Patterico's Pontifications

4/5/2009

Glenn Greenwald needs a copy of Liberal Fascism

Filed under: General — Karl @ 9:57 am



[Posted by Karl]

Glenn Greenwald (sock-puppeteer turned populist) got in touch with his inner Howard Beale after watching PBS:

Last night, former Reagan-era S&L regulator and current University of Missouri Professor Bill Black was on Bill Moyers’ Journal and detailed the magnitude of what he called the on-going massive fraud, the role Tim Geithner played in it before being promoted to Treasury Secretary (where he continues to abet it), and — most amazingly of all — the crusade led by Alan Greenspan, former Goldman CEO Robert Rubin (Geithner’s mentor) and Larry Summers in the late 1990s to block the efforts of top regulators (especially Brooksley Born, head of the Commodities Futures Trading Commission) to regulate the exact financial derivatives market that became the principal cause of the global financial crisis.  To get a sense for how deep and massive is the on-going fraud and the key role played in it by key Obama officials, I highly recommend watching that Black interview (it can be seen here and the transcript is here).

Greenwald, as a lawyer, could pretty easily discover that there was a very real question about whether the CFTC had jurisdiction over certain types of derivatives — if he bothered to take notice that the term “derivatives” encompasses a wide range of products.  Had he done so, it might have occurred to him that casting doubt over the legality of trillions of dollars in existing contracts might have had an economic impact more immediately recognizable than what we see now with hindsight, which involved not only the burgeoning derivatives market (as Greenwald seems to believe), but easy money from both here and abroad, decades of policies pushing homeownership and lowering lending standards, etc.

However, Greenwald’s problem is really larger than his ignorance about financial regulations.  Greenwald’s larger assumption is that a lack of regulation was the problem.  In Liberal FascismJonah Goldberg chronicles how Big Business has always owned the regulatory process:

Since the dawn of the Progressive Era, reformers have constructed an army of straw men, conjured a maelstrom of myths, to justify blurring the lines between business and government. According to civics textbooks, Upton Sinclair and his fellow muckrakers unleashed populist rage against the cruel excesses of the meatpacking industry, and as a result Teddy Roosevelt and his fellow Progressives boldly reined in an industry run amok. The same story repeats itself for the accomplishments of other muckrakers, including the pro-Mussolini icons Ida Tarbell and Lincoln Steffens. This narrative lives on as generations of journalism students dream of exposing corporate malfeasance and prompting government-imposed “reform.”

The problem is that it’s totally untrue, a fact Sinclair freely acknowledged.“The Federal inspection of meat was, historically, established at the packers’ request,” Sinclair wrote in 1906. “It is maintained and paid for by the people of the United States for the benefit of the packers.” The historian Gabriel Kolko concurs: “The reality of the matter, of course, is that the big packers were warm friends of regulation, especially when it primarily affected their innumerable small competitors.” A spokesman for “Big Meat” (as we might call it today) told Congress, “We are now and have always been in favor of the extension of the inspection, also to the adoption of the sanitary regulations that will insure the very best possible conditions.” The meatpacking conglomerates knew that federal inspection would become a marketing tool for their products and, eventually, a minimum standard. Small firms and butchers who’d earned the trust of consumers would be forced to endure onerous compliance costs, while large firms not only could absorb the costs more easily but would be able to claim their products were superior to uncertified meats.

This story plays itself out again and again during the Progressive Era. The infamous steel industry—heirs to the nineteenth-century robber barons—embraced government intervention on a massive scale. The familiar fairy tale is that the government stepped in to control predatory monopolies. The truth is almost exactly the opposite. The big steel firms were terrified that free competition would undermine their predatory monopolies, so they asked the government to intervene and the government happily obliged. U.S. Steel, which was the product of 138 merged steel firms, was stunned to seeits profits decline in the face of stiff competition. In response, the chairman of U.S. Steel, Judge Elbert Gary, convened a meeting of leading steel companies at the Waldorf-Astoria in 1907 with the aim of forming a “gentlemen’s agreement” to fix prices. Representatives of Teddy Roosevelt’s Justice Department attended the meetings. Nonetheless, the agreements didn’t work, as some firms couldn’t be trusted not to undersell others. “Having failed in the realm of economics,” Kolko observes, “the efforts of the United States Steel group were to be shifted to politics.” By 1909 the steel tycoon Andrew Carnegie was writing in the New York Times in favor of “Government control” of the steel industry. In June 1911 Judge Gary told Congress, “I believe we must come to enforced publicity [socialization] and government control . . . even as to prices.” The Democrats — still clinging to classical liberal notions—rejected the proposal as “semi-socialistic.”

