Date: Sat, 14 Feb 2009 05:19:46 -0800 (PST) From: Gilbert Lawrence <[email protected]>
Problem with world economies today is not mere wasteful government spending, but wasteful spending at all levels including individuals and corporations. In the latter situations we call that "poor management decisions". Mario asks: It is no one's else'e business what individuals or corporations spend, other than the individuals and the owners of the corporations. The fundamentals of free market economics require those individuals or corporations who succeed to be well rewarded and those who make poor decisions to be penalised or not rewarded with huge bonuses, bailouts, etc. During the Bush administrations receipts to the Treasury soared from lower tax rates and we had good growth and low inflation for seven years, but wasteful government spending soared as well, adding to the costs of the economic fall-out from 9/11 and the subsequent decision to counter-attack and liberate of 50 million Muslims, which has prevented another attack on the mainland, and providing foreign AID on HIV/AIDS, TB and malaria in particular, leading to the deficits. Then the financial crisis, brewing since the Carter administration and the Community Reinvestment Act, finally caught up with us. Gilbert wrote: The current financial crises has its roots in GREED on the part of the bank executives. In the US and the rest of the world, the bank execs/ lobbyists pressured their governments to loosen up bank regulations, permitting banks to expand beyond their original obligations and take on debt far in excess of reasonable risks. Such was the opinion of a no less a fiscal conservative - Alan Greenspan, former Fed Reserve Bank Chairman. Mario responds: This is false and apparently gleaned from liberal media reports. A brutally honest and far more informed analysis of the problem is provided in the following column by Stanford University economist Tom Sowell: http://www.realclearpolitics.com/articles/2008/10/do_facts_matter.html Excerpt: We also hear that it is the free market that is to blame. But the facts show that it was the government that pressured financial institutions in general to lend to subprime borrowers, with such things as the Community Reinvestment Act and, later, threats of legal action by then Attorney General Janet Reno if the feds did not like the statistics on who was getting loans and who wasn't. Is that the free market? Or do facts not matter? Then there is the question of being against the "greed" of CEOs and for "the people." Franklin Raines made $90 million while he was head of Fannie Mae and mismanaging that institution into crisis. Who in Congress defended Franklin Raines? Liberal Democrats, including Maxine Waters and the Congressional Black Caucus, at least one of whom referred to the "lynching" of Raines, as if it was racist to hold him to the same standard as white CEOs. Even after he was deposed as head of Fannie Mae, Franklin Raines was consulted this year by the Obama campaign for his advice on housing! The Washington Post criticized the McCain campaign for calling Raines an adviser to Obama, even though that fact was reported in the Washington Post itself on July 16th. The technicality and the spin here is that Raines is not officially listed as an adviser. But someone who advises is an adviser, whether or not his name appears on a letterhead. The tie between Barack Obama and Franklin Raines is not all one-way. Obama has been the second-largest recipient of Fannie Mae's financial contributions, right after Senator Christopher Dodd. But ties between Obama and Raines? Not if you read the mainstream media. Facts don't matter much politically if they are not reported. [end of excerpt] Ron Paul is just another politician who has no executive experience in managing anything, unlike the successful Governors like Palin and Jindal, Stanford and Pawlenty, Barbour and Perry.
