources and our efforts. If we get too rigid, and try to micromanage the unimaginable complexity of this useful fiction, we’ll screw up. I’ll give the conservatives that. It’s good to rely on the massive, parallel brainpower of the population for many valuations. However, at the same time, we have to keep all this straight. We have to define the rights and obligations of business sufficiently well that information can reach consumers and investors, and so that those who are employing deceptions and basically cheating the system don’t introduce storms of confusion and crippling doubt into the system.

Also, some decisions are not purely economic in nature, and shouldn’t be treated as such. Our economic system is meant to serve us, not us that system. In the end, the economy is not a system of self-contained truth.

Some parts of the economy must be regulated to work properly. Others should be regulated because the economic benefit comes at too high a human or moral cost. Yet others should be regulated because despite their profitability, they come with secondary issues concerning competition, conflicts of interest, or clarity of information that endanger our complex economy.

For too long, the Republicans have talked the economy as if it were self correcting. What they neglect is that true self correction is typically catastrophic. Even they know this, which is why such deals were floated in the first place.

However, there’s a significant difference between their rhetoric and their policy. The best way I could describe it is that they’ve run it trying to please various corporations and their special interests. However, in the process they’ve created a muddled, disorganized system with many of the safeguards removed.

They have also painted themselves into corner where they are more or less locked into certain policy directions for political reasons. Result?

Well, we’re looking at it, and we’ve seen it over the past decade. What we need in Washington is a more big-picture kind of approach to regulation, one where it’s not regulation or deregulation, not big government or small, free market or control economy, but rather a measured, unified approach that looks to the public’s best interests.

Posted by: Stephen Daugherty at September 22, 2008 8:34 PM
Comment #263914

RickIL, they always win. Why? Because the people believe in fairytales! My son and daughter were visiting New York last year and took a bus tour. The tour guide, a man who in any civilised society would have gracefully and gratefully retired long since, was boasting in his Noo Yawk drawl about how wonderful a country it is - “In this country anyone can be a millionaire” Somehow I don’t think he was, so how would he know? George Carlins American dream I guess. That’s how the people are divided and vote against their own economic interest. They dream that some day they’ll be the guy on top, and wouldn’t want to see any dilution of overflowing abundance they perceive will be their entitlement. Classic tactic, divide and rule.

Posted by: Paul in Euroland at September 22, 2008 8:38 PM
Comment #263918

Lee,

With 650 thousand newly unemployed Americans this year, I just don’t think fleeing execs would leave a huge hole unfulfilled hole in demand for labor to fill those positions, or entrepreneurial start ups to fill the vacuum left by unAmerican corporations dumping this country for better profits elsewhere. There is an enormous executive level talent pool waiting for the opportunity to step up. You might find some teaching in Universities, or working public service jobs, and current and former VP’s and AVP’s abound throughout our labor force in times of contracting economic conditions.

I don’t think their arguments are capable of holding up under even cursory scrutiny.

Posted by: David R. Remer at September 22, 2008 9:11 PM
Comment #263972
Double the tax rate for the highest bracket, and cut the capital gains tax in half. Plenty of money has been lent building unoccupied mcmansions and high end condos, but let’s but all bankrupt persons in jail, and send the rest back to the projects.

Posted by: ohrealy at September 21, 2008 03:21 PM

ohrealy- from your neck of the woods, by the way, do you mean This kind of “mcmansions”, the kind Tony Rezko builds with public funds and then leaves empty and rotting while he makes big political friends with the future presidential candidate next door?

There’s an awful lot of painting Republicans with a broad brush here, guilt by really vague associations, when Mr. Obama literally bought his home from a man, literally next door, for literally hundreds of thousands of dollars less than the market said the house was worth. The man literally next door had literally taken hundreds of millions of dollars to build “low income housing” that literally sat, and sits today, unoccupied. Furthermore it was literally impossible for anyone paying attention not to know a long time in advance of Obama’s campaign for the presidency that this literal benefactor was in the crosshairs of a criminal investigation of these business transactions for which he has been literally found guilty.


