Turns out reality has sharp corners
Posted by aogTuesday, 26 January 2010 at 12:28 TrackBack Ping URL

I just had to laugh in a morbid way at reading this on Instapundit about how President Obama’s declaration of a war on banks (another phase of his War on Prosperity) caused the stock market to tank and potentially destabilize a financial system that the Obama Administration has allegedly been trying to restore. Once again, Obama is so disconnected from reality he’s not even delusional.

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erp Tuesday, 26 January 2010 at 14:47

IMO Obama’s real purpose is to destroy our economy, the ultimate crisis, so we’ll all be so frightened we’ll let them take over our lives completely.

Harry Eagar Saturday, 30 January 2010 at 14:14

I’ll join in the laughter when I discover that you had the same reaction to Reagan and Volcker in 1981-82.

erp Saturday, 30 January 2010 at 15:23

Harry, even you can’t believe that it was Reagan’s goal to destroy our economy in order to create a panic and take over complete control of our country… and I’m not kidding. I believe that is Obama’s handlers’ goal.

Harry Eagar Sunday, 31 January 2010 at 12:57

I know you’re not kidding. It was really clever of them to get Bush to take the first step by gutting the financial system, wasn’t it?

And the way the British and Dutch and Germans fell into step? Priceless.

It was Reagan’s goal to destroy the labor movement. He thought he could do that without cost.

erp Sunday, 31 January 2010 at 13:55

If destroying the labor movement was Reagan’s goal, it’s too bad he didn’t succeed and you know very well who destroyed the financial system and it wasn’t Bush.

Harry Eagar Monday, 01 February 2010 at 21:15

It was Phil Gramm.

erp Monday, 01 February 2010 at 21:59

Gramm eh? That’s a new one.

AVeryRoughRoadAhead Wednesday, 03 February 2010 at 16:07

[Y]ou know very well who destroyed the financial system and it wasn’t Bush.

Who was it?

I know that you blame Clinton and ACORN for starting the housing bubble…

AVeryRoughRoadAhead Wednesday, 03 February 2010 at 16:11

Gramm was certainly an important part of the problem, like Paulson, but his contribution to the fiasco pales next to those of Greenspan and Bush - even Rep. Frank’s actions were more important, IMO.

Harry Eagar Wednesday, 03 February 2010 at 17:36

Gramm is the intellectual father of the mistakes. Not the first, but the one who got closest to the levers of power with a clear idea of which levers he wanted pushed.

Yes, Greenspan and Bush were involved. Yes, Frank advocated policies that were ill-advised. But Gramm was the man who told the world it could stick its hand in the flame without being burned.

As I have noted before, Edward S. Herman explained back in the ‘70s why you shouldn’t do what the Republicans wanted done. I don’t know whether Herman is still alive. If he is, I expect he is feeling a grim satisfaction.

Bret Wednesday, 03 February 2010 at 18:08

The perfect storm that damaged the financial system was dependent on the alignment of a huge number of factors going back years and even decades where if any one factor was missing, it wouldn’t have happened. It’s pretty tough to lay it at one persons feet.

That being said, Obama declaring war on bankers at this point may be ill advised if he wants employment to recover by the midterm elections.

erp Wednesday, 03 February 2010 at 19:24

Rough, if your comment was directed to me, I correctly blame Carter who started the CRA, then Clinton and the Dems in congress, then Obama who created ACORN which became the enforcement arm of the CRA. Bush tried to rein them in, but he had no backing either from the Republican congress nor the subsequent Democratic one.

Annoying Old Guy Thursday, 04 February 2010 at 14:30

erp;

Did you note this at Instapundit? Obama finally admits what you’ve long suspected —

We’ve got to make sure that our party understands that, like it or not, we have to have a financial system that is healthy and functioning, so we can’t be demonizing every bank out there.

The Democratic Party does not like having a healthy, functional financial system but will, when in desperate electoral straights, grudging tolerate it.

erp Thursday, 04 February 2010 at 16:00

… my husband and I just had this conversation.

erp: how can they say things like this (this representing any lie or spin) with a straight face?

Mr. erp: They get away with it, so they do it.

Men are so direct; so un-nuanced.

Even though, I think men have the worst of it in the war of the sexes and wouldn’t want to come back as a man, sometimes it would be nice to not see every single aspect of every situation and just zero in on the obvious.

Bret Thursday, 04 February 2010 at 16:57

aog,

He probably meant to say:

“We’ve got to make sure that our party understands that, because, as we all know, we have to have a financial system that is healthy and functioning, like it or not, we can’t be demonizing every bank out there.”

In other words, “like it or not” probably applies to “can’t be demonizing”. That would make sense, since the Democrats do seem to like demonizing.

AVeryRoughRoadAhead Friday, 05 February 2010 at 00:36

The Democratic Party does not like having a healthy, functional financial system but will, when in desperate electoral straights, grudging tolerate it.

Except that the U.S. haven’t had a healthy, functional financial system since at least 2004, when Goldman Sachs CEO Hank Paulson finally convinced the SEC to change the “net capital rule”, allowing Wall Street’s major investment banks to effectively quintuple their leverage by changing the debt-to-net capital ratio from a maximum of 12:1 to as high as 40:1, while also altering the way that the SEC measured “net capital” so that - surprise, surprise - Bear Stearns, Lehman Brothers, Merrill Lynch, Goldman Sachs and Morgan Stanley all ended up being credited with a higher capital base without changing their operations one iota.

How’d that change work out? Four short years later all of those firms - every single major investment bank in America - was technically insolvent.

And Obama isn’t going to do anything to restore the financial system to health and functionality, since that would end the stream of political largesse, as well as doom any attempts to re-inflate the housing bubble. (Well, instantly doom, as opposed to the inescapable eventual doom - but Obama’s just playing to get through Nov.)

Harry Eagar Friday, 05 February 2010 at 12:07

Clever how ACORN forced that on them, eh?

I am covering the failure of a little bank in my county now. The banker borrowed long and lent short and he still went bust. Bankers really are incapable of learning from their mistakes.

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