RSS Feed for This PostCurrent Article

How Wall Street Bought Washington

By Larry Doyle on March 10, 2009 at 6:45 PM in American Consumers, Banking Institutions, Barack Obama, Christopher Dodd, Chuck Schumer, Clinton, Congress (House & Senate), Democratic Party, Economy, Equity Markets, Fannie Mae, Freddie Mac, Global Finance, Republicans, Wall Street

A great American and loyal reader (thanks FL) shared a report recently produced by not-for-profits Essential Information and The Consumer Education Foundation. This report, Sold Out: How Wall Street and Washington Betrayed America, has gotten little to no attention in the general media. What a shame. I find of particular interest the fact that a number of the currently discussed regulatory changes are directly addressing the points highlighted in this report. I personally view these proposed regulatory changes as substantiating this report and adding credibility to its effort. For the naysayers in the audience, I would ask you to review the report and reconsider your assessment.

I was struck a month ago by the incriminating statements put forth by Senator Chuck Hagel and CIA head Leon Panetta, which I highlighted on February 16th in Legalized Bribery. Those statements bluntly indict our massive system of lobbying, political fundraising, and the quality of those running for elected office! In light of that article, I am more and more convinced that our elected officials have turned their offices into massive for profit machines at the expense of our public well being.

I commend the authors of this report, Roger Weissman and James Donahue, for taking the time and making the extensive effort to expose the truth. The full report, 231 pages in length, spares no detail. In studying it, I found the information and analysis riveting. Let me try to summarize it for you.

The report chronicles in real detail how Wall Street showered Washington with $1.7 billion in campaign contributions and $3.4 billion upon lobbyists over the last ten years. That money went from the lowest members of Congress to the President of the United States. 55% of the contributions went to Republicans and 45% went to Democrats. Yes, a truly bipartisan effort.

The authors are beyond thorough in laying out how the . . .

financial sector showered campaign contributions on politicians from both parties, invested heavily in a legion of lobbyists, paid academics and think tanks to justify their preferred policy positions, and cultivated a pliant media — especially a cheerleading business media complex.

The report highlights the electricity crisis in California in 2000 and the Enron debacle as precursors of our current situation.

They quote FDR in his statement, “our enemies of today are the forces of privilege and greed within our own borders.” The same clearly holds true today.

Where were our leaders with the vision and foresight to protect the public? Feeding at the Wall Street trough!! Let’s review what the $5.1 billion bought Wall Street and who in Washington facilitated the process. Later I will highlight a number of politicians who collected substantial amounts of these dollars.

Part I : What Did the Money Buy?

1. the repeal of the Glass-Steagall Act which separated commercial and investment banking activities. This act came out of the Great Depression. Former Fed chair Paul Volker supported Glass-Steagall in the late 90′s and still does today. The expected repeal of this Act allowed for the merger of Citibank and Travelers Insurance even before the formal repeal. President Clinton, Treasury Secretary Robert Rubin, Congressman Phil Gramm, and Fed Chair Alan Greenspan were the primary supporters of this repeal.

2. the allowance of off-balance sheet accounting which promoted the increased leverage in banks.

3. the executive branch rejects financial derivative regulation. The CFTC (Commodities Futures Trading Corp), led by Brooksley Born’s effort, sought to exert regulatory control over derivatives. The CFTC was squashed by Robert Rubin and Alan Greenspan. Then Deputy Treasury Secretary Larry Summers told Congress that CFTC proposals would cast regulatory uncertainty over a thriving market. Aside from Rubin, Greenspan, and Summers, Senator Richard Lugar and SEC Chair Arthur Levitt also supported the Clinton administration’s lack of regulatory oversight.

4. Congress also blocked financial derivative regulation through legislation engineered by Senator Phil Gramm.

5. in 2004, the SEC succumbed to massive lobbying by Wall Street allowing for voluntary regulation. This acquiescence is the grossest example of the inmates running the asylum. In 1975, the SEC ruled that debt to net capital ratios had to be less than 12 to 1. This “voluntary regulation” led by Goldman Sachs and then CEO Henry Paulson allowed investment banks to develop their own net capital requirements. Merrill Lynch went to a 40:1 ratio. Then SEC chair Chris Cox acknowledged this voluntary regulation was a complete failure!

