The New Clarion

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Thank You, Sir. May I Have Another?

March 22nd, 2010 by Myrhaf · 10 Comments · Uncategorized

Health care reform was such a success that Daily Kos is already looking forward to the next big reform.

Treasury Secretary Tim Geithner will be speaking this afternoon about financial reform at the American Enterprise Institute, not exactly a place brimful of folks who give smiles to reforms that involve the government unless it’s reducing its oversight role. Over the weekend, Federal Reserve Chairman Ben Bernanke made some rumblings about the need to do something about firms that are “too big to fail,” calling their existence “pernicious” and an “insidious” barrier to competition. And starting at 5 p.m., Senator Dodd will lead the executive committee of the Senate Banking Committee in the first round of marking up the 1336-page Restoring American Financial Stability Act of 2010. (Summary here.)

Mises has explained the process of how a mixed economy degenerates into socialism. First the government intervenes in the economy; this intervention creates a crisis, which is blamed on the remaining elements of freedom in the economy; then the government intervenes further, creating new crises until the government is in total control. Thus Meteor Blades, the Daily Kos blogger, blames our recent crisis on deregulation:

…financial reform will not go nearly far enough toward reversing the 30-year deregulatory trend that in no small part brought on the economic crisis that has forced analysts over the past two years to reach back to the 1930s for relevant comparisons. And by not going far enough, the final certainty is that a fresh crisis will appear sooner or later and drag Americans outside the Top 10% through yet another round of economic hell. 

The Summary shows a bill written entirely in the statist spirit. Its mission:

Create a Sound Economic Foundation to Grow Jobs, Protect Consumers, Rein in Wall Street, End Too Big to Fail, Prevent Another Financial Crisis

“Rein in Wall Street”? What does Wall Street do but produce wealth and make money? Won’t reining it in mean less wealth, less profit, less money?

Look what the Summary touts as some of the “HIGHLIGHTS OF THE NEW BILL.”

Consumer Protections with Authority and Independence: Creates a new independent watchdog, housed at the Federal Reserve, with the authority to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards, and other financial products, and protect them from hidden fees, abusive terms, and deceptive practices.

I don’t trust bureaucrats to determine “hidden fees, abusive terms, and deceptive practices.” I believe the market and the courts stop these bad things more efficiently than regulations that will hold businessmen guilty until proven innocent, create huge costs that will be passed on to the consumer, and create shortages of “mortgages, credit cards, and other financial products.” This highlight will make the economy worse.

Ends Too Big to Fail: Ends the possibility that taxpayers will be asked to write a check to bail out financial firms that threaten the economy by: creating a safe way to liquidate failed financial firms; imposing tough new capital and leverage requirements that make it undesirable to get too big; updating the Fed’s authority to allow system-wide support but no longer prop up individual firms; and establishing rigorous standards and supervision to protect the economy and American consumers, investors and businesses.

There is a much easier way to end “the possibility that taxpayers will be asked to write a check to bail out financial firms.” Get the government out of the business of bailing out financial firms! And the government wants to “make it undesirable to get too big”? Corporations become big because it’s efficient; that’s where the money is. If the government now decides to stop businesses from getting too big, it will destroy an unimaginable amount of wealth. This highlight will make the economy worse.

Advanced Warning System: Creates a council to identify and address systemic risks posed by large, complex companies, products, and activities before they threaten the stability of the economy.

This highlight shows the underlying premise of this whole bill. Statists think that people left alone with too much freedom to pursue their self-interest end up destabilizing the economy. The opposite is true. The economy is destabilized by government intervention that creates a misallocation of capital. The prime destabilizer is the Federal Reserve, the very entity to which this bill will give more power.

This bill will be a tremendous blow to an already weak economy. We desperately need to repeal Sarbanes-Oxley and dismantle regulations that violate individual rights and hamper the economy. The state has its hobnail boot on Wall Street’s throat; with this bill it grinds the boot more firmly into that throat. Someday the windpipe will be crushed and the victim will be dead. Doubtless, at the funeral Obama will orate in sonorous tones that the deceased killed himself by being too greedy.

10 Comments so far ↓

  • Jeff Montgomery

    I’m impressed; I can’t stand to read DailyKos anymore, because it’s nothing but mindless repetition of liberal mantras. To roughly paraphrase Gandalf, life is too short to bandy words with witless worms.

    The one goal of the above-mentioned act that I agree with (though not the means) is the need for clarity of contracts. I’ve often wondered if the obscure nature of customer agreements is not an end run around contract law. I mean, you need to be a lawyer to understand them; how can that be right? I would not be at all surprised to find there is fraud occurring. They are ridiculously complicated.

    However, preemptive, intrusive agency oversight is absolutely not the way to deal with it.

    And, I suspect much of it is due to the existing regulations imposed on business. Does anyone dream that more regulations are going to make contracts clearer? It will just mean more fine print paperwork that my credit card company (for example) will be forced by law to send, which I can’t understand and won’t read anyway (except with a big thing like a mortgage!).

    The only result of such a bill would be that Chris Dodd will think he’s great for “helping” consumers. How special.

  • madmax

    “Statists think that people left alone with too much freedom to pursue their self-interest end up destabilizing the economy. ”

    This is the view common to both Leftists and Conservatives: individuals left free will harm society. The Left stresses economic affairs so to them “rational man left free will destroy society.” Environmentalism is the clearest example of this. Conservatives (especially PaleoCons) will argue “individuals will undermine society through unrestrained personal sexual freedoms.” They will then argue against “abortion on demand”, sexual liberationism, homosexual marriage, etc..