Am I to assume this article was written by an OPEN minded individual? (If we overtax the wealthy, the ones who lied to us and cheated us and took advantage of us, we’ll end up in a bad fix?)
I’m sorry, but I can’t see your point in this. Probably because I can’t afford to see out of my enclosure…

Posted by: Marysdude at September 22, 2008 01:53 PM

Marysdude,

Do you know any “rich” people? In a thirty year career in Art I’ve never grossed $100K in any year- not even close- but I do deal with millionaires every day. They run the gamut of humanity. You would paint them all with one brush. Is that an open mind?

One of my clients is a labor union lawyer whose first thought in the morning and last thought at night is how he can help working people. He is a Democrat. He has several Republican brothers (one of them a Nobel Prize nominee). His is a family of those “first quintile” people who rose as a result of the blessings of this country into the “fifth quintile”. He truly does have an open mind, because he must.

From knowing millionaires I have seen that, though some are greedy, by and large the ‘class’ of people is far less so than a vastly more avaricious, contemptuous, complaining ‘class’ of people so carefully sown and tended by the Democratic political elite. They work very hard. They are very disciplined. Among them even my Democrat friends complain about the waste and difficulty imposed by often ridiculous and inflexible regulations. (By the way, as to regulations, in the wake of Hurricane Ike many people who have lost nearly everything and cannot get work are being turned away from food stamp lines empty-handed because they have recently made too much money. Now there’s a flexible, caring government for you!)

Above all they know their capacity to be productive, to serve the needs of clients, to build houses, to provide banking services (You DO use money, don’t you?), etc., depends on their ability to husband resources so that they can be put to good, productive, use in the economy. My Democrat, lawyer, friend has had many millions of dollars invested in oilfield production and knows well how one can be rich one day and stone cold broke the next just because of changing market conditions. He marveled to me once at people getting into criminal legal trouble just because a sudden swing in market situations had turned their financing “upside down”. Want to trade places with that, soldier?

Since you either don’t know any millionaires, Marysdude, or simply choose to think of them all as some other form of “kike”, “wop”, “fag”, or “ni**er”, who must be congregating anywhere the air smells funny or people are cheating other people, perhaps seeing them as fully human and even as different from each other as you and I are different is a bit too much.

On the other hand if seeing the rich as human is your sure sign of a closed mind I will proudly bear that mantle.

David,

In my notes to Marysdude above I mention the possibility of criminal peril imposed on people who made choices on financing in good faith. This is a very real fear for executives in America, as is instability in debt markets, enormous volatility in regulatory environments, and ill-conceived educational environments that render much of that labor pool useless for the real needs of internationally competitive businesses. In fact I do know specific examples of that executive talent pool in the academic world. They were chased there by a very hostile business environment.

What you describe is a group of people who think the potential payoff is worth the potential risk, even as you argue the rationale of drastically reducing the potential payoff! In that sort of environment the people who stand to gain the most are the most corrupt, the ones like Tony Rezko who think they can bribe their way to prosperity.

Posted by: Lee Jamison at September 23, 2008 10:34 AM
Comment #263974
Since you either don’t know any millionaires, Marysdude, or simply choose to think of them all as some other form of “kike”, “wop”, “fag”, or “ni**er”, who must be congregating anywhere the air smells funny or people are cheating other people, perhaps seeing them as fully human and even as different from each other as you and I are different is a bit too much.

What a disgusting, unwarranted thing to post.

Posted by: womanmarine at September 23, 2008 10:49 AM
Comment #263983

Lee

who must be congregating anywhere the air smells funny or people are cheating other people, perhaps seeing them as fully human and even as different from each other as you and I are different is a bit too much.