6. the bank self-regulation goes global.

7. the total failure to police the mortgage banking industry and its predatory lending. People may never have heard of outfits such as Aames Financial, Delta Funding, Ameriquest, Long Beach, and many more. These firms propagated massive frauds in lending to unqualified borrowers. They need to be brought to justice.

8. the federal government preempted a number of state consumer protection laws which would have mitigated a lot of the predatory lending.

9. the government allowed for purchasers of loans to escape accountability. Only the original mortgage lender would be liable for the predatory and illegal features embedded in the mortgages. This immunization of the investment banks eliminated their legal exposures and facilitated the continuation of fraudulent lending practices.

10. Fannie Mae and Freddie Mac expand their footprints into the non-prime mortgage market. Many politicians fed from the Freddie and Fannie troughs, but nobody more than Chris Dodd and Barack Obama.

11. the merger mania in the banking industry has led to institutions now deemed “too big to fail.” This report believes these institutions should now be treated like highly regulated public utilities.

12. the debacle that played out with the rating agencies only further facilitated this mess. These agencies were and still are massively conflicted.

Part II: Who Paid What and Who Collected How Much 1998-2008?

– Commercial Banks spent $154 million in campaign contributions and $383 million on lobbyists.

— Accounting Firms spent $81 million in campaign contributions and $122 million on lobbyists.

— Insurance Companies spent $220 million in campaign contributions and $1.1 billion on lobbyists!!

— Investment Banks spent $512 million in campaign contributions and $600 million on lobbyists.

A very large percentage of the lobbyists were former government officials!!

While the report makes a number of recommendations, a few strike me as self-evident and vitally necessary:

1. derivatives must be regulated.
2. limited leverage within financial institutions
3. revise the compensation system for financial institutions so timing of reward is linked to elimination of risk
4. consumer advocacy groups

The list of politicians receiving the largesse runs approximately 80 pages and covers the Presidency to seemingly every member of Congress. I was also struck by the consistency of contributions received during each election cycle by Senators Schumer (D-NY) and Dodd (D-CT). Schumer represents the Wall Street territory while Dodd has been a longtime senior ranking official on the Senate Banking committee.

As I perused the financial data specifically for 2008, I paused and reflected on the fact that these institutions were, and to a large extent still are in dire financial straits. While in the process of receiving government support, they had made or were making campaign contributions. As the government has haphazardly reviewed expenditures at these organizations, let’s shed the floodlight right back on these campaigns. It is not difficult to track campaign contributions to politicians back to taxpayer funds injected into these firms. In light of that, I know it will never happen but I believe the political campaigns should return those dollars to the public. Who received how much money in 2008? While not totally comprehensive, my back of the envelope analysis shows the following:

Barack Obama: $3.9 million
John McCain: $2.1 million
Hillary Clinton: $2.5 million
Rudolph Giuliani: $1.1 million
Chris Dodd: $650k
Mitt Romney: $1.060 million
Rham Emanuel: 160k

President Obama, Madame Secretary and gentlemen, please make those checks payable to “American Taxpayer” and let’s begin to return some integrity to our political process.

Where’s the media to shed light on this travesty? Oh yes, they are compliant and cheerleading.

Robert Rubin, he’s our man, if he can’t do it, Greenspan can,
Alan Greenspan, he’s our man, if he can’t do it, Paulson can,
Henry Paulson, he’s our man, if he can’t do it, Dodd can,
Chris Dodd, he’s our man, if he can’t do it, Gramm can,
Phil Gramm, he’s our man, if he can’t do it, Obama can…

Uh, oh!! We got real problems!!

LD

**Cross-posted from my blog, Sense on Cents. Come by and visit!

  • CentralMass

    Phil Gramm should be tarred and feathered.