Moreover, had regulations Greenwald imagines worthy been promulgated, there was no guarantee that Wall Street would not have innovated its way around them — which is part of how derivatives came into being in the first instance.

That Greenwald does not know or care about any of the above signals to the reader that it is really little more than window-dressing to his larger complaint about the “sleazy oligarchical control of both the Executive and legislative branches” that he managed to miss for the years in which the problem supposedly was an overweening Pres. Bush running roughshod over Congress and everyone else.  At least he got to appear on that same PBS program to denounce the establishment media for missing it, too.

Update: I really should have underscored that Greenwald’s PBS appearance was for Bill Moyers, who was a homo-hunter and planter of questions for White House press conferences before zipping through the revolving door back to journalism.  Because for Greenwald, self-promotion trumps such considerations.  Truth to powah, Gleen(s)!

–Karl

57 Responses to “Glenn Greenwald needs a copy of Liberal Fascism”

  1. This pretty much makes you a homophobe.

    RACIST!!!

    JD (0088ab)

  2. As a side note, my local grocer buys his meats from a regional packing house rather than one of the more well known chains of suppliers.

    As a consumer, there are at least two distinct advantages to me. First, the meats are more flavorful; and secondly, less expensive than the big chains outside the hollow.

    It might be argued that the meats don’t “meat” teh same standards as the larger chain…and that is true, the local grocer’s “Choice” meats are barely meeting that standard, while the chains “Choice” meats are comfortably so, even verging on what would have been considered “Prime” in my youth. But its also what gives them more flavor.

    As a benefit to my grocer, he can sell at a lower price than the chain, and still mark up his meats much more than he could if he substituted meats from a larger supplier.

    Is the packing house meeting all of the sanitation requirements for the USDA standards? I dunno. But given the incestuous relationship of the packing industry to the inspection process to begin with, I’m fairly confident that the big chains aren’t all that much better, if at all. And I have the opportunity to see how my local butcher handles the meats from delivery to display, which has been rather reassuring.

    EW1(SG) (e27928)

  3. This is great stuff! Now I’ll definitely have to read the book — great ammunition against the worshipers of government regulation.

    Brother Bradley J. Fikes, C.O.R., (092234)

  4. I buy from a rancher 20 miles away and have the meat processed at a local butcher. Grain/grass fed, no antibiotics, no feedlot. I don’t know what the “grade” of meat but is better than any thing in the stores. It cost me $2.20 per pound for 300 pounds, cut and wrapped. You do need a freezer, though.Steaks, ribs, roasts, burger, etc. I can’t stand the smell of store bought beef anymore.

    Tim Pfister (ceeb9a)

  5. Tim – It cost me $2.20 per pound for 300 pounds, cut and wrapped. You do need a freezer, though.

    Unless you’re really, really hungry.

    Apogee (f4320c)

  6. By 1909 the steel tycoon Andrew Carnegie was writing in the New York Times in favor of “Government control” of the steel industry. In June 1911 Judge Gary told Congress, “I believe we must come to enforced publicity [socialization] and government control . . . even as to prices.”

    Less surprising in that Andrew Carnegie apparently had a few sentiments of a limousine liberal. But to be fair to him, some of his ideological foolishness (per below) does deserve a bit of leeway since he did donate most of his fortune to various charitable causes.

    Speaking of nonsensical political bias, some economic analysts (such as at UCLA) conclude that Franklin Roosevelt exacerbated the effects of the Great Depression by allowing businesses to collude in their pricing, mainly by enabling them to keep prices artificially high.

    As for the current era, it is interesting that a few of the bigwigs of Wall Street who’ve allowed the current mess to grow in size and seriousness, if not triggering it to begin with, also can be categorized as having a soft spot in their heart for liberalism and liberal politicians. Also ironic since it goes against the stereotype long favored by, as one example, quite a few on the left (“Big business is greedy, power hungry and Republican!!!”) throughout the media and elsewhere.