I agree with woman. What you write here is unwarranted and as you say a bit too much. Mary’s dude is merely stuck like most of us in the lower percentile of a group of people who have witnessed a large increase in the gap between the wealthy and working class under Bush. We see this as no accident. Of course all wealthy people are not vile, deceptive or inhumane. It is the ultra wealthy ruling class of this country who have the real influence in government. Unfortunately under republican rule they generally make large inroads in their abilities to improve their situation at our expense. Supposedly their gain is supposed to trickle down to us underlings. We simply have not seen that. In fact, lately it seems to be mostly trickle up and once it gets there it just stays there. Now we are all being asked to bail those same people out of a mess of their own doing. I am sorry, but there is good reason for speculation surrounding the integrity of our ruling class.

Posted by: RickIL at September 23, 2008 11:58 AM
Comment #264005

If you earn a salary anywhere in the economy you are receiving a steady, partial return on someone else’s investment. ($50.000 would be the relatively reliable return on about a million dollars, for example.) It matters not how hard you work for it. As someone who has to scrabble, sometimes unsuccessfully, for every dime I take home I long ago became keenly aware of this fact that so many people ignorantly take for granted. More often than not that investment was made, or made possible, by someone most of us would call “rich”. People foolishly take a lot for granted by pretending we could get by without them.

What I said above was not too harsh, save that it could be interpreted as roundabout way of calling Marysdude a name. I did not mean to do that. It is simply a more baldly stated way of putting what I read over and over in comments about the “rich” in this site and others. There is a strident effort, especially among Democrats, in this country to homogenize the common view of a class of people in America, and then demonize the whole lot of them as though they were all one ugly, evil, thing.

RickIl and Womanmarine, the encitement of prejudice for political gain is a hideous and dangerous game. I’m old enough to have seen firsthand the devastation that game wrought on the Old South as Democrats used identity politics to cannibalize the black community for the sake of the political unity of the white community. The Democrat elite still play the same game today. Only the groups targeted for hatred have been changed.

The rich are not better nor are they worse than the rest of us. Neither is there any sense in which they are all the same as each other, any more that any of that would be true of blacks, Jews, Italians, or Irish, or any other target of the bigotries we once found acceptable in the past. I will not shy away from pointing out those prejudices when I see them.

Posted by: Lee Jamison at September 23, 2008 2:59 PM
Comment #264018

Lee, your comments are indeed disgusting, and I don’t believe you’ve ever seen anyone, on any column here, call anyone by the names you’ve posted. (with the exception of a troll or two)
I think at the very least, you owe marysdude an apology!! Keep it up….you’re making a great case for yourself.

Posted by: janedoe at September 23, 2008 3:49 PM
Comment #264021

BOTH parties are pathetic.

Here’s the problem (see photo).
Too many of us (politicians and voters) are crappin’ in our own nest.
That’s not too smart, is it?
Voters are culpable too, since too many voters choose to fuel and wallow in the circular, distracting, divisive partisan warfare, which is exactly what the politicians want the voters to do.

The fact is, BOTH parties are so corrupt, there’s really not any significant difference.
Of course the IN-PARTY is usually the most corrupt, which is why they become the OUT-PARTY.
People forget, but BOTH parties are so corrupt, it’s pointless to argue over which is more corrupt.
That’s like trying to decide which gangrenous leg to amputate first.

So, why do most voters polled give Congress dismal approval ratings as low as 9% (www.rasmussenreports.com/public_content/politics/mood_of_america/congressional_performance/congressional_performance), but 85%-to-90% re-election rates?

Voters need to stop letting themselves be controlled by politicians and other blind partisan loyalists that fuel the circular partisan warfare, and start matching their rhetoric (e.g. dismal 9% approval ratings for Congress) with their voting habits.

Is repeatedly rewarding bad politicians with 85%-to-90% re-election working?

After all, for years, no one here has been able to name 50, 100, 200, or even 268 (half of 535) in Congress that are not irresponsible, corrupt, incompetent, and/or FOR-SALE.