    • Welcome Back Carteh

      http://www.factcheck.org/elections-2008/who_caused_the_economic_crisis.html

      What Gramm-Leach-Bliley did was to allow commercial banks to get into investment banking. Commercial banks are the type that accept deposits and make loans such as mortgages; investment banks accept money for investment into stocks and commodities. In 1998, regulators had allowed Citicorp, a commercial bank, to acquire Traveler’s Group, an insurance company that was partly involved in investment banking, to form Citigroup. That was seen as a signal that Glass-Steagall was a dead letter as a practical matter, and Gramm-Leach-Bliley made its repeal formal. But it had little to do with mortgages.

      Actually, deregulated banks were not the major culprits in the current debacle. Bank of America, Citigroup, Wells Fargo and J.P. Morgan Chase have weathered the financial crisis in reasonably good shape, while Bear Stearns collapsed and Lehman Brothers has entered bankruptcy, to name but two of the investment banks which had remained independent despite the repeal of Glass-Steagall.

      • CentralMass

        Didn’t the american tax payer hald to cough up soemthing like $320 billion to bailout Citigroup back in November?

      • CentralMass

        Citigroup (NYSE: C) and American International Group (NYSE: AIG) have already taken about $496 billion in U.S. cash and guarantees to keep them from failing. This makes me wonder: Is there no way to allow them to simply fail without causing the entire global financial system to collapse? And if not, is there a limit to how much more taxpayer money we pour into them before we say “no more”? The answers: Maybe and Yes.

        Citi looks to be a basket case after $345 billion in taxpayer bailouts. It has already gotten $45 billion in cash — $25 billion of which was recently converted from preferred to common — and $301 billion in guarantees of its toxic assets. The U.S. now owns 36% of the common stock of Citi — which lost $27.7 billion in 2008 and has a market capitalization — Citi common shares times price per share — of $8.2 billion.

        Investors are not buying the latest bailout. By some strange mathematics, Citi’s market capitalization is 12% of the value of the common, $69 billion ($25 billion/36%), implied by the U.S.’s 36% stake bought for $25 billion. Meanwhile, the boost in Citi’s tangible common equity from $30 billion to $81 billion did nothing to stop Moody’s from cutting Citi’s credit rating to A3 from A2 and S&P from changing its outlook on Citi’s debt to negative from stable.

      • Gogo

        Factcheck? The made up website by and for Obama? Pul-sleeze!

  • http://www.senseoncents.com LD

    How about Robert Rubin??

    • CentralMass

      Gramm and his wife seem to have made a career out of selling us down the river.
      http://www.mydd.com/...

      A brief history of the Glass-Steagall Act of 1933:

      In 1933, a few years following the stock market crash, Congress passes the Glass-Steagall Act, in hopes that regulating banks will help prevent market instability, particularly amongst Wall Street banks. The purpose of the act is to separate commercial banks that focus on consumers from investment banks, which deal with speculative trading and mergers.

      The Glass-Steagall Act provided the proper oversight and entity separation that would prohibit banks and other financial companies from merging into giant trusts (conflict of interests) — giant trusts or corporations being more powerful, naturally, and having the seemingly limitless capital to lobby their corporate interests, however, with a very myopic scope (particularly when it comes to factoring in potential losses — most banks, as seen in contemporary times, chose not to anticipate losses in the mortgage market; they presumed home prices would continue to appreciate).

      In 1999, former Senator Phil Gramm … set out to completely gut the Glass-Steagall Act, and did so successfully, replacing most of its components with the new Gramm-Leach-Bliley Act: allowing commercial banks, investment banks, and insurers to merge (which would have violated antitrust laws under Glass-Steagall). Sen. Gramm … had received over $4.6 million from the FIRE sector (Finance, Insurance and Real Estate donations) over the previous decade, and once the Act passed, an influx of “megamergers” took place among banks and insurance and securities companies, as if they had been eagerly awaiting the passage of Gramm’s Act. Everything in between Glass-Steagall and Gramm-Leach-Bliley (i.e. Savings and Loan crisis/bust) was, in large part, the incubation period for what would take place over the nine years that would follow the passage of Gramm’s Act: an experiment in deregulation.

