Corporations are not people!
After watching a large part of this David Stockman interview with Bill Moyers I'm about ready to adopt the dirty hippies #Occupy meme. When they villified "Wall Street" and "Greedy Corporations" I always had a mental image of Fidelity Investments and WalMart. But if I replace that with Goldman Sachs and General Electric I think we would agree on more than we differ.
This also magnifies my distrust of the GOP establishment and, by association, the Romney candidacy.
David Stockman on Crony Capitalism from BillMoyers.com on Vimeo.
Posted by JohnGalt at 1:15 AM
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Made it through. Clearly I'm going to have to change brother jg's password. It's one thing to hack somebody's account for personal gain, but this character assassination borders on libel.
Okay, he doesn't like Jeff Immelt -- thus 50% as reliable as a broken clock.
What what what did you like? A constitutional amendment to keep corporate money out of politics -- a $100 limit on contributions? Government dictating the size, structure, and allowed transactions of banks (my largest disagreement with Gov Huntsman)? Or did you just dig the repudiation of Reagan's economic vision?
If I may quote In Living Color's "Men on Film" segement: "hated it!"
If memory serves, I came in at about 21:30 when I switched on PBS last night. Anything before that I'll defer to a future debate.
I liked the expose of GE's bailout and how it should have been done through a dilution of shareholder value and not by a FED bailout.
I liked the assertion, "Free markets are not free. They've been bought and paid for by large financial institutions."
I liked the identification of the "entitled class" of "Wall Street financiers and corporate CEOs" who "believe the government is there to do whatever is necessary ... whatever it takes to keep the game going and their stock price moving upward."
And most of all, I appreciated Stockman's correction that "it is important to put the word crony capitalism on there, because free-market capitalism is a different thing. True free-market capitalists never go to Washington with their hand out. True free-market capitalists running a bank do not expect that whenever they make a mistake or whenever they get themselves too leveraged, or they end up with too many risky assets that don't work out, they don't expect to be able to go to the Federal Reserve and get some cheap or free money and go on as before. They expect consequences, maybe even failure of their firm. Certainly loss of their bonuses, maybe loss of their jobs. So we don't have free-market capitalism left in this country anymore, we have everyone believing that if they can hire the right lobbyists, raise enough political action committee money, spend enough time prowling the halls of the Senate and the House and the office buildings arguing for the benefit of their narrow parochial interests then that is the way things will work out. That's crony capitalism and it's very dangerous. It seems to be becoming more embedded in our system."
What's not to like with any of this? We can argue about causes and solutions, but can we agree on this particular problem?
The Refugee listened to all 34 scintillating minutes and can't quite see what sent JK 'round the bend. Yes, Moyers is an insufferable nincompoop, but we knew that going in. The irony, of course, is that the far left and the fiscal right have finally found common ground in deploring crony capitalism.
The most objectionable part of Stockman's comments was his assertion that we need to change the First Amendment to deny corporations the right to lobby and give political contributions. (Why corporations should be muzzled but not unions or enviros remains a mystery.) Nevertheless, his comments against crony capitalism and in support of pure capitalism seemed to make a lot of sense.
Well, at least our ratings are up. I got an email from a good friend of the blog who is enjoying this argument very much.
You know, brothers, Governor Howard Dean doesn't like bailouts and crony capitalism either. I'm sure I can find a clip of his discussing it with Katrina Vanden Heuvel and Rachel Maddow. I'll post it and we'll all agree how very swell it is.
I do not trust either of these men. Both have done extreme damage to this great nation and our concept of liberty and personal achievement. Just because we all agree Jeff Immelt is a dickhead, I am not going to embrace them.
When Stockman longs for the Republican Party of his youth, he is longing for Eisenhower and Ford. Moyers, of course, never came to grips with the idea of a Democrat Party without LBJ.
"Free markets aren't really free" does sound like ThreeSources and I'm sure he'd like to sell us each a copy of his book. But when it comes from a guy who wants to dictate banks' size and business practice, propose extreme campaign finance rules, and has an, ahem, history of government expansion -- I do not accept that he is now calling for lasseiz faire.
I must say my first reaction to this recording was one of excitement over the fact that it could lead to a bridge between left and right so wide and so strong as to absolutely overpower the entrenched crony establishment with a popular laissez-faire revolution. After a second viewing I remain hopeful, and as long as my password continues to function I will strive to advance the topic. (Yes, I know yer just joking about yanking it.)
Let me ask that we seek a point of agreement before we debate whether Stockman is the GOP antichrist or Phil Gramm precipitated TARP. I'm sure we're all on board with "crony capitalism is very dangerous" so how about, this:
When the net worth of a collection of six financial services conglomerations and their six boards of directors approaches the annual GDP of the entire United States private sector, and the members of those boards of directors have unprecedented influence throughout the depth and breadth of the federal government, our principled free-speech rules may no longer be sufficient for preventing this "entitled class" from manipulating the government for their own narrow interests to the detriment of individual liberty and property, particularly in a mixed economic system with fiat currency.