But we know that won’t happen, because the incumbent politicians have a very clever mechanism that keeps their re-election rates high.
The incumbent politicians rarely (if ever) never allow anyone in THEIR own party to run against them.
And since most voters won’t vote for anyone in the OTHER party, they vote for the candidate in THEIR own party (which is usually the incumbent).
That is how incumbent politicians maintain 85%-to-90% re-election rates.
That is how the incumbent politicians control and manipulate the voters.
And too many voters are all too happy to fuel and wallow in the circular, divisive, partisan-warfare.

At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).

Posted by: d.a.n at September 23, 2008 3:53 PM
Comment #264022

Lee:

I have gone back and re-read all of marysdude’s posts. What you posted made assumptions about marysdude’s thoughts on the issue that not only don’t reflect the posts accurately, but are offensive on the whole. Ruins your whole argument.

You want to talk about hideous encitement of prejudice, look to your own posts.

Posted by: womanmarine at September 23, 2008 3:53 PM
Comment #264029
Lee Jamison wrote: The rich are not better nor are they worse than the rest of us.

True. Wealthy people aren’t really worse than anyone else.

And not all wealthy people are bad.

The problem is not genetic.

The truth is, most other people put in their position would behave the same way.

With wealth often comes Power.
Power corrupts.
And absolute power corrupts absolutely.

Abuse of wealth is the problem, and most people are susceptible to those temptations.

That’s simply the way it is, but that is in no way rationalizing or condoning the abuse of wealth. On the contrary, it should be punished as with any crime.

Here are a few obvious examples of abuse of wealth:

  • (01) 99.7% of all eligible voters are vastly out-spent by a tiny 0.3% of the wealthiest voters who make 83% of all federal campaign donations of $200 or more.

  • (02) 90% of all elections are won by the candidate that spends the most money, which is usually the incumbent.

  • (03) Congress is FOR-SALE, and gives massive pork-barrel, corporate welfare, and subsidies to the weatlhy.

  • (04) Congress, the puppets for their big-money donors (their puppeteers), have made the tax system regressive, as evidenced by Warren Buffet, the 2nd wealthiest person in the U.S., pays a lower percentage of income to federal taxes (e.g. 17.7% on $46 Million in year 2006), than his secretary (who paid 30% in federal taxes on an income of $60K). Warren Buffet told Tom Brokaw on ‘NBC Nightly News’ that U.S. tax structure is unfair. Warren Buffet performed an informal poll his office, where the average tax rate was 32.9%, compared to his 17.7% percent, citing that as evidence that: ‘the tax system has tilted toward the rich in the last 10 years’.

  • (05) Congress, the puppets for their wealthy puppeteers, refuse to enforce existing laws that would hurt profits for the wealthy illegal employers, or reduce votes for politicians that pander to illegal aliens. The number of constitutional violations and level of law-breakning is increasing, and much of it is for profit for the wealthy.

  • (06) Congress despicably pits Americans citizens and illegal aliens against each other for profits, votes, and (supposedly) misplaced compassion. Huge net losses and costs are being imposed on the middle class due to burdens on schools, hospitals, welfare, insurance, prisons, law enforcement, disease, job displacement, voter fraud, and crime. Net losses are estimated from $70 Billion to $326.7 Billion per year (One-Simple-Idea.com/BorderSecurity).

  • (08) Unfair trade policies.

  • (09) Unnecessary wars based on falsehoods (One-Simple-Idea.com/Transcript1.htm);

  • (10) Politicians put themselves above the law. Even when convicted, many get pardons. Clinton pardoned 456 ; 140 on his last day in office (archives.cnn.com/2001/ALLPOLITICS/stories/01/20/clinton.pardon/)

  • (11) federal deficits are used to steal from the middle class and future generations; especially with regressive taxation;

  • (12) A dishonest, usurious, predatory, inflationary monetary system that is a classic pyramid scheme where money is created out of thin air at a 9-to-1 ratio. The seriousness of this problem is demonstrated by the fact that no one can answer this one simple question:
    • Where will the money come from to merely pay the INTEREST on $53-to-$66 Trillion of nation-wide debt (One-Simple-Idea.com/DisparityTrend.htm#NationWideDebt), much less the money to reduce the current PRINCIPAL debt of $53 Trillion, when that money does not already exist? Especially when now, 80% of the U.S. population owns only 17% (or less) of all wealth, and 1% owns 40% of all wealth (up by 20% from 20% in year 1976); a wealth disparity gap that has never been worse since the Great Depression.