      Shortly after George W. Bush was elected president, Congress and President Clinton were trying to pass a $384 billion omnibus spending bill, and while the debates swirled around the passage of this bill, Senator Phil Gramm clandestinely slipped a 262-page amendment into the omnibus appropriations bill titled: Commodity Futures Modernization Act. It is likely that few senators read this bill, if any. The essence of the act was the deregulation of derivatives trading (financial instruments whose value changes in response to the changes in underlying variables; the main use of derivatives is to reduce risk for one party). The legislation contained a provision — lobbied for by Enron, a major campaign contributor to Gramm — that exempted energy trading from regulatory oversight. Basically, it gave way to the Enron debacle and ushered in the new era of unregulated securities. Interestingly enough, Gramm’s wife, Wendy, had been part of the Enron board, and her salary and stock income brought in between $900,000 and $1.8 million to the Gramm household, prior to the passage of the Commodity Futures Modernization Act.

      • Welcome Back Carteh

        Sorry if there are repeat posts.

      • termo

        I don’t know much about Gramm’s lobbying but the analysis presented here on Glass-Steagall is entirely based on an old and more primitive banking system.

        The Clinton Administration was a time when the global economy began to boom – companies were going global – and financial institutions and markets had to adapt accordingly.

        You clearly intentionally left out the fact that, while Phil Gramm was a sponsor of the Gramm-Leach-Bliley Act, President Bill Clinton signed it into law.

        By breaking down the barriers of financial institutions it allowed these companies to better service customers with their savings and investment portfolios and to make money during economic growth and econmic recession.

        If the replacement of Glass-Steagall was the cause of this banking problem then the problem would have happened first in Europe where there never was a Glass-Steagall type law. But that was not the case.

        Under Gramm-Leach-Bliley there is regulation that is adapted to the new order of financial institutions. The problem with regulations is that they only work when they are adhered to and enforced and not sidestepped.

        Concerning the derivatives market and our current banking problem, it did not begin in the dark of night in the waning days of President Bill Clinton.

        This banking problem was actually due to banks being forced to write mortgages for people previously thought not to qualify. It was done because of the passage in 1977 of the Community Reinvestment Act which was to force banking institutions to offer credit to lower income communities. Beginning in 1992 Fannie Mae and Freddie Mac began to drive greater and greater amounts of credit going into these lower income neighborhoods. In 1995 the CRA was readdressed and received greater support. These loans were the root of the problems banks face today (although not the entire problem – see subprime lending and speculation). Good intentions leading to unintended consequences.

        Regarding Enron, I am tired of reading B.S. Enron was a good idea when it began, and fit a visionary model of an energy company of the future. Good intentions leading to unintended consequences. The Clinton Administration was very instrumental in the development of Enron and it introduction to world markets, so please don’t lay this B.S. that Democrats were clueless and had no involvement with Enron. The Enron loophole was not the cause of the company’s collapse. The cause was outrageous corruption which in part led to Sarbanes-Oxley in 2002.

  • termo

    One minor addition:

    “Schumer represents the Wall Street territory while Dodd has been a longtime senior ranking official on the Senate Banking committee.”

    Dodd’s state also has a significant number of investment banking and private equity firms as well as the homes for many of the Wall Street executives (Fairfield County).

    Other than that, your post is an exceptional analysis.

    It should be noted that our national politics is owned and operated by the lobbyists. Look at an issue and you will see a trail of money donations and lobbying groups writing the legislation.

    The stimulus bill was a virtual Disneyworld for D.C. lobbyists.

    • NoBamaNoWay

      This article hits the nail on the head; Wash DC is rotten to the core with corruption and incestuous favor-trading relationships. the entire aristocracy that runs america is part of the game, and of course the little people are getting screwed every which way.

      is it any wonder that america is going down the tubes? the parasites at the top can only squeeze so much blood out of the american turnip before the whole country starts to die.

