Ruins of the Self-Esteem Society

Kevin Hassett nails the Wall Street whiz kids. He draws a bead on the toxic mixture of Ivy League education and cocksure self-esteem that reduced Wall Street to a discredited, ruined wreck.

Twenty or 30 years ago, it was common for the best and the brightest to be doctors or engineers. By the 2000s, they wanted to be investment bankers.

When Wall Street was run by people randomly selected from the population, it was able to survive everything. After the best and brightest took over, it died the first time real-estate prices dropped 20 percent.

Wall Street is gone because its firms did a terrible job assessing the risks of the positions they took. The models these firms used to evaluate risks failed.

Back when Wall Street was run by individuals without fancy degrees, they had a proper skepticism toward fancy models and managed their risks with a great deal more humility and caution. Only when failed models became canon did catastrophe strike.

Computer models and fancy degrees are great, but they can't replace humility and judgment based on experience. Read the whole article here.

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_hassett&sid=a_ac69DqFutQ

President Obama Scolds Wall Street Over "Shameful" Bonuses
Senator Dodd: Pay the Money Back!

Wall Street is learning the truth of an old Ronald Reagan quote:

Get in bed with the government and you'll get more than a good night's sleep.

Being scolded by the government about shameful behavior and wasteful spending is like receiving a lecture on morals from a crack whore.

When Socialist Experiments Explode

In the James Dean movie "Rebel Without a Cause," reckless hoodlums steal cars and play chicken, racing them to the edge of a cliff. Whoever jumps out of the car first is the chicken. Sounds like Congress and the Wall Street bailout program.

House GOP members are trying to stick to their free-market principles and stay in the car, but the economy could end up going over a cliff. They're going to have to jump, and the Democrats will call them chicken when they do.

Democrats are keeping the pressure on because they don't want the truth to come out:

Democrats are the saviors of Wall Street fat cats and Republicans are looking out for the taxpayer.

Socialistic government intervention in private markets created this mess. This second truth explains the first truth. Jimmy Carter started a socialist experiment to allow more people to buy their own homes. Guilty do-gooder liberals in Congress loved the idea and forced lenders to relax their standard so more people could get loans. That is the "deregulation" that created all this bad debt that the President tells us is clogging the finance markets, bringing capital flows to a standstill.

Capitalism is apolitical and amoral. Government schemes of this magnitude need private sector cooperation, and Wall Street was happy to help. They funded Hitler, why not this? Wall Street would finance Satan's global takeover if they could make a profit. Fannie and Freddie greased the skids with political cash to its benefactors in Congress. Barney Frankenstein and Chris DodderingOldFool are swimming in political contributions from the same banksters they are now bailing out. See how this works?

This bailout maintains the status quo. Washington can continue to play Santa Claus with your money, and Wall Street can continue to profit from it.

Kevin Hassett at Bloomberg.com makes the best case I've seen for blaming the Democrats. See Jeff Jacoby's explanation of Barney Frank's guilt.

Axis of Weasels: Washington & Wall Street

What ever happened to responsibility and accountability? Or even good old fashioned shame, for that matter?

Thousands died in a terrorist attack on our country and nobody got fired. Now hundreds of billions of dollars have been flushed down, and nobody gets fired. Instead, we call together the greedy pigs and candyman congressmen who caused it to formulate a plan that will reload Wall Street's vaults with my money.

And the Wall Street welfare queens and bleeding heart politicians who screwed us express no remorse whatsoever. OJ Simpson at least vowed to find the killers...

Anyway, what kind of a financial crisis is this when not even one banker has thrown himself out of a 20 story window? It should be raining remorseful, failed Wall Street Wizards right now.

I listened to the President's speech, and there was one thing missing. Here's what he should have said at the end:

"Now, to help pay for this, as well as to thin the investment banker herd, I'm announcing the federal government will be selling game tags for $1,000 a piece. That's right, for a thousand bucks you can take dead aim on the rich. Now I know some of you boys down in Alabama don't have that kind of money, so we're allowing team hunting. You can pool your money...

OK, so that's going overboard... But I'm mad and I want accountability!

I want to see investment banker heads on pike poles like in the movie Braveheart. I want mountains of Wall Street Wanker skulls piled up like in the days of Tamerlane and Samarkand. I want to see these pseudo-capitalists running down the street chased by angry mobs bearing torches and pitchforks. I want blood...

Limiting executive pay is not enough, not by a long shot dammit! These arrogant bastards need to put some skin in the game: Sell that vacation home, the extra cars, melt down the silver, hock the jewelry... I want to see these greedy weasels squirm. On top of that, the government should only hand over half of what they need. If they're so damned smart they can figure out the rest on their own.

Of course, none of that will happen. We demand nothing of our leaders, so we receive nothing. Harry and the Pelosicrats are planning to cut you another $600 check, though. That should shut us up for awhile, and the World Series is coming up...

Wall Street: A Democratic Joint

Follow the Money: If you think Wall Street gives overwhelmingly to the GOP you're wrong. Democrats have been raking in investment banker money almost 2-1 compared to Republicans. Merrill Lynch was the only big firm whose employees gave more to Republicans than Democrats. Michael Franc provides an excellent summary over at National Review.

Blame Liberalism: Democrats caused our current financial calamity. I know, the liberal press echoes the liberal politicians who bawl that it's the fault of those mean, deregulating Republicans. Noel Sheppard at Newsbusters gives us the real reason why: Jimmy Carter and a Democratic congress passed laws that forced lending institutions to loan money to people who couldn't pay it back. These stupid policies were egged on by the Clinton and current Bush Administrations.

It's Not Bush's Fault. It's Barny Frank's Fault. In President Bush's defense, he tried to overhaul Fannie Mae and Freddie Mac back in 2003, but was rebuffed by Democrats (and some Republicans) in congress. Here's the money quote from Barney Frank:

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

John McCain Saw This Coming And Tried To Stop It. He cosponsored legislation (blocked by Democrats) that would have reformed reformed Freddie and Fannie. Here's a McCain quote from 2005:

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, ... If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

Capitalism didn't cause this crisis; government intervention in private markets did. Kevin Hassett at Bloomberg.com has written what I think is the best summary on why this is the Democrats' fault.

Bipartisan Sleaze. Wall Street became a giant hog wallow where Democrat and Republican, politician and banker, rooted cheek by jowl in piles of government and private sector money. Even President Bush's overhaul proposal wasn't to sell off Fannie and Freddie, but to create another bureaucracy to oversee the current bureaucracies.

Bipartisan Corruption. Liberals and conservatives must understand this. Our political system is corrupt. And it's a bipartisan corruption: Democrats ran Fannie and Freddie and Republicans lobbied for them while both parties lapped up bribes disguised as political contributions. The only way we can keep sleazy politicians from doing stupid things with our money is to take the money away. Government has no business in business, and business has no business in government. Take away the Federal safety nets for gamblers, and sanity will return to the markets.

We Must Stop Them Before They Breed Again! The regulatory firewall that is needed is between Wall Street and Washington, before their amorous cavortings spawn another monster.