Let's face it, liberals won't be happy until there are more regulatory bureaucrats than there are bankers. You'll walk into your bank to cash a check, and three federal regulators will have to sign off on the transaction, with another regulator assigned to decide whether your kid gets a lollipop.Don't believe me? Liberal blogger Simon Johnson:
But based on what we see so far, there is little reason to be encouraged. The reform process appears to be have been captured at an early stage -- by design the lobbyists were let into the executive branch’s working, so we don’t even get to have a transparent debate or to hear specious arguments about why we really need big banks.OK, so who exactly is Simon Johnson, and who put him in charge of deciding whether banks are too big? Well, ho, ho, ho:
Writing in the New York Times today, Joe Nocera sums up, "If Mr. Obama hopes to create a regulatory environment that stands for another six decades, he is going to have to do what Roosevelt did once upon a time. He is going to have make some bankers mad."
Simon Johnson, former chief economist of the International Monetary Fund, is a professor at the MIT Sloan School of Management and a senior fellow at the Peterson Institute for International Economics. He is a co-founder of The Baseline Scenario. Update (April 2009): Johnson has joined the CBO's Panel of Economic Advisers.Johnson worked for the IMF which certainly gives him credibility to talk about banks being too big, eh? As for experience in the for-profit private sector, we have zero evidence that Simon Johnson could turn a profit on the sno-cone concession in Hell.
Which brings me back to the original question: WTF ever happened to caveat emptor?
Banks are not in business to minimize your risk, but to maximize their own profits. Ditto mortgage companies, real-estate agencies, stock brokers, mutual funds, et cetera. I don't care whether you're transacting business with Citibank or a pawn shop, the guy on the other side of the counter is there to turn a profit, and it isn't his job to look after your interests -- except insofar as his reputation for trustworthiness helps him attract customers.
You got scammed by Bernie Madoff? You bought Citi at $54 a share and now it's at $3 a share? You mortgaged yourself to the max for a new Vegas condo in 2005, based on your salary at a development company that got wiped out when the Vegas real-estate boom evaporated in 2007?
Whose fault is all that, huh? Why is it the job of the federal government to cover the economy in foam Nerf padding like a McDonald's Playland so that you never suffer for your own financial stupidity?
Liberals want to make the financial sector so "safe" that I could hand my paycheck to my 10-year-old son, let him invest it in Nintendo games and baseball cards, and still be guaranteed a profit.
Not that I don't empathize with economic losers. I made the clever decision in 1986 to go into the newspaper business, which hasn't exactly been a juggernaut of growth lately, as you might have noticed by the fact that I'm now shaking the tip jar for blog-o-bucks. (Despite their expressions of concern for boosting economic recovery, Tim Geithner and Ben Bernanke ain't hittin' my tip jar.)
Compared to some other people, though, I've been relatively unscathed by the meltdown. I know retirees who lost hundreds of thousands of dollars in the Big Wipeout of 2008, not to mention all the people I know whose jobs are directly linked to the devastated housing market.
Poverty As Security
I might have lost my butt, too, except for the fact that I had a lot less butt to lose. Couldn't afford a D.C. condo during the bubble, you see, so I'm still renting, 12 years after we sold our little Georgia bungalow and moved to Washington. So boo-hoo-hoo for the idiots who are upside down on their mortgages, and boo-hoo-hoo for the fat cats who thought Bernie Madoff was going to make them rich.
Becoming a journalist was, in retrospect, a stupid career move, but maybe I'm not quite as stupid as some of those guys who got rich doing something else and then pissed it all away on bad investments. Why should the federal government intervene and deprive us of future opportunities for schadenfreude?
If you went to the county fair and let a carnie hustle you out of $100, do we need a Federal Bureau of Ring-Toss to protect you from yourself? Maybe a federally-mandated advisory sticker on every video-poker machine at the Indian casino: "WARNING: Winning Not Guaranteed."
Maybe caveat emptor has gone by the wayside because schools don't teach Latin anymore. So let's go ahead and ditch E Pluribus Unum while we're at it. Try a new slogan in English: "Never Give A Sucker An Even Break."
A sucker is born every minute. You see the suckers every time you walk into a convenience store and have to wait in line behind some fool who requires five minutes to complete his lottery-ticket purchase: "OK, give seven of the Pick Three and five Powerballs . . . yeah, right, now give me six each of Lucky Lady, Pot O' Gold . . ."
The 401(k) Lotto
You're reading a blog post about economics and financial regulation, so when you find yourself in that all-too-familiar convenience-store scenario, you almost certainly look down your college-educated nose at the poor idiot throwing away money on lotto tickets.
So, tell me, how's your 401(K) been performing the past couple of year, Mr. Smart Guy? And how much cash-in-hand would you walk away with, if you had to sell your house tomorrow?
If you're one of those whiny pukes who wants Uncle Sugar to fix the economy so that you don't ever suffer a loss on your investments, so that you're guaranteed permanent employment and health care and retirement security, I despise you far more than you despise that chump buying $37 worth of lotto tickets and a pack of Newports. At least those Newports are worth something, compared to a lot of mortgages brokered by Fannie Mae and Freddie Mac.
My idea of "financial reform" is to pull the plug on this bailout/stimulus/regulation/subsidy racket and let some overprivileged Smart Guys get first-hand experience in the virtuous poverty they're always admiring from a safe distance.
Given the record of previous Democratic administrations, I'd say it's an even bet that Tim Geithner goes from Treasury secretary to federal prison inmate, so maybe when he gets out of Leavenworth . . .
Well, he'll sure have a new perspective on the barter value of a pack of Newports, won't he?
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