    Of course, a lot of this goes beyond politics, ideology and partisanship. However, I do find it interesting that when you scrutinize the quality of judgment and policymaking of a person, and that quality runs the gamut from mediocre to very poor, in so many instances the person in question can be seen as having quite a few left-leaning sentiments.

    www2.hawaii.edu:

    The Carnegie family at the time was theologically liberal; Will Carnegie, Andrew’s father, walked out of his Presbyterian church one day over a dispute with the Calvinist creed (Carnegie, 22). They later showed Unitarian and Swedenborgian sympathies (Carnegie, 21). Andrew himself is said to have been less than God-fearing (Livesay, 18). Politically, the family was involved in the Chartist movement in Scotland (Livesay, 7); in his autobiography Andrew recounts how as a child he echoed his family’s liberal/radical sentiments (Carnegie, 8), and ‘Death to privilege’ was a motto he formed early in his youth (Carnegie, 11).


    New York Times, November 2008:

    The president-elect’s choices for his top economic advisers — Timothy F. Geithner as Treasury secretary, Lawrence H. Summers as senior White House economics adviser and Peter R. Orszag as budget director — are past protégés of Mr. Rubin, who held two of those jobs under President Bill Clinton.

    Mr. Summers, who may well end up being Mr. Obama’s closest economic adviser, has been especially public in calling for a big stimulus package. Many saw his touch in Mr. Obama’s call this weekend for the stimulus plan to create or save 2.5 million jobs.

    “Everyone recognizes that we’re looking at deficits of considerable magnitude,” said Jared Bernstein, an economist at the liberal Economic Policy Institute. “Whether it’s Bob Rubin, Larry Summers or the most conservative economist, that is a widely shared recognition.”

    Liberals like Mr. Bernstein had long had an aversion to the kind of centrist economic policies of the Clinton years, which they felt were too concerned with deficit reduction and not focused enough on investment programs for labor and the middle class.

    But Mr. Bernstein’s past differences with Mr. Rubin have so softened that the two men recently wrote a column together about their new common ground on spending, regulation and trade protections for workers.

    As for Mr. Summers, he has “truly evolved,” Mr. Bernstein said, based on his reading of Mr. Summers’s columns in the Financial Times this year. Both men have been advisers to Mr. Obama, and at a recent meeting, Mr. Bernstein recalled: “I told him, ‘Boy, Larry, your views on trade, on income inequality, on stimulus spending, they’re approaching ours at E.P.I.’ And he sort of huffed and puffed, and said, ‘Oh well, changing circumstances.’ ”

    Mark (411533)

  7. #4 Tim Pfister:

    I buy from a rancher

    When I was a kid growing up, many of my extended family were ranchers…which is probably why I’m not crazy about standard supermarket beef.

    Had some really great beef in Panama, of all places…locally grown, and about $2/lb cheaper than the imported US beef in the base exchanges. Also, the vanilla ice cream there was superb.

    Hmmm, think I’ll break out the grill and run to the grocer’s. ^_~

    EW1(SG) (e27928)

  8. Tangible, real world products like meat and steel aren’t really in any way analogous to the myriad of financial products that are at the heart of the global financial crisis. Sure, meatpackers don’t want to be known as the guys that sell you rat poo, but the whole point of our byzantine financial system is to make it as confusing as possible so a small group of people can suck billions of dollars out of the system, and they can only do that if there is no regulation. Surely you can see the difference?

    And with regards to Glenn Greenwald being in this only for self-promotion, I’m pretty sure I’ve seen Jonah Goldberg on far more mainstream programs much more frequently than Glenn. So…

    TEH NARRATIVE (863676)

  9. By the way, TEH NARRATIVE, this is among the more stupid of the many stupid comments you’ve made:

    “the whole point of our byzantine financial system is to make it as confusing as possible so a small group of people can suck billions of dollars out of the system, and they can only do that if there is no regulation.”

    This is a supremely stupid line because the reality ( something you have little truck with, I know ) is that regulation does not in and of itself prevent any behavior. This is because with people like Senator “Friend of Angelo” Dodd watching things, regulation is in fact the prime method of “sucking billions of dollars”.

    There has been a great deal of “regulation” of the financial system. The idea that there was some great move of deregulation on which one can pin the crisis is just the continuous raving of the ignorant.

    SPQR (26be8b)

  10. The fact that our tax dollars go to support ideologues and all – around scumbuckets like Moyers continues to enrage – when I was called recently to support my local PBS outlet, I asked politely why I should dig deeper to support such a thoroughly noxious human being.

    Two complete journalistic hacks giving each other hummers – just lovely.

