Sometimes you'd rather be wrong

In 2000, I worked at USBank. In 2000, USBank Investments put up a booth in our building to try to sell life insurance to us, its 'internal customers.'

I was sufficiently enough of a historian that I knew about the problems of the Great Depression, and the barriers which were put up following the collapse in 1929, to know that there were good reasons for those barriers. Some of those barriers survived many years, and one of the key reasons for their survival was that good, smart people both remembered the Great Depression and the fact that exposing a bank to risk generated by life insurance or other investment products, was essentially creating the risk that a bank might try to cover high-risk investment costs out of its traditional loan/deposit relationship business practices.

So, I replied to the nice, attractive young woman who asked - "No, I don't support actions which allow Banks to act like investment companies." The woman was rather shocked, she plainly didn't understand what I was referring to, nor the reason for my objection. When I explained that it created the potential for a bank to expose traditional deposits to risks on its other 'balance sheet'/side of the house, she was rather dumbfounded.

The 45-50ish woman who was standing there supervising stepped in and explained, "He is referring to the repeal of the Glass-Steagall Act, which among other things kept Banks from being insurance companies. No worry sir, the repeal (done in 1999) doesn't allow for the cross-over of balance sheet activities."

I replied, "For now, and only as far as you know about. Clearly any company may not disclose charges assigned to the parent, or vice versa." That was the end of the conversation.

Now it's 2009. Cearly there WERE exposures between the banks and thier investment firms, such barriers were only on paper. Yet, we hear that many of the problems of the banking industry stemmed from regulation, such as the Community Redevelopment Act - or other bogus claims of issues stemming from Barney Frank's permissive attitudes about derivatives in the mid-2000's.

Yet we don't hear about what I commented on recently to some right-wingers, namely that Senator Phil Gramms of Texas was the spearhead of repealling Glass-Steagall, and that he also lead the charge to make it so that derivatives didn't have to be audited/weren't under the purview of the SEC or any other oversight agency for that matter. In fact, Phil Grams earned the nick-name 'Senator Gram-stander' during his time in the Senate (and by the way, this guy was going to be McCain's chief economic advisor - http://www.bloggingstocks.com/2008/09/15/100-year-crash-mccain-advisor-spurred-62-trillion-derivatives/). The link enclosed descirbes how Grams also helped to deregulate Credit Default Swaps.

In truth, Grams wasn't alone, Democrats, including Bill Clinton, signed-off on this nonsense, and they deserve some blame, but it was Alan Greenspan, and the 'dergulatory zealots' that hailed from Ronald Reagan's presidency which pushed this nonsense to it's zenith. It was not CRA, it was not regulation, but the absence of it, which allowed for derivatives and CDS' to swamp the markets with bad debt.

When I hear my conservative friends complaining and blaming everything BUT the truth, I think back to the day I objected, and to the day that I told Mitch Berg and others that in fact Grams was the culprit more so than any other person in Washington, Grams the poster child of the deregulation movement, the poster child of the 'for sale sign' in Washington as well, who deserved scorn and contempt. In fact that it was Grams and his type of people who argued that today would never come. When I think back to those warning and pronouncements, I will tell you that I sincerely wish to have been wrong.

Today there is an extensive article in the Star Tribune written by Patrick Delaney, a Securities Partner (attorney) at an investment servicing law firm here in Minnesota. It's an outstanding article, and pulls no punches in blaming Grams and Clinton, but also deregulation. It identifies the missteps we've taken, including removal of sound limits put in place the last time we allowed banks to become investment companies. I recommend it to anyone who believes even for a moment that CRA or the poor or whatever else, caused our current problems. It's a primer for beginning to realize that big business runs Washington, not the people, and runs it regardless of which party is in charge. Our time to change this paradigm is only now, it took 70 years to undo good changes which came out of the Great Depression, and only really happened when the greatest generation died, perhaps if we strike while the iron is hot now, we can forestall again for 70 years the repeat of what we are experiencing today as a result of the power of money corrupting folks like Phil Grams - and leading astray the sycophants of the rich who think that if they merely allow the pernicious in society more power, that they'll somehow become powerful too.

It is time the right-wing in this country woke up and smelled the coffee (or stink) of their own financial myopia, and recognized that greed and stupidity win out over good sense when people see a fortune to be made. Regulation is our way of preventing catastrophe, and from keeping not the GOOD people from doing ill, but the 5% who WILL do ill, from wrecking the train.

Treason? Really??

In 2003, anyone who criticized George Bush's policies, especially, but not limited to, the invasion of Iraq was called a traitor.

Any Democrat who spoke out against that idiocy was called a hundred ugly things, weak on terror, weak on defense, anti-American, etc..

Even as recently as last fall, Republican Representative Michelle Bachmann called for Congressional investigations into "Anti-American sentiments/feelings."

Now, Rush Limbaugh, the defacto leader of the remaining Republican extremists, says, 'Well if it was okay for the Democrats to object to Bush, why isn't OK for me to object to Obama trying to turn the country away from free enterprise..."?

Because Rush, you didn't say it was OK then, you called them traitors and worse. You accused them of seeking to provide 'therapy' to terrorists as a response to bombings. So that either makes you the world's biggest traitor (in your words), or, as always, the world's biggest hypocrite. In the time of the greatest economic crisis since 1929, your reaction is not to offer to temper the potential proposals of Obama, but instead to hope he, and with him, the country fails, so that your brand of extremism (and your voice with it) can be resurgent.

Instead of suggesting something other than ONLY tax cuts, instead of trivializing the problems of pay and profit inequities, the destruction of US productive capacity, the offshoring effects, you continue with your hyperbole about how 'taxing job creators kills jobs' and worse that 'Obama wants to destroy what's best about America.' I for one won't fall into your rhetorical trap - because arguing your nonsense is exactly what you want.

Instead, I'll point out what a colossal hypocrite you are. YOU called Democrats traitors, YOU referred to them as anti-American, YOU called torture 'fraternity pranks', YOU demeaned Michael J Fox for over-medicating himself (which he did to try to be sure his symptoms DIDN'T appear) and accused him of purposefully UNDER medicating to exaggerate his problem. You've been the chief architect of hate in this country for nearly 30 years - purchased by the rich to defend them against populism, not the other way around. NOW you seek to ensure that the work at the edges of the economy - because that's all the Government can do - you seek to block thw work the President and the responsible people, the adults, want to do to try to stave off collapse. You want to ensure that fails, mostly for your own political purpose, and because you can't possibly stomach - with your $1B fortune made off of spewing hate - the idea that maybe the rich SHOULD take a little bit less, so that the rest of us can have a little bit more. So you preach your hate, your desire to see us fail, in time of great crisis, you lie and say that the left wants to destroy the rich, destroy the country.

Dissent is still legal, and I'll defend to the death your right to spew. But make no mistake, you are nothing NOTHING more than a mewling hypocrite. And the great and funny part is, Obama has made your hate-speech the center of the debate - he has made you the icon of your party, and while you're not really a traitor, you certainly have become a tool. Such is the plight of bullies when confronted by their superiors.