The New Clarion

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The Anti-Capitalist Press

January 13th, 2010 by Mike N · 4 Comments · Uncategorized

A clear example of the mainstream media’s hatred for capitalism, free markets, bankers and lenders in general is found in the Jan 13th Detroit Free Press’s editorial titled “It’s Bankers’ turn for the 3rd degree.”

It starts out letting us know that the inquisition commission is ‘bipartisan.’

“The bipartisan Financial Crisis Inquiry Commission Congress appointed last spring opens public hearings today with a charge to explore what its chairman, Phil Angelides, describes with considerable understatement as the central irony of the 2008 Wall Street meltdown.”

And what he’s going to explore is how to make the bankers explain not their innocence but why did they do it. The Freep even suggests the attitude and framework the commission should adopt.

“The commission’s mandate has been likened to the similarly ambitious inquiry into the 9/11 attacks. This time, though, investigators have been able to subpoena many of the principals whose actions and decisions precipitated the crisis. Among those scheduled to testify this week are the CEOs of Goldman Sachs, JPMorgan Chase, Bank of America and Morgan Stanley. None of these bank executives, presumably, set out to destroy the international financial system. Even so, the opportunity to question them is the investigative equivalent of being able to interrogate the perished hijackers of 9/11.”

Notice the snarky word ‘presumably’ used in regard to a possible desire not to destroy the economy.

The financial center is the heart of any economy. It finances all the transactions that take place in a free economy making a growing prosperity possible. When government interferes it creates economic dislocations and hardship. These are then held up as failures of a free unregulated market and the haters of capitalism then call for more controls as the Freep has done and is now doing again. But to place 911 terrorists in the same context as bankers and lenders is an insult to all Americans especially the bankers.

There is also no mention in this editorial of the government’s role in the meltdown. It’s as if there was no role at all. The editorial decries the bonuses of bankers but there is no mention of the bonuses paid to the CEOs of Fannie Mae and Freddie Mac–government enforced creations.

The editorial then lets us know which way the government should go.

“It would be unforgivable if the inadequate legal and regulatory system that allowed credit markets to spin out of control more than a year ago were left in place until a bigger and even more catastrophic crisis unfolds. So the grillings on tap for today and tomorrow should be only the opening salvos in a determined effort to hold banks and other lenders accountable.”

In other words we are being told that bankers and financial people will run around willy nilly in an orgy of irrationality if not controlled by all knowing bureaucrats. My own Senator Carl Levin, D-MI once said that the crisis was caused by Wall Street “running wild.” The demon we are told to fear again is economic freedom and the god to worship is government force.

I can only hope that some of these bankers will defend themselves and their right to use their own judgement. Perhaps they will be able to show how the government regulations encouraged risky behavior. But I doubt they will get a chance to defend themselves at all. They will undoubtedly be questioned only on why they knowingly lent money to people who could not pay it back and will be charged with the trumped up crime of ‘predatory lending.’

(If the hearings are not on TV they can be viewed on c-span.org.)

4 Comments so far ↓

  • Beth Haynes

    There was similar coverage on NPR’s All Things Considered—-all things except that the government might be the biggest cause of the financial crisis. It’s like having the Mafia form a commission to to look into the causes of crime.

  • Bill Brown

    The bankers are the only ones that are left to defend the bonuses. You can’t count on these yokels to do even a barely-passable job.

  • Michael Labeit

    The grilling of the bankers by Congress may very well be political masquerading. The government wants to give the American people the deliberate impression that they are taking the bankers to task over the economic contraction and their acceptance of corporate welfare. It seems however that the government intervention of today occurs with much more collaborative sympathy from the financial industry than it does with disdain. For instance, I’m easily willing to wager that the bulk of U.S. banks would prefer to maintain a “lender of last resort,” i.e., the Federal Reserve, so that they may be enabled to engage in reckless, fractional-reserve based lending and be bailed out by a Greenspan or a Bernanke with tax dollars. In too many cases, the bankers and the bureaucrats are on the same side. I think our immediate fate is much more fascist or corporatist than socialist in the traditional sense. Its not as if the business community as a whole is up in arms over the federal government’s expansion. Hardly. Some oppose it, others champion it. I think the image of the businessman vs. the politician is a bit of an anachronism. Nowadays, both tend to be opposed to capitalism.

  • Embedded I

    IRT Michael Labeit:

    “For instance, I’m easily willing to wager that the bulk of U.S. banks would prefer to maintain a “lender of last resort,” i.e., the Federal Reserve, so that they may be enabled to engage in reckless, fractional-reserve based lending and be bailed out by a Greenspan or a Bernanke with tax dollars.”

    Well of course. In the absence of Objectivism, it makes perfect sense. Follow the rules the government sets, and if anything goes wrong they will cover it.

    Whilst the entire mortgage crash is horrific, look at the people involved, on both sides. They are not Objectivists. Predictably, only half a handful of banks stuck to rational mortgage lending (BB&T, under John Allison being one of them).

    It is no surprise that most banks & lenders fell victim to the cultural and statist milieu surrounding them.

    As Rand said, “It is Sooner Than You Think”. That does not mean the hurdle is insurmountable, but jump too soon and you will stumble into the hurdle, and fall, rather than clear it.