Posted by: d.a.n at September 23, 2008 4:39 PM
Comment #264035

Lee J, that Rezko link didn’t work here, jsut post the url and the site will make the link for you. Leave a space before and after. On BHO’s property, you are overestimating the value. He lives on Hyde Park Blvd, but on the wrong side of the street. Technically, his neighborhood is called Kenwood, and it is just a little too far away from the U of C and a little too close to the projects to be worth what you are claiming. More on Rezko later.

I actually do know millionaires, and most fall into two categories. One category sits back on their investments, does nothing, expects corporations to provide them with an ever increasing income, and complains about any taxation from any level of government. The other category have investments and income, but they go out to work every day, to make some kind of contribution to the society that we live in. I know people who have worked hard for decades without ever getting a paycheck, because they want to be part of improving things, rather than leeches.

Posted by: ohrealy at September 23, 2008 5:10 PM
Comment #264043

ohrealy,

Sorry about that. The link is http://article.nationalreview.com/?q=ZTQyNjk1MmZhNDYyZjQ0OGNlMDIzOGMzZDQwMjk3NTY=. Hopefully, between the two, that will get you there.

Womanmarine, my argument, while immediately directed at Marysdude’s comments, is a response to a general treatment of that perceived ‘class’ of people we have come to refer to as the “rich” which has come to resemble bigotry. There is no question whatsoever this is a prejudicial approach to that class. Nor is there the slightest question that some feel such a treatment of the class is wholly deserved, appropriate, and, not incidentally, politically beneficial to the party such users support.

My use of terms of bigotry, couched in quotes to demarcate them as objects apart from opinions I personally would ever express and not to indicate any particular commenter had used them, (I would have clearly quoted an entire phrase had I intended to indicate someone had used such a term themself.) was intended as an illustration of the prejudice I see in the manner in which the “rich” are addressed in common political discourse today.

Effective illustrations can have a stunning emotional impact, obviously.

Posted by: Lee Jamison at September 23, 2008 6:08 PM
Comment #264046

What a disgusting, unwarranted thing to post.

Posted by: womanmarine at September 23, 2008 10:49 AM

Looks to me that you were most intent on referring to a particular person, since you named his specifically in your response to womanmarine.

My use of terms of bigotry, couched in quotes to demarcate them as objects apart from opinions I personally would ever express and not to indicate any particular commenter had used them, (I would have clearly quoted an entire phrase had I intended to indicate someone had used such a term themself.) was intended as an illustration of the prejudice I see in the manner in which the “rich” are addressed in common political discourse today.


Posted by: janedoe at September 23, 2008 6:37 PM
Comment #264047

Oops…..here is your original post replying to womanmarine, Lee:

Since you either don’t know any millionaires, Marysdude, or simply choose to think of them all as some other form of “kike”, “wop”, “fag”, or “ni**er”, who must be congregating anywhere the air smells funny or people are cheating other people, perhaps seeing them as fully human and even as different from each other as you and I are different is a bit too much.
Posted by: janedoe at September 23, 2008 6:41 PM
Comment #264050

I have been out of touch for a week because of Huricane Ike. Lost power.

