Wall Street and the Gulf Oil Spill: The Stupidest People on Earth

"The most sweeping changes to financial rules since the Great Depression might not prevent another crisis.
Experts say the financial regulatory bill approved by the Senate last week, and a similar bill that passed the House, include loopholes and gaps that weaken their impact. Many provisions depend on the effectiveness of regulatory agencies — the same agencies that failed to foresee the last crisis."


The above is from the corrupt (see P.S.) Associated Press yesterday. For the AP to get something right, it has to be OBVIOUS. Even CNBC (part of the Wall Street/financial community, and therefore some of The Stupidest People on Earth) noted the same thing. The new "comprehensive" (which should be a kiss of death for ANY new Federal legislation) financial "reform" bill can be summarized in one sentence: "The applicable Federal agencies, and the Federal Reserve, are given complete POWER to control our financial system, our financial institutions, and every "player" in them, as they deem fit--including the power to write such regulations as the deem fit." CNBC and Goldman Sachs are, of course, confident that they can CONTROL the Federal bureaucrats--as they have under both Bush and Obama--which is why they generally support the bill (as part of that economic fascist partnership they believe they now have with Obama and the Federal Government).


As the AP implies, this is the "wave the magic wand", Obama theory of government, where you "solve" a problem by giving the same Federal regulators who have failed in the past GREATER authority so they can fail WORSE in the future. Meanwhile, Federal control goes viral, as our lives slip more and more into the hands of faceless Federal bureaucrats, and the unelected people able to influence them. You will note, all though the corrupt AP really did not, that this legislation not only gives further power to the people who got us in this mess (Wall Street believes this includes THEM, and in the short run they are right), but the legislation was primarily drafted by the very same people who were most responsible for the housing bubble that TRIGGERED our present financial "crisis" (as stated by the Fed Chairman, without naming names). Yes, Chris Dodd and Barney Frank are mainly responsible for this legislation, and they are the two men MOST responsible for the mortgage/housing disaster and the collapse of Fannie Mae and Freddie Mac (those two now totally government entities with MORE DEBT--not really counted as government debt, or in the budget deficit--than the entire Federal Government).


Segue to the oil spill in the Gulf of Mexico. President Obama himself has tld you it was a FAILURE of regulation--regulators too "cozy" with the people they are regulation. Obama, of course, wants you to forget that he is talking about HIMSELF, and his Administration. Obama always acts as if he is completely apart from these things, and yet can wave a magic wand and set everything right with the same kind of regulation--just more of it--that has just FAILED. The only difference between the oil spill and the financial crisis is that the oil spill HAS to be the responsibility of the Federal Government--protection of our offshore environment necessarily being a matter of Federal jurisdiction and responsibility. The best way to keep the financial "crisis" from occurring again was to let those responsible (Goldman Sachs and all of the rest of the economic fascists on Wall Street) FAIL. That is not really an option as to our offshore environment. You will note that the main OBSTACLE, by the way, to complete liability (where we SHOULD "let BP fail", the same way we should have let AIG, Citigroup and the rest fail) is one of those "comprehensive" Federal laws limiting liability for environmental cleanup to 75 million (or some such number), in "exchange" for TAXES/FEES paid by BP and other businesses so that the government would supposedly have the money (which we have, of course, SPENT) to clean up environmental problems.


It is absurd to suggest that Ben Bernanke (second worst failure in the history of world finance, behind Henry Paulson--allbeit Geitner may yet eclipse them both) could not have "prevented" the financial crisis. As the AP suggests, the SEC, the Fed, and all of the rest HAD enough authority to do things about the outrageous speculation being engaged in by heavily regulated banks and public companies. All The Fed had to do was SOUND THE ALARM, and put pressure on banks for risky investments, and they could have stopped the speculation in its tracks. Bernanke was appointed in early 2006, as was Paulson, and yet NOTHING was done to rein in the outrageous risk taking by the Stupidest People on Earth. Paulson even came from Goldman Sachs--where he was CEO--and yet sounded no warnings about the risk of what Golman Sachs was doing. It is absurd to say that the Fed and SEC had no authority over derivatives, and "new" financial instruments, when they had ample authority to put pressure on for RISKY investments of any kind. Mrere bringing the issue to public attention would have derailed the whole cascade of outrageous risk taking.