    Dmac (49b16c)

  11. the reality ( something you have little truck with, I know )

    We’re still waiting for him to support his rants in the prior threads…gee, wonder why he has chosen not to do so?

    Dmac (49b16c)

  12. but the whole point of our byzantine financial system is to make it as confusing as possible so a small group of people can suck billions of dollars out of the system, and they can only do that if there is no regulation

    The problem is not that there was no regulation, as you assert. There was plenty of regulation.

    Just who is the small group of people you keep alluding to? Exactly how did they suck billions of dollars out of the system?

    I’m curious to know, because I’d like to suck a few hundred million out of the system, and if you can provide me with a blueprint, I’ll give you a 10% finder’s fee.

    Steverino (69d941)

  13. From the prior thread:

    If I feel qualified to call someone a moron, I’m going to do it. What do you want me to tell you? That I went to college? That I have a job? What do those things have to do with Friedman’s economic models being abject failures wherever they’ve been implemented?

    Based on the economic discourse you’ve provided up to this point, you’re not qualified to wipe my ass. How about actually proving your many inane theories, or maybe just this one time? Pretty please? Can you do an actual search for those awesome sources to back up those voluminous emanations from your blowhole? How about it, Poncey?

    Dmac (49b16c)

  14. Steverino, not merely “plenty” of regulation but often regulation itself provides the cover for individuals and businesses to exclude competitors through raising barriers to entry ( see the theme Glenn Reynolds has run on licenses for interior decorators just as a simple example ).

    Bernie Madoff’s example shows the failure of regulation, as he even sat on SEC committees in the past.

    More to the point of current events, TEH NARRATIVE is still showing his utter ignorance of the contribution regulation actively made to the current crisis in the effects of the CRA and the intervention of the FHA and Fannie Mae / Freddie Mac entities.

    SPQR (26be8b)

  15. When I run across these pieces, I always sigh at the trust people like Karl have in the American consumer. I don’t think American consumers are capable of performing a microbial analysis on their food and water, or determining the toxicity of a food additive. Most just don’t have the training and equipment. I think Jonah isn’t disputing the fact that conditions were bad, rather that the people behind them were not fighting in the Standard Liberal Narrative(tm).

    I wrote a blog entry a ways back about the tendency of industries to favor mandatory regulation, if they actually intend to comply with it. It’s like how hockey players wanted the officials to require them to wear face protection. They didn’t want to face a competitor using no protection to achieve an edge.

    OmegaPaladin (3468f5)

  16. TEH NARRATIVE writes:

    Tangible, real world products like meat and steel aren’t really in any way analogous to the myriad of financial products that are at the heart of the global financial crisis.

    Which makes the former far simpler to competently regulate than the latter. Thanks for making one of my points.

    Karl (3bf5f8)

  17. When I read a comment by someone like OmegaPaladin, I sigh at the kind of childishness that sets up a lassez-faire strawman to knock down, without bothering to grasp the larger point that the issue Greenwald is pretending to raise — and that I am critiquing — has little to do with regulation or deregulation.

    I won’t even bother to explain why a pro sports league is hardly an economic model applicable to other industries.

    Karl (3bf5f8)

  18. Surely you can see the difference?

    Nope.

    The heart of most financial markets is the trade in tangible assets at their core. A failure to recognize this is to leave yourself vulnerable to exploitation.

    That doesn’t mean that all financial marketables are based solely on tangible assets, but if you want to play in the market with those instruments, then you had better learn the rules of the game.

    EW1(SG) (e27928)

  19. Although, Karl, the concept of using regulation to hobble competitors is something that both Gleen and OmegaPaladin seem to acknowledge but not actually understand the relevance of.

    SPQR (26be8b)

  20. Bernie Madoff’s example shows the failure of regulation

    The crux of so much of this issue is how people respond to irresponsibility and irresponsible members of society. Simply put, one side of the political aisle is far more accomodating of — far more the enabler to — a do-your-own-thang ethos, of if-it-feels-good-do-it behavior. Devoted followers of the belief that just as long as a person’s heart (or political slant) is in the right place, he or she can do no wrong (Hi, Mr & Mrs Clinton! You two are such caring and compassionate people!).

    So whether it’s a matter of too much government or too little, or the right amount of legality or the lack of such, or too much regulation or too little, ultimately quite a few people and the circumstances they find themselves in — or encourage to exist all around them — are most impacted by their sense of responsibility, of what’s right or wrong.