I am going to include something I wrote a couple of weeks ago, concerning the financial crisis with Fannie Mae and Freddie Mac. There is a lot of information available about this problem, so it is easy to research and not just make baseless statements:

“The 1968 Charter Act split Fannie Mae into two parts: Ginnie Mae and a reconstituted Fannie Mae. Ginnie Mae would continue as a federal agency and be responsible for the then-existing special assistance programs, and Fannie Mae would be transformed into a “government-sponsored private corporation” responsible for the self-supporting secondary market operations. The reconstituted Fannie Mae was to be stockholder-owned and managed. Fannie Mae retired the last of its government stock on September 30, 1968, and transformation to a government-sponsored private corporation was completed in 1970.
The 1968 Act provided the authority to issue Mortgage-Backed Securities (MBS).
The Act also established a regulatory structure to ensure Fannie Mae’s adherence to its public purpose. It provided for continuing HUD oversight of Fannie Mae, granting “general regulatory power … to insure that the purposes of this Title are accomplished.”
Now, Fannie Mae has always been under Federal Regulations through HUD.
Even under Bill Clinton, “The Federal Housing Enterprises Financial Safety and Soundness Act (“FHEFSSA”) of 1992 modernized the regulatory oversight of Fannie Mae and Freddie Mac. It created the Office of Federal Housing Enterprise Oversight (“OFHEO”) as a new regulatory office within HUD with the responsibility to “ensure that Fannie Mae and Freddie Mac are adequately capitalized and operating safely.”
So you see, Fannie Mae and Freddie Mac have always been under the control of the Feds.
In an article in the NY Times, by Stephen Labaton, Sept. 11, 2003 entitled:
New Agency Proposed to Oversee Freddie Mac and Fannie Mae
“The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.
”There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises,” Treasury Secretary John W. Snow told the House Financial Services Committee in an appearance with Housing Secretary Mel Martinez, who also backed the plan.
Mr. Snow said that Congress should eliminate the power of the president to appoint directors to the companies, a sign that the administration is less concerned about the perks of patronage than it is about the potential political problems associated with any new difficulties arising at the companies…
The proposal is the opening act in one of the biggest and most significant lobbying battles of the Congressional session…

You will notice the Bush administration recognized the problem 5+ years ago. The company execs lobbied against the changes that would take away the presidents ability to appoint execs and the companies 18 members. They were not the only ones to object, and I quote:
“”The regulator has not only been outmanned, it has been outlobbied,” said Representative Richard H. Baker, the Louisiana Republican who has proposed legislation similar to the administration proposal and who leads a subcommittee that oversees the companies. ”Being underfunded does not explain how a glowing report of Freddie’s operations was released only hours before the managerial upheaval that followed. This is not world-class regulatory work.”
Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.”
The Democrats blocked anything that would cause them to loose control. The Democrats used this agency as they have welfare. To dangle the carrot in front of minorities and low income, promising the something free for a vote.
Now see the situation we are in, it will cost the American taxpayers billions. These companies need to be split up and privatized. What you see is another example of big government trying to do the work private companies. Another example is SS. And they would also like to take control of 17% of our economy in the form of national health care. Is anyone else scared?”

Frank and Dodd are the two main characters who blocked any legislation that would correct the problem.

Posted by: Oldguy at September 23, 2008 7:16 PM
Comment #264053

I noticed Phil Gramm’s name has been brought up and are the usual Democrat talking points. Here is an interesting sight that might provide some answers:

http://townhall.com/Columnists/RichLowry/2008/09/22/is_phil_gramm_to_blame

Here is another sight and if you consider yourselves capable of actually discussing the problem, I suggest you read the material:

http://www.rushlimbaugh.com/home/daily/site_092308/content/01125106.guest.html

Posted by: Oldguy at September 23, 2008 7:30 PM
Comment #264058

Lee J, believe it or not, the National Review is actually a little too nice in it’s view of BHO. They seem to have a number of articles on him, and I don’t have time to look at it all right now, because I want to look up the authors too. There are also some inaccurate statements.

Basically, on Rezko, I think BHO is covering for his wife in several areas. She was the one who made the real estate deal. She is employed by the U of C hospital. I always thought her job was fake, just a paycheck for nothing, not uncommon here. There was also a prior deal on a condo, and someone else paying his property taxes.

The area where Rezko has been most involved, is a major redevelopment area. Some vertical housing projects and even an old hospital have been knocked down. The major existing assets in the area are White Sox Park, the Illinois Institute of Technology, and another larger hospital.