As stated, the best "punishment" for Wall Street and the banks, and the best PREVENTIVE measure for the future, was to LET THEM FAIL. For people like Bernanke, Paulson and Geitner (at the New York Fed, and in a position to have prevented a lot of this), the proper "punishment" was to permanently get them OUT--with their reputation ruined. Instead, as with Barney Frank and Chris Dodd (although Connecticut people forced Dodd not to run again), many of these people just received MORE power. Have these Federal bureaucrats shown that they deserve this kind of power, or that this kind of central planning can really "save" us? Not on your life. And your life is what they are being given power to run.


as I said, it is the "magic wand" theory of government: the theory that all you have to do is give enough power to Federal bureaucrats and they will "solve" our problems. Both experience and theory (impossibility of fallible human beings knowing enough to centrally direct major portions of our economy) conclusively prove that central planning does not, and cannot, work. Still, we keep not only falling for it, but "doubling down". Federal bureaucrats fail, in financial regulation or in the Gulf of Mexico, and the "answer" is supposedly more power to the same type of Federal bureaucrats (instead of, for example, HEADS ROLLING and actual accountability for failure). Maybe I am being unfair to Wall Street calling them The Stupidest People on Earth. Maybe we, the public, are just as stupid for letting--even sometimes demanding--this "magic wand" theory of government take control.


No. Tempting as it is to admit that the people on Wall Street are no more stupid than the rest of us, and despite the evidence for that, I can't quite buy it. I watched CNBC on Thursday, after the close of the market when the Dow had gone down 375 points (after going UP more than 400 points on Monday or so), and was convinced--despite my wavering--that I was right (as usual). These truly are The Stupidest People on Earth.


Was CNBC discussing how WALL STREET could "clean its own house", and stop this outrageous computer program trading, and momentum trading, which lead to these wild swings. Yes, although Wall Street does not seem to realize it, these wild swings (up and down), and the complete divorce of Wall Street from economic reality, will inevitably DESTROY our financial system--just like that bridge in Washington state (Tacoma?--don't remember) that was shaken to pieces by ever stronger harmonic vibrations.


Nope. The financial "experts" featured on CNBC looked to GOVERNMENT to save them. Yes, they wanted the governments of the world to save them from world debt. They wanted foreign governments to PRINT MONEY, just like the Fed (CNBC obviously believing that they had control of Fed policy--probably correctly). They expressed some concern about the new financial "reform" bill because the details were impossible to know--CNBC people recognizing that the bill did nothing put put power in the hands of Federal agencies and regulators. But the "experts" seemed confident that they could CONTROL what the Federal agencies and regulators eventually did so that it would not affect Wall Street much. You can see why Goldman Sachs SUPPORTED this bill.


What were the "experts" on CNBC worried about? No. They weren't worried about general government power or "regulation". They fully expected a "cozy" relationship with government regulators in the United States. They were, however, worried that Europe would not have the "courage" to fully BAIL OUT Wall Street like our government, and the Fed did. And they did not like the German banning of "naked" short selling (which I strongly support for US--looking upon the Wall Street reaction to the idea as an ENDORSEMENT). In other words, the "experts" at CNBC were pretty confident that fianl "regulations" would be in their interest, but had some slight fears that political pressure might result in actual RESTRICTIONS on the way Wall Street does business--on its "liquidity". Thus, they criticized" the "circuit breakers"--which will stop trading for a few minutes when Wall Street goes out of control Yes, those ae STUPID, but Wall Street wants NO restrictions on their activities, beyond cosmetic. They believe in a "free market" for traders, so long as they get BAILED OUT when they make truly bad decisions and fail to fix their borken market. Further, they don't believe in a "free market" for the country. They believe in GOVERNMENT, because they think they can control government for their benefit.


Nope. You need no further evidence that these people are deluded: The Stupidest People on Earth, because they really should know better.


P.S. I have consistently--with concrete examples--shown the despicable AP to be a CORRUPT "news" organization. Yet, I basically approve, above, of this particular AP story. Is this a Sodom and Gomorrah moment, where I have actually succeeded in my God-like search for a single honest AP reporter? Not necessarily. Yes, this means I am cynical, and skeptical of the corrupt AP. I look at every story on its merits, but is there a hidden agenda? Maybe. Note that we are in a FRAGILE economic state. What if this government "solution" FAILS again? Well, the AP may simply be preparing the way for the NEXT government "solution", on the grounds that this one did not go far enough.


P.PS. In case you did not get the point, I AM saying that Wall Street and the financial community are now basically DEMOCRATS--Big Government people fully invested in this idea of a partnership with government involving ever more SPENDING. The criticism on Wall Street of Europe is that they are not SPENDING the way we did--instead starting to look at austerity. Sure, there are dissenters. But it is no surprise that both Goldman Sachs and British Petroleum (PACs) made their major contributions to OBAMA. Devinition of economic fascism: a central planning partnership between big government and big business ("socialism with a capitalist veneer").