      We need to drastically shrink the federal government across the board, and get power and money back to the states, where citizens can exercise a little more oversight.

  • Citizen70

    Money talks, nobody walks.

    Don’t blame me – I voted for Ralph Nader! America, wake up!!!!!!!!!!!

    Larry, thank you for bringing this information to us.

  • Welcome Back Carteh

    As I perused the financial data specifically for 2008, I paused and reflected on the fact that these institutions were, and to a large extent still are in dire financial straits. While in the process of receiving government support, they had made or were making campaign contributions. As the government has haphazardly reviewed expenditures at these organizations, let’s shed the floodlight right back on these campaigns.

    That sounds like theft.

  • bart

    All the pols listed were running for prez in 2008, so I would expect their names to appear. What about off-election year donations? Who (not running for president) also benefitted?

    Or is running for president just one way to cash in?

    • http://www.senseoncents.com LD

      Bart…the link embedded in the story has every name but to caution you the listing goes by firm and by year (for example Bear Stearns 2008, 2006, 2004, 2002, 200, 1998) and then Goldman, Lehman, et al…Also cover commercial banks and hedge funds.

      The total listing runs almost 80 pages.

      It may be easier to list who is NOT included as it is to list who is. Wall Street was seemingly buying favors from EVERYBODY, but especially those on the banking and finance committees.

      I listed the 2008 only because last year was the year in which the govt injected so much capital into these companies.

  • Mercedes

    I definitely want to take a look at “Sold Out:…” I will be especially interested to see if it mentions the Bush Administration’s first Secretary of the Treasury, Paul O’Neill, who subsequently resigned his position and became an outspoken Bush administration critic. According to Wikipedia:

    “A report commissioned in 2002 by O’Neill, while he was Treasury Secretary, suggested the United States faced future federal budget deficits of more than US$ 500 billion. The report also suggested that sharp tax increases, massive spending cuts, or both would be unavoidable if the United States were to meet benefit promises to its future generations. The study estimated that closing the budget gap would require the equivalent of an immediate and permanent 66 percent across-the-board income tax increase. The Bush administration left the findings out of the 2004 annual budget report published in February 2003.”

    I intend to search the internet and see if Mr O’Neill, who apparently is one of few in the political world with any integrity, has any thoughts on the current situation.

    • http://www.senseoncents.com LD

      O’Neill is not referenced in the report. I also found it interesting how little Bush was referenced.

  • Seattle Moss

    Marx said the following which is exactly what is happening today. The difference between 1867 and today is that we have Marxist’s in power now which will fulfill the dream they have for this hemisphere.

    “Owners of capital will stimulate working class to buy more and more of
    expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalized, and the State will have to take the road which will eventually lead to communism.”

    Karl Marx, 1867

    • http://www.cheneywatch.org/ truthtelling007

      So what about your criticism of the “owners of capital” who told the citizens go to “buy more and more”? Or will this be a one sided statement?

      Sorry, you presume so much about this green neophyte president to call him a Marxist. You give him too much credit to call him a Marxist. And at the same time you ignore the bourgeois who preceded him who said, spend spend spend.

      http://www.washingtonpost.com/wp-dyn/content/article/2008/10/03/AR2008100301977.html

      He Told Us to Go Shopping. Now the Bill Is Due.

      By Andrew J. Bacevich
      Sunday, October 5, 2008; B03

      It’s widely thought that the biggest gamble President Bush ever took was deciding to invade Iraq in 2003. It wasn’t. His riskiest move was actually one made right after the Sept. 11, 2001, terrorist attacks when he chose not to mobilize the country or summon his fellow citizens to any wartime economic sacrifice. Bush tried to remake the world on the cheap, and as the bill grew larger, he still refused to ask Americans to pay up. During this past week, that gamble collapsed, leaving the rest of us to sort through the wreckage.