Oddly enough, Joe Biden got campaign donations from 3 people associated with Rezko.

Posted by: ohrealy at September 23, 2008 8:32 PM
Comment #264062

ohrealy,
Another tidbit on Joe Biden, just for fun, he was also one of the Democratic Senators who voted for the Gramm/Leach/Bliley bill that the left is trying to sell the world as the cause of the bank meltdown. What is the world coming to.

Robert Rubin, former Clinton Commerce Czar, has taken it upon himself to say all that talk is nonsense, which, of course, it is. Fewer than 70 people in the whole Congress combined voted against that very necessary modernization of banking law.

Posted by: Lee Jamison at September 23, 2008 8:55 PM
Comment #264118

ohrealy,

The scariest line in the article you cite is this one-

“As the former national finance director for the DSCC and DNC, Mr. Cari was a fund-raiser for many prominent elected officials,” spokesman Ben LaBolt said. “If any contributions from Mr. Cari have not been returned or donated it is an oversight, and they will be immediately.”

Admitted criminal bribery on the part of the Democratic National Committee’s NATIONAL FINANCE DIRECTOR gets little or no airtime on national news?!? Lord, what a scandal that would be if he were a Republican!

Posted by: Lee Jamison at September 24, 2008 12:54 PM
Comment #264197

It’s pretty surprising that the National Review gives more weight to the mythology surrounding BHO than our local newspapers do in Chicago. I don’t think that our politics here is widely understood in the country at large. I liked this though: “his heralded cool is that of a professor used to wowing teenagers, and vanishes among peers or strangers”

Now that Rezko is out of the picture, Daley wants to have a “master developer” build the Olympic Village on the site of Michael Reese hospital. Sounds like more hijinks in the pipeline. I’m still trying to figure out if Cari is in jail or not. I wonder if BHO is going to hand out pardons if he gets elected. His property is worth more now, with the added security.

Posted by: ohrealy at September 24, 2008 6:03 PM
Comment #265548

Lee,

I don’t have a thing in the world against wealth or wealthy people…that said, I also don’t trust wealth or wealthy people. Wealth, too easily becomes a game of ‘king of the hill’, wherein the protagonists all vie to see who can push all the others off the hill and be the last one standing.

You don’t believe socialists (I’m not one), who are for wealth redistribution are right, because it destroys incentive and limits progress. You are correct to think that.

I don’t believe that rampant ambition to be of any more value, because in the end there has to be a game winner, i.e., he who owns all the marbles. Games where wealth collects to the most intelligent, the most astute business wise, the most powerful or the most corrupt, may be fun to play, and winning may be a great ego boost…but those who are destroyed along the way do not deserve that destruction just because they are not quite as intelligent, not quite as astute, not quite as powerful or corrupt as the winner.

Wealth redistribution is not a good thing…wealth collection is not a good thing. The greatest difference between the two, perhaps, is the damage done to the losers either way.

It is fairly obvious to most of us that the game of ‘king of the hill’ was being played by very intelligent, astute, powerful and corrupt corporations and individuals. Their game has cost much and created suffering where none should have been. You say it is because we regulate too closely…I say it’s because we have too little oversight…that is just a difference of opinion…it does not mean I am bigoted towards wealth or wealthy people. It merely means I don’t trust wealth or the games wealthy people indulge in.

>Government is the problem. It has over-participated and under-regulated. No matter whose team “wins” we lose if we can’t get them to understand that.
Posted by: Lee Jamison at September 21, 2008 04:35 PM

And yet the very nation we depend on to help bail us out of a mess of our own creation, has more interference and oversight in its economy than we. Do we not borrow from socialists in order to play our capitalist games?

It would not hurt for you to look to yourself before looking down your nose at others. I posted this late so the other posters might not get involved in something I consider to have become a private matter between you and me…

Posted by: Marysdude at October 2, 2008 6:42 AM
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