Category Archives: Business

Updated: A Political Takeover Of The Entire Financial Sector? (CHINA)

Barack Obama, Business, China, Debt, Economy, Government, Uncategorized

Writes Robert Bidinotto on Breitbart’s “Big Government” (the proprietor that was infinitely more forgiving about Bush’s big government):

As long as the Democrats continue to control Congress, we’ll have to endure an endless procession of initiatives for the federal government to take over industry after industry. Health insurance and college loans went under federal hegemony with passage of a single bill, known as “ObamaCare.”

Now, a new bill, referred to by the name of its chief sponsor, the ethically challenged Sen. Chris Dodd of Connecticut, aims to consolidate a federal takeover of the nation’s entire network of financial institutions.

As