    The ultimate extreme example of that is evident in the city of Detroit or Washington DC, where most voters in such communities — virtually all of them big backers of the Democrat Party and the guy now in the White House — have a track record of voting (and re-voting) for people who’ve compiled a record of felonies and misdemeanors.

    Then, of course, there are all the folks appointed by the current White House administration who are known to have had, uh, certain issues with paying their taxes.

    April 4 (Bloomberg) — Bernard Madoff used a simple tactic to deceive even the most sophisticated of clients, such as Fairfield Greenwich Group: He refused to answer or he lied whenever he was asked probing questions.

    Madoff, who prosecutors say lied to all his clients, dodged questions about how he delivered steady returns on money raised by Fairfield Greenwich, his largest feeder fund, according to a complaint filed April 1 by Massachusetts Secretary of the Commonwealth William F. Galvin.


    Johnrlott.blogspot.com:

    In writing my book Freedomnomics, I started keeping track of the political affiliation of prominent criminals. Needless to say, Madoff is not unusual. John Fund has this over at the WSJ’s Political Diary:

    Bernard Madoff, who appears to be the perpetrator of the largest financial fraud ever, was a politically active player in Washington.

    The Madoff clan were also large donors to political candidates. They donated over $380,000 to individual politicians and political action committees since 1993, most of it going to Democrats but with a few prominent Republicans thrown in, such as scandal-tarred Rep. Vito Fossella of Staten Island.

    As late as September of this year, Mr. Madoff was still giving generously to his favorite political cause: the Democratic Senatorial Campaign Committee headed by New York Sen. Chuck Schumer. Mr. Madoff contributed $25,000 in September, bringing his total donations to the DSCC to $100,000 over the last three years.

    Mark (411533)

  21. Steverino, your #12 is absolutely hilarious while effectively demolishing TEH NARRATIVE’s ridiculous argument.

    Flippancy combined with bone-crushing truth.

    Well played.

    Paul (creator of "Staunch Brayer") (5c06a9)

  22. Greenwald’s flailings on this subject are not surprising. Finance and economics are subjects at which most politically oriented Deomcrats are teh SUXXOR.

    daleyrocks (5d22c0)

  23. Alas, my illustration of TEH NARRATIVE’s tendency of writing silly statements, using his #8 above, was made obsolete by an even more stupid line from TEH NARRATIVE here.

    SPQR (26be8b)

  24. I am still interested in that honest discussion with TEH NARRATIVE about how Chimpy McHitlerBurton had double super sekkkret plans to cancel the 1st Amendment.

    JD (d31b07)

  25. Wow, great article and great post.

    It could be subtitled “Gleen Grows Up.”

    Patricia (2183bb)

  26. Franklin Roosevelt exacerbated the effects of the Great Depression by allowing businesses to collude in their pricing, mainly by enabling them to keep prices artificially high.

    It depended on what industry you were in. Amity Schlaes gives examples such as the Kosher chicken butchers in New York who were prosecuted for selling chicken at less than the approved price. Wendell Willkie spent years fighting Roosevelt’s determination to socialize electric power with TVA. It was all arbitrary.

    Both Roosevelt and Hoover were trying to keep prices and wages up; a disaster in a deflation economy. That is a major reason why unemployment stayed so high. Obama has learned nothing as demonstrated by his efforts to keep UAW wages and benefits high by nationalizing GM.

    Bradley, if you haven’t read LF, you must. It is terrific. I may go at it again. Right now, I’m finishing the Black Swan and Meltdown.

    Mike K (2cf494)

  27. How does Greenwald reconcile Hank Greenburg’s Congressional testimony, and the testimony of the head of the OTC, that OTC had regulatory oversight of AIG’s Finacial Products subsidiary but failed to anticipate where the market was going and AIG-FP’s actions in it, after Greenburg was forced out by Elliot spitzer?

    AD - RtR/OS (dbf3b6)

  28. Well Lookie here. Associated Press finally decides Saddam supported terrorism.

    ” The man behind them: Abu Ibrahim, who controlled a web of dangerous operatives while living in Baghdad under the protection of Saddam Hussein.”

    http://news.yahoo.com/s/ap/20090405/ap_on_re_us/elusive_terrorist

    Dennis D (ae900a)

  29. There has been a great deal of “regulation” of the financial system. The idea that there was some great move of deregulation on which one can pin the crisis is just the continuous raving of the ignorant.