In my youth, "Ma Bell" was deemed "too big" and was broken up. Today, "Wall Street" is deemed "too big to fail" and is instead propped up - by devaluing the net worth of every dollar-denominated individual. Cui bono?
While The Bad Guys and Three Sourcers can agree that crony capitalism is bad, our reasons for believing so are very different. The Bad Guys view capitalism, in toto, as undesireable. Thus, anything that props it up in any form is a bad thing. Three Sourcers, on the other hand, view crony capitalism as a misuse of taxpayer funds, misallocation of resources and questionable ethics. Because The Bad Guys believe that all things good emanate from the government, when crony capitalism falls capitalism will fall with it. Three Sourcers believe the opposite, and that a lack of crony capitalism will lead to better allocation of resources and therefore economic expansion. Thus, we are willing to accept this deal with The Bad Guys (all other things being equal).
We don't have to embrace them, we just have to outmaneuver them.
March 30, 2010
Are Two Mandates Not Enough?
I'm willing to take correction from my economic betters on this, but this concern from Charles Schwab strikes me as -- what's the economic term? -- whacked.
Today's historically low interest rates may be feeding banks' profitability, but they are financially starving our seniors.
In February 2006, when Ben Bernanke was first sworn in as chairman of the Federal Reserve, the federal-funds target rate stood at 4.5%. That same year, the average yield on a one-year certificate of deposit was 5.4%. A retiree who diligently saved for a lifetime and had amassed a nest egg of $100,000 could count on an added $5,400 in retirement income per year. That may not sound like much to the average Wall Street Journal subscriber, but for a senior on fixed incomes that extra money improved the quality of his life.
I hate to beat up on the seniors as the Obama Administration beats up on the Juniors, but is this a rational consideration for monetary policy?
I suspect not. The FOMC already suffers from the dual mandate of inflation protection and employment (Mister Phillips, call your office!) I think that badly damages the former. Trichet only has to worry about the soundness of the Euro (and Greece, and Portugal, but you get my drift...)
I don't think it is the duty of the Fed to ensure the return on fixed income securities -- am I missing something?
Posted by John Kranz at 1:25 PM
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I hope Rupert doesn't come after you for putting the extra words "...incomes that extra money improved the quality of his life" into the public domain without permission.
I tried reading the article for context - to see if it was being raised as a warning to investors rather than a criticism of government.
Rupert is frightened of my influence.
I think Schwab is truly disgruntled that (let's be real, his) investors do not have ready access to a 4% + risk free vehicle.
We've taken our whacks at Helicopter Ben and The Maestro for easy money policies, but depriving seniors of adequate Money Market returns seems a stretch.
Schwab also omits the rate of inflation when interest rates are at 5.4%. When considering inflation, the net yield is probably more like 1%-2%, not unlike what we have now.
October 30, 2009
Quote of the Day
The Fed will not reject it when we, I promise you, next year, take up legislatively the issue. And I think itís very clear. You should not have private citizens like the presidents of the regional banks voting on policy. -- Rep. Barney Frank
I know that there is little common ground on the FOMC around ThreeSources. But I think we might all agree that having the professional politicians in Frank's Finance Committee take over for the amateur private citizen bankers is NOT the solution.
This from the inestimable and unspellable James Pethokoukis, who suggests "...it is clear Congress wants to have more influence over the Fed. This, right at the time when global financial markets will have to remain confident America will not inflate its way out of its debt."
Posted by John Kranz at 3:47 PM
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Fear not, we'll soon have Bernanke's unrepressed, overindulgent "experimentation" combined with Frank's half-incompetent, half-malicious "Dr. Evil" blubbering!
August 27, 2009
Twelve More Opinions
Kudlow asks the Caucus: "Did Obama Make the Right Choice in Re-nominating Ben Bernanke as Fed Chairman?"
It's 9-3 yes with some surprising party line ecumenism.
Posted by John Kranz at 1:55 PM
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August 26, 2009
Russ Roberts (buy his superb The Price of Everything for your favorite lefty college student who doesn't know any better than to be collectivist) is not quite as sanguine on the Bernanke pick as Professor Mankiw:
Worst of all, Bernanke, Paulson and Timothy Geithner have continued the disastrous policy of sustaining bondholders and creditors of reckless financial institutions. Capitalism is a profit-and-loss system. The profits encourage risk-taking. The losses encourage prudence. The bondholders and creditors are the single most important check on imprudence. They care only about one thing: solvency. By making them whole, their incentive to restrain recklessness has been greatly weakened. This sows the seeds of the next financial crisis.
I feel sorry for Bernanke. In one sense, as the world's greatest living authority on the Great Depression, he is the best man for the job. But because he is the world's greatest living authority on the Great Depression, another catastrophic economic debacle of a similar magnitude would be particularly embarrassing were it to occur on his watch. I believe he has gone too far in the other direction.
Hat-tip: Jimmy P
Roberts -- like brother br -- fails to consider FOMC Chairwoman Maya Angelou, but he makes several good and persuasive points. I'm certainly up for a little backtracking.
Posted by John Kranz at 4:27 PM
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