      To understand this link between today’s financial crisis and Bush’s wider national security decisions, we need to go back to 9/11 itself. From the very outset, the president described the “war on terror” as a vast undertaking of paramount importance. But he simultaneously urged Americans to carry on as if there were no war. “Get down to Disney World in Florida,” he urged just over two weeks after 9/11. “Take your families and enjoy life, the way we want it to be enjoyed.” Bush certainly wanted citizens to support his war — he just wasn’t going to require them actually to do anything. The support he sought was not active but passive. It entailed not popular engagement but popular deference. Bush simply wanted citizens (and Congress) to go along without asking too many questions.

      So his administration’s policies reflected an oddly business-as-usual approach. Senior officials routinely described the war as global in scope and likely to last decades, but the administration made no effort to expand the armed forces. It sought no additional revenue to cover the costs of waging a protracted conflict. It left the nation’s economic priorities unchanged. Instead of sacrifices, it offered tax cuts. So as the American soldier fought, the American consumer binged, encouraged by American banks offering easy credit.

      From September 2001 until September 2008, this approach allowed Bush to enjoy nearly unfettered freedom of action. To fund the war on terror, Congress gave the administration all the money it wanted. Huge bipartisan majorities appropriated hundreds of billions of dollars, producing massive federal deficits and pushing the national debt from roughly $6 trillion in 2001 to just shy of $10 trillion today. Even many liberal Democrats who decried the war routinely voted to approve this spending, as did conservative Republicans who still trumpeted their principled commitment to fiscal responsibility and balanced budgets.

      Bush seems to have calculated — cynically but correctly — that prolonging the credit-fueled consumer binge could help keep complaints about his performance as commander in chief from becoming more than a nuisance. Members of Congress calculated — again correctly — that their constituents were looking to Capitol Hill for largesse, not lessons in austerity. In this sense, recklessness on Main Street, on Wall Street and at both ends of Pennsylvania Avenue proved mutually reinforcing.

      For both the Bush administration and Congress, this gambit has turned out to be clever rather than smart. The ongoing crisis on Wall Street has now, in effect, ended the Bush presidency. Meanwhile, a month before elections, panic-stricken members of Congress are desperately trying to insulate Main Street from the effects of that crisis — or at least to pass the blame onto someone else.

      But in less obvious ways, the economic crisis also renders a definitive verdict on the country’s post-9/11 national security strategy. The “go to Disney World” approach to waging war has produced large, unanticipated consequences. When the American people, as instructed, turned their attention back to enjoying life, their hankering for prosperity without pain deprived the administration of the wherewithal needed over the long haul to achieve some truly ambitious ends.

      Even today, the scope of those ambitions is not widely understood, in part due to the administration’s own obfuscations. After September 2001, senior officials described U.S. objectives as merely defensive, designed to prevent further terrorist attacks. Or they wrapped America’s purposes in the gauze of ideology, saying that our aim was to spread freedom and eliminate tyranny. But in reality, the Bush strategy conceived after 9/11 was expansionist, shaped above all by geopolitical considerations. The central purpose was to secure U.S. preeminence across the strategically critical and unstable greater Middle East. Securing preeminence didn’t necessarily imply conquering and occupying this vast region, but it did require changing it — comprehensively and irrevocably. This was not some fantasy nursed by neoconservatives at the Weekly Standard or the American Enterprise Institute. Rather, it was the central pillar of the misnamed enterprise that we persist in calling the “global war on terror.”

      At a Pentagon press conference on Sept. 18, 2001, then-defense secretary Donald H. Rumsfeld let the cat out of the bag: “We have a choice, either to change the way we live, which is unacceptable, or to change the way that they live, and we chose the latter.” This was not some slip of the tongue. The United States was now out to change the way “they” — i.e., hundreds of millions of Muslims living in the Middle East — live. Senior officials did not shrink from — perhaps even relished — the magnitude of the challenges that lay ahead. The idea, wrote chief Pentagon strategist Douglas J. Feith in a May 2004 memo, was to “transform the Middle East and the broader world of Islam generally.”