    There was deregulation, but to spare myself the 30 minutes looking up the details, let’s pretend your assertion was true and there was *no* deregulation between 1998 and 2008

    This is a still a semantic game, and a stupid one. There is no abstract quantity of regulation that should have been “enough” necessary to stop the financial crisis. Every financial crisis is unique and needs unique regulation applied in a timely manner to avert the problem before it becomes massive in size. Regulation that isn’t dynamic – constantly being added to and subtracted from under meaningful oversight – will be evaded and chewed to bits, as was done on Wall Street. And here we are.

    We had rules to keep the overall leverage in the system low, and Wall Street began to get around them. And when they began to do that, we did.. bupkis. Deregulation or lack of regulation, it’s basically the same thing. It’s the Republican motto on everything, and it f*cked us over.


    Moreover, had regulations Greenwald imagines worthy been promulgated, there was no guarantee that Wall Street would not have innovated its way around them — which is part of how derivatives came into being in the first instance.

    Ah, yes. The great “behavior control is futile” canard. This is kind of like when we pass laws against robbing banks, criminals will find ways around them – so why bother?

    Institutional control requires constant battle. When they evade the spirit of the regulation, you smack them in the head and adjust the regulation to compensate. You regulate end states, like a leverage ratio not above 10/1, rather than behavior, and let Wall Street figure out how to obey, and if they fail to obey you throw their a**es in jail. George Bush’s regulators weren’t worth sh*t on a shingle – and yes, Clinton’s team didn’t get it either. But in 1999, there was a lot less evidence to ignore.

    More to the point of current events, TEH NARRATIVE is still showing his utter ignorance of the contribution regulation actively made to the current crisis in the effects of the CRA and the intervention of the FHA and Fannie Mae / Freddie Mac entities.

    I’m really going to enjoy this. SPQR, please do the thread a favor and read Bill Kristol:

    No wait. I’ll just cite the whole thing.

    Paul Singer’s op-ed in the Journal is a must read.

    Here’s an excerpt:

    In the past decade, most global financial institutions built highly leveraged balance sheets — sometimes as high as 30 to 1 — that were stuffed with risky assets. These institutions also bought on a large scale for their own accounts the same securities they sold to their customers. Our anachronistic regulatory framework didn’t catch the problems, and warped incentives and compensation schemes fueled the risk-control failures that eventually brought on the crisis we face today.

    Singer is one of several conservatives I’ve spent time with recently who’s thinking through the implications of the financial crash, and trying to figure out–not to put it too grandiloquently–the way forward for democratic capitalism. Many of those with the most practical and creative ideas, I’ve found, are practitioners, with experience on the Street (and in some cases in government); some are business school professors. They’re at once free-market-friendly and free-society-committed, while understanding that we need to devise and implement a reasonable structure of law and regulations that will prevent system-threatening leverage, opacity, and irresponsibility. Singer and others can point us to a path very different from Obama-like nanny-state liberalism, but also different from head-in-the-sand-everything-was-fine-except-for-the-Community-Reinvestment-Act conservatism.

    Emphasis mine.

    I don’t disagree with what Simon Johnston says in that, and neither does Bill Kristol. I think I’ve learned that the light bulb behind the guy’s head actually does work. He must have lost a lot of money, and it seems like he’d like to avoid losing so much next time around. Me too.

    In a real crisis – and this is one – sometimes people you’d never expect decide that too much is at stake to be hacks. It’s a pleasant surprise. All Patterico and his comment board can do, meanwhile, is stand around and rant. When it comes to solutions – ways to avoid having the country shed another 15% in employment and $2 trillion in annual GDP, you’ve got… nothing except instincts telling you that every potentially useful solution is in fact an evil socialist conspiracy.

    Oh, and regarding your main point, Karl? 100 years ago, there was rat sh*t in our food and now there’s less, by a factor of 100. I hate big business system gaming, but the regulations got the rat sh*t out of our food. The results mattered. The rest is, in this case and at this point, trivia. So the sermon about how all regulations are the tools of Big Business to do evil fails in the face that evil did not actually occur. Just an absence of rat poop.

    glasnost (4ed100)

  30. “In a real crisis – and this is one – sometimes people you’d never expect decide that too much is at stake to be hacks. It’s a pleasant surprise. All Patterico and his comment board can do, meanwhile, is stand around and rant.”

    dlasnost – Absolute, tpotal bullshit once again, but thanks for playing. Where were you in the middle of the Bush Administration when conservatives were lobbying for GSE reform because they had gotten too big, exceeded their charter provisions, had become competitors of their customers, and exposed the financial system to unacceptable systemic risk. Those cries for regulayion were blocked by dumbfuck democrats like Frank and Dodd, the massive GSE lobbying effort, as well as the efforts of community organizig groups like ACORN.

    glasnost your Hindsight Hero history rewrite may sound good to an audience of one, but it doesn’t pass muster with anybody who knows what they are talking about.