    But that premise is *the* fundamental one held by all collectivists. They see the lack of coercive force against individuals as dangerous for society. This is a deep seated metaphysical view that once infects a person is near impossible to change. Yet the majority of mankind believe this. I was born six or seven centuries too early I think.

  • Patrick Henry

    Your focus on altruism is misguided.

    There’s NOTHING altruistic about sending faceless storm-troopers in black armor to enforce your mandate to steal what is mine for any reason, ESPECIALLY to the direct benefit of another.

    If “private charities” did this, all involved would be in prison. If someone died in the process, all would be on death row – which is where every one of these tyrants should be.

    We’re going to need a REALLY big gallows!

  • Andrew Dalton

    “There’s NOTHING altruistic about sending faceless storm-troopers in black armor to enforce your mandate to steal what is mine for any reason, ESPECIALLY to the direct benefit of another.”

    But they NEED it, the leftists say. To the extent that this plea has any sway with the public in general (and it has a lot of sway, in fact), the Left has altruism as its trump card to win any political battle.

  • Mike

    @ Patrick Henry —

    Altruism at its philosophical core is the moral subordination of the individual to the need of other individuals. In that respect, your stormtroopers are most certainly serving the Altruist Emperor. And because they’re doing it “to give the needy what they need,” altruist-tainted Middle America lets them do so without rising up in outrage. Andrew Dalton calls this a political trump card, and that’s essentially how we’re seeing it used.

    At no point do most people see the inherent contradiction in this — they violating the rights of the individual to give to other individuals, but why does it not work in reverse? Are not the people being robbed also individuals, who are now in need thanks to the redistribution? It’s like something I remember from when I interned at the criminal court during law school. They separate the rapists from the other prisoners. I asked why, and was told “Because the other prisoners hate the rapists.” I asked what would happen if the rapists were not separated. “The other prisoners will rape them.” Oh, that expl–no, wait a second, what?!

    Great handle BTW. Don’t know if it’s your real name, but it is, in fact, my real middle name. During the span in 1974 in which I was born, it was trendy to give compound middle names. I guess I was lucky I didn’t get “Nathaniel Superfly.”

  • Ernest Brown

    “At no point do most people see the inherent contradiction in this — they violating the rights of the individual to give to other individuals, but why does it not work in reverse? Are not the people being robbed also individuals, who are now in need thanks to the redistribution?”

    Even though these fellows are whinging lefties in real life, even they get it:

    http://www.youtube.com/watch?v=qLkhx0eqK5w

  • Mark

    I suppose pointing out to the Kos koolaid kids that what the banks were doing all throughout the housing bubble and the wreckage we are all currently living with at present was and is already regulated, but that those charged with enforceing said regulations didn’t do it then, and don’t enforce them now, would be a lost cause.

  • Myrhaf

    I think it would be a lost cause. They are so certain that greed caused our problems because it fits their morality. It’s the same reason Obama created fantasies about doctors needlessly amputating limbs to get money. They believe the pursuit of self-interest is evil, and that only state workers motivated by altruism can do good.

  • Dedicated_Dad

    I’ll first confess I haven’t read all the comments.

    I’ll probably get immolated for this, but… I don’t care.

    All here – including the comments I DID read – are suffering from a couple of grave misconceptions:

    (1) There is **NOTHING** altruistic about the welfare-state.
    (2) There is **ZERO** conflict between true altruism and objectivism.

    Those may seem bold statements, but a little thought should prove they’re not nearly as bold as they seem…

    (1) The welfare state robs – at the point of a government gun – *ALL* parties involved – the producer of his property, and the looter of something infinitely more valuable: his self respect, personal responsibility and initiative.

    The politicians who vote for this sickness always exempt themselves – hence there is no altruism at all, but rather a desire to buy the votes of one with property stolen from another.

    Ergo, the entire thing is a criminal farce, with both the politician and recipient trading self-respect for loot, leaving their victim enraged at the crime. Where’s the altruism? There is NONE.

    (2) I’ve ALTRUISTICALLY given significant portions of my income to the benefit of others. I’ve done so because it benefited me to do so. In sum, I gladly traded my property for something on which I place a higher value. This is no different than any other objectivist/capitalist transaction.

    In this case, I bought good feelings with my hard-earned money – I started to say “instead of some necessity or luxury” but in fact those feelings are – for me – both necessity AND luxury.

    Further, I bought good will. I bought enhancement of the life of someone who I deemed worth the expense. In one notable case – where I helped a highly intelligent young man from a truly horrendous family enter college – and in the process I bought myself an “adopted” son, and in so doing I also simultaneously rid my small town of a derelict drunkard/addict and added a sober, productive citizen.

    The whole episode so influenced the boy’s worthless mother that she sobered up and bettered her life as well. Frankly, I consider the result worth many times what it cost me – meaning I made what was perhaps the most profitable transaction of my life.

    **EVERYTHING** we humans do is selfish – even those allegedly pure, true altruists (like “mother teresa”) do what they do because they derive personal benefit from the effort – from the cost.

    Hopefully this will provide SOME value for the reader – if so, the goal I set for THIS effort will have been satisfied as well…

    Respectfully,

    DD

  • Patrick Henry

    Criminals like Dodd are selfish, looting bastards like all others. They too to derive personal benefit from property stolen from others.

    They *CLAIM* to be altruists, but in reality they’re stealing *MY property, and using it to by good feelings and votes for themselves.

    That’s not altruism, that’s THEFT – and since .gov officials are involved IT IS TYRANNY.