      But if the administration’s goals were grandiose, its means were modest. The administration’s governing assumption was that the U.S. military, as constituted in late 2001, ought to suffice to transform the Middle East. Bush could afford to tell the American people to go on holiday and head back to the mall because the indomitable American soldier could be counted on to liberate (and thereby pacify) the Muslim world.

      For a while, that seemed to work: The Taliban fell quickly, with little need for the U.S. taxpayer to shell out for a larger military. But the Bush team turned quickly to Iraq, hoping to demonstrate on an even grander scale what the determined exercise of U.S. power could achieve. This proved a fatal miscalculation. After five and a half years of arduous effort, Iraq continues to drain U.S. resources on a colossal scale. Violence is down, but expenditures are not. An end to the U.S. commitment is nowhere in sight.

      The achievements of Gen. David H. Petraeus notwithstanding, the primary lesson of the Iraq war remains this one: To imagine that the United States can easily and cheaply invade, occupy and redeem any country in the Muslim world is sheer folly. That holds true in Afghanistan, too, where the reinforcements that Gen. David D. McKiernan, the recently appointed U.S. commander, says he needs to turn things around will be unavailable until at least next spring.

      Yet there is an economic lesson here too. “We have more will than wallet,” the president’s father said in 1989 during his own inaugural address. That is again painfully true today. The 2008 election finds the Pentagon cupboard bare, the U.S. Treasury depleted, the economy in disarray and the average American household feeling acute distress. Profligacy at home and profligacy abroad have combined to produce a grave crisis. This time around, telling Americans to head for Disney World won’t work. The credit card’s already maxed out, and the banks are refusing to pony up for new loans.

      It’s not surprising that people don’t cotton to the idea of spending $700 billion to bail out Wall Street. Nor should they find it acceptable to spend as much as that, or more, to perpetuate a misguided and never-ending global war. But like it or not, the bill collector is pounding on the door. Bush’s parting gift to the nation will be to let others figure out how to settle accounts.

      Andrew J. Bacevich is a professor of history and international relations at Boston University. His new book is “The Limits of Power: The End of American Exceptionalism.”

      Frankly I hold pretty equal contempt for capitalist zealots as I do for ignorant Marxists. But at least have a balanced commentary, SM. It isn’t too much to ask.

      • andrew191

        Unfortunately, the ideals of true capitalism rapidly dissolve when government enters into the market with a greater role than that of a referee, it’s true role, and starts participating in the game itself. Nobody alive has experienced what true capitalism can do, we only know a mixed economy, one where the government is constantly taking a greater and more destructive role. By far, most of the problems that we’re experiencing right now are due to government intrusion, not from capitalist principles.

        • http://www.cheneywatch.org/ truthtelling007

          I don’t disagree with the idea that government intrusion has its failures, but how do you base your comment that “most of the problems we are experiencing right now are due to government intrusion”? instead of it being mostly from consumer and broker greed? If the people in this country haven’t controlled their personal greed or expectations wouldn’t that create the problem we have now? How is the government intrusion what caused this? This problem came to fruition under a very deregulated government system, and now we’re headed to an overly regulated government buyout. While I’d agree that government intrusion isn’t going to be the fix, I fail to see how it is the cause of “most of the problem”.

          and
          “ideals of true capitalism”
          Where can these ideals be read? I’m interested in someone making cogent points about ‘true capitalism’.

          As a business owner I have many opinions, but there are other views I may not have been exposed to. Please share some links.

          • andrew191

            For most of the questions you’ve asked, a detailed and deep analysis will reveal that government played a crucial role. Even the greed and avarice you point out are far better controlled with sound capitalist concepts and the invisible hand, than the government could ever do. In fact, most of the uber wealthy are that way BECAUSE they used government policies.

            I don’t have a link, but I would STRONGLY recomend that you read “Capitalism, The Unknown Ideal” by Ayn Rand. It is an excellent collection of essays that clearly explain how government has had a harmful effect in multiple areas of the market. Even the most radical liberals that I’ve given it to have expressed surprise at how compelling and solid the reasoning is. It has been fun to witness their epiphanys. READ IT. Then let me know what you think, please.