    Good day sir.

    I said good day.

    P.S. – Perhaps you and Scott Horton need to find a new conspiracy to flog.

    daleyrocks (5d22c0)

  31. glasnost – Am I corredt that you are just dormitory socialist who knows nothing about the world outside of academia except what he reads?

    daleyrocks (5d22c0)

  32. glasnost, besides your obsessive compulsive behavior on this topic, misrepresentation of others’ arguments seems your main talent. I’ve never said “there was *no* deregulation between 1998 and 2008″. And I’ve never said that “everything-was-fine-except-for-the-Community-Reinvestment-Act”.

    Both of your comments are nothing but dishonest strawmen.

    SPQR (26be8b)

  33. and I’ve never said that “everything-was-fine-except-for-the-Community-Reinvestment-Act”.

    Well. Then I apologize. That’s sort of the impression I came to have regarding your views, and the general view, on the topic. I don’t read the threads hear religiously, but I don’t know that I’ve ever heard anyone bring up bad financial-crisis actions done by the financial sector around here.

    It does make me curious, if you intended to suggest that you do recognize that the financial sector behaved in a manner that, broadly, isn’t good for the country – which you didn’t explicitly say, but seems like a reasonable implication – it makes me curious exactly what you’d like to see done about it.

    I’m guessing your considered options are
    a) nothing and
    b) a federal spending freeze
    but perhaps there’s a c).

    glasnost (4ed100)

  34. I propose we go back to Constitutional government spending, as Davey Crockett spoke about.

    John Hitchcock (fb941d)

  35. glasnost,

    Regulations per se were in fact not the point of my post, so you might want to reread it.

    And read my comment upthread about the difference between regulating meat and regulating derivatives.

    But what you really might want to read are the FDA regs that allow certain levels of rat droppings in your food. Just don’t do it right before mealtime.

    Karl (3bf5f8)

  36. There is someone waging outright genocide on strawpeople.

    JD (7642d2)

  37. “Regulations per se were in fact not the point of my post, so you might want to reread it.”

    Karl – glasnost has no interest in commenting on what people are actually saying here. It is much more interesting for him to comment on what he imagines people are saying.

    daleyrocks (5d22c0)

  38. The charicatures in its head cannot argue back, daley.

    JD (7642d2)

  39. Additional financial regulations, not deregulation, contributed the financial meltdown. Just recently, public companies were required to make a wild ass guess and record their stock option “expense.” Second, mark-to-market accounting (which was loosen just last week), forced companies to expense any decline in value of a long term asset. While these assets might rise in value in the future, quarter-to-quarter declines had to currently reported, often as huge “losses.”

    The two regulations above lower reported earnings which lowered stock values which helped tank the market.

    Perfect Sense (0922fa)

  40. I am getting the hang of glasnost’s posts. Skip over them as though they were by Hax. That works just fine.

    Mike K (2cf494)

  41. Maybe he is a journalist, too, Dr. K.

    Eric Blair (4d78ef)

  42. “Second, mark-to-market accounting (which was loosen just last week), forced companies to expense any decline in value of a long term asset.”

    Perfect Sense – Not quite as simple as that, but it went further than the original accounting pronouncement on the subject which didn’t necessarily require a hit to earnings. The hit of course reduces equity, causing a problem with capital for companies. Of course, only the asset side of balance sheet was getting adjusted, magnifying the problem in my opinion. If companies were marking assets to market, why not also liabilities?

    daleyrocks (5d22c0)

  43. Hey Mike, is that you over there at Britain’s conservativehome site? Sure sounds like the Mike K I’ve known.

    Gary McVey (74e56d)

  44. #41 Fair enough. But without a discussion in accounting theory, to me a reduction in equity is a current expense. If the assets are declining, then the either the liabilites or equity must decline in order for the balance sheet to balance. Most accountants don’t record the asset decline on the income statement, but I believe they should rather than hide the decline in the equity accounts.

