Wake up, Republicans!
It’s understandable that there’s a tough, high stakes race for the Presidential nomination right now. But to both the candidates and bloggers, I suggest that you simply press Cain to get the facts out, and spend most of your time focusing on the really big issues/opportunities in front of you now.
First of all, this internecine warfare is going to harm whoever is the candidate next year.
But more important, some really significant events have occurred and there’s been no outcry.
This week we learned that MF Global confessed to comingling an as-yet indeterminate amount of client funds (but most likely north of $600 million) with its own. Then, poof, MF went bankrupt and all of its money, along with the $600 million+ of money that wasn’t even theirs, went with it! Now, do you really think that it was an accident that they tapped into customer accounts? Well, for perspective, the net worth of MF was only $1.5 billion at the time. So $600 million was what you’d call a more than material amount. No they weren’t stupid, they were criminals. This is just like somebody taking YOUR money and investing it so that if they win, you get nothing and if they lose, you lose too. You had no idea that your brokerage firm could steal your money like that with impunity, did you? If you wonder why many people are sympathetic with OWS, it’s because a guy who robs $100 from a 7-11 goes to jail for it, while John Corzine steals $600 million and- as far as I can tell- it isn’t even illegal. WHERE IS THE OUTRAGE?
A second point- wasn’t Dodd-Frank supposed to prevent this kind of meltdown? Do you mean that in their 2,000 page bill (and in the grand history of American financial regulation) nobody thought to make it a crime to comingle funds!????
A third point- the CEO of MF was John Corzine, does the name ring a bell?
So WHY are Republicans not focused like a laser on this issue? Guys, there’s a very high likelihood of a major financial system meltdown before the 2012 elections. This is the one and only key issue for next year. Do you want to cede the issue to the Democrat’s mantra of “This is the fault of capitalism; this is the fault of Republican deregulation; this is another example of the 1% fleecing us all.”?? The Democrats are really good at taking a theme, true or not, and pounding it into peoples’ heads until it becomes conventional wisdom. For instance, the whole “Bush lied” nonsense. I was around before the Iraq invasion and read newspapers, it was the conventional wisdom under both Bush and Clinton that Iraq had an WMD program. Bush didn’t lie, it’s just that apparently the CIA was incompetent. But the Democrats pounded and pounded on a lie until it became the truth.
Well, the next lie is “Capitalism has failed.” Are you going to let this become the conventional wisdom, and roll over for socialism or worse? Or are you going to point out that it is the failure to enforce existing laws or to pass truly sensible legislation to address financial regulatory problems rather than the monstrosity the Democrat Congress passed? Are you going to put the blame squarely on Obama, and inquire about his relationship with Corzine? Where’s the investigation of Corzine? Where’s the investigation about why this sort of action is not criminal? Where’s the hearings about the abject failure of Dodd-Frank? Why aren’t you blaming these problems on the DEMOCRATS? Instead, you’re obsessing over Herman Cain.
Republicans, do you not think that Joe Six-Pack can “get” this issue? Let’s see… well-connected Democrat steals $600 million of client money and nothing happens… No, that’s too complex. Let’s just obsess over Herman Cain.
This isn’t the only absolutely horrible financial misdeed in this last month. It’s been reasonably well-documented that Bank of America just transferred $53 TRILLION of derivatives contracts over to its bank holding company, so that CUSTOMER DEPOSITS WILL SECURE THOSE DERIVATIVES. And you know what- it’s legal! Why didn’t Dodd-Frank prevent this sort of problem? Warren Buffet once famously called financial derivatives “financial weapons of mass destruction”. So why do derivatives contracts always have first priority in the event of a bankruptcy?
But just for the record- BOA did in fact dump $53 trillion of derivatives onto taxpayers. The Federal Reserve allowed it. And Republicans did… nothing.
My advice to all the Republican candidates is first, to take the high road about Herman Cain and America in general, as Eric Ericsson has suggested many times. Our problems can be solved! Second, put yourselves on the right side of the financial issues. Convince people that you understand finance, and that you’ll be able to get us out of the financial mess that is only getting worse.
Obama has staked his campaign on impugning the “1%”. And now we see that one of his best buddies and major contributors is ready to skate after defrauding his customers of $600 million. We see that Obama says nothing when BOA slops $53 trillion of derivatives onto taxpayers’ heads. Obama, I guess, can’t say anything because he’s part of the problem. So- how about Republicans? Is this an opportunity for you, or are you part of the problem, too?