            • http://www.cheneywatch.org/ truthtelling007

              I’ll check out the Rand reading you recommended. I’ve read many Rand pieces and tend to disagree with many of her assumptions, but it is still always educational to gain that point of view.

              “most of the uber wealthy are that way BECAUSE they used government policies. ”
              This I agree with, but see it as different than government “interference” or “intrusion”.

              I’ll get back on this after I read up on Rand’s views.

    • http://www.cheneywatch.org/ truthtelling007

      And one more thing…the above quote never was printed in Das Kapital, it is a hoax.

      http://clockbackward.wordpress.com/2009/02/04/did-karl-marx-predict-financial-collapse/

      Sorry, you’ve been had.

      I’m sure you’ll find it in the text of Das Kapital next to the marsh mouse that never existed in the stimulus bill.

      Guys, we have real issues to solve and this neophyte president isn’t going to solve them, nor are his people going to be able to solve them. But we aren’t helping the situation when we buy into garbage emails that fit our biases and our anger. That isn’t the way to the truth.

      Be cynical please.

      • andrew191

        Why should we believe YOU. (Just practicing my cynicism)

        • http://www.cheneywatch.org/ truthtelling007

          Don’t…just go to any online copy of Das Kapital, or even the Manifesto and find the quote for yourself, then your knowledge will be solid. Trading one appeal to authority for another is not very cynical. But is still an email hoax.

          • andrew191

            That was a joke TT. I read “Das Kapital” years ago, and if I had read what was quoted above, I would have remembered it. It is not even in the style of Marx’s writing, and is too ridiculously prophetic and custom fit to be true.

            The most disturbing part of this little episode is that it demonstrates how seductive, pervasive, and ubiquitous these urban legends are becoming with the aid of the internet. It’s getting so we’re rapidly approaching an Orwellian nightmare where we might hesitate to believe anything. However, you CAN take cynicism too far.

            • http://www.cheneywatch.org/ truthtelling007

              yes, one can take it too far. I get emails all the time from very intelligent folks, but they don’t have the time to check each and every Nigerian prince who wants to give them money to hold, so long as they’ll give him their bank account numbers so he can deposit the funds in their account until he’s safely in the United States.

              • Seattle Moss

                Thanks for the responses.
                TT,
                When I see a movement that wants to punish wealth creators and businesses despite the fact that we have a collapsing economy I can only surmise that they want to socially engineer the economy regardless of the consequences.
                Obama is a Marxist!

                My definition of a Marxist is any movement that plays Class Warfare to further their power and control.
                Lenin played the same game and look what happened to their society.
                The feedback I’m getting from the thousand companies I sell to is that
                Obama is Bad For Business

                I will conclude that Obama is a WIMP who fails to understand the existential threats facing America and has already waved the white flag of retreat and defeat which I’m sure makes you really happy yet makes America totally vulnerable.

  • MrMike

    Anybody know what the percentage of the total intake of campaign donations that money represents for the various candidates?

  • anon

    Who is John Galt?

    That’s all I’ve got to say. If you don’t know what that means you can find out easily enough. I repeat,

    Who is John Galt

  • Seattle Moss

    What does a Trillion dollars look like

    http://www.pagetutor.com/trillion/index.html?ref=patrick.net

    • andrew191

      Damn SM, you’re filling up my “favorites” with these great links. My son and I have been trying to purchase some Zimbabwean 100 trillion dollar bills on e-bay. They’re worth about 33 U.S. dollars right now, but in the near future, who knows?

  • NoBamaNoWay

    Somebody finally said it; all of DC and the rest of the american aristocracy is rotten to the core with corruption and incestuous favor-trading relationships. and who pays the bill? the poor working suckers who are stupid enough to have not gotten in on the game. thanks a lot for the info, LD, and for your many other useful and informative posts.

    • http://www.senseoncents.com LD

      My pleasure. Thanks for the plug.