    Perfect Sense (0922fa)

  45. Perfect Sense – My point is that if the company’s assets are declining in value, in all probability it’s liabilities have as well and adjusting them to market would offset the hits taken on the asset side. Adjusting only one side of the balance sheet is a distortion. I was merely pointing it out, not trying to start an argument. To me it’s a problem with the overall approach. Don’t piecemeal the fair value of accounts it just leads to distortions.

    daleyrocks (5d22c0)

  46. I don’t read the threads hear religiously

    We have a winnah for understatement of the year – so far.

    Dmac (49b16c)

  47. Man, I can really see how this argument goes. This explains a lot about comments here and convinces me even more that a lot of people are talking past each other and using the same words (like conservative) but are thinking completely different thing when they use those words.

    The argument is good but I dunno, I think I still agree with glasnost that I prefer eating less (disgusting idea but too true) rat poo in my food (actually, if you don’t eat it out of a box or bag you can wash as much poo of any kind off as you wish).

    EdWood (c2268a)

  48. EdWood – Is anyone here suggesting that eating rat poo is a good thing?

    JD (28c647)

  49. I’d love to watch EdWood washing the rat poo off his cornflakes before pouring them into a bowl.

    John Hitchcock (fb941d)

  50. no jd but Karl correctly pointed out that if you eat processed food you eat rat poo. None would be the best amount but that doesn’t happen. This is the wierd thing about regulations. If you make a law saying you can have 0 rat poo in food then either you end up like Europe, with lots of inspections of facilities to make sure that there is no poo (nothin wrong with that from where I’m standing but the food costs more) or you get lots of people lying through their teeth about rat poo, or you acknowledge that really big food processors are going to have rat poo in their food and set some sort of industry standard.

    Oh-or you could have the free market where there is no real way to tell if there is rat poo in your food coz its usually dried and powdered (it comes with the grains used to make cornflakes as JH notes above). Coz you can’t decide not to eat rat poo if you don’t know it’s there the result is that you eat a lot of poo. Wait does the difficulty in determine if there is rat poo in your food mean that there it NOT a true free market in processed foods? Maybe if some neutral party hired some inspectors…. that could not be bribed somehow.

    EdWood (c2268a)

  51. I think Barcky needs a rat poo czar and needs to fire the CEO’s and Boards of all of the major food companies.

    JD (0d131e)

  52. Simple solution for you, Ed – never eat any processed food for the rest of your life. Grow it all in your backyard, including the cows for your milk in the morning.

    Dmac (49b16c)

  53. Grow it all in your backyard,

    And fertilize it with rat poo.

    I remember a SPAM haiku contest from years ago:
    Did you ever think:
    “Where do rats go when they die?”
    SPAM knows where they go.

    I don’t want rat poo.
    Not to eat or smell or touch.
    No corn flakes for me!

    carlitos (ff752f)

  54. Actually, milk straight from a cow is a hazardous substance, according to the unelected feds who make the laws.

    John Hitchcock (fb941d)

  55. It does make me curious, if you intended to suggest that you do recognize that the financial sector behaved in a manner that, broadly, isn’t good for the country – which you didn’t explicitly say, but seems like a reasonable implication – it makes me curious exactly what you’d like to see done about it.

    I’m guessing your considered options are
    a) nothing and
    b) a federal spending freeze
    but perhaps there’s a c).

    Believe it or not, the fact the financial sector behaved in an imperfect way can’t be undone. Not even by spending trillions of dollars we don’t have!! Maybe you mean how to prevent it from happening again? But spending trillions doesn’t seem to have anything to do with that either!! Or do you mean something else. Who knows…

    Probably the single most effective way of preventing it from happening again is stopping the practice of Fannie/Freddy from purchasing high risk mortgages and reselling them into the system, where the whole mess actually started. Derivatives and leverage were a step or two down the line.

    Gerald A (6851fd)

  56. #51
    Yeah, back behind my compound!!!

    No, I’m afraid it’s a big sh*t sandwich and we all gotta take a bite if we want to eat a sandwich. As long as its not gritty, and producers keep salmonella and aflatoxins down to a bare minimum (there’s a good example of how great regulation with slow enforcement doesn’t work) I’ll do my best to conveniently forget about all the other nice things in my wonder bread.

    EdWood (2bea43)

  57. […] * Patterico reminds us about regulatory history. […]

    The International House of Bacon » Blog Archive » Overdue Link Dump (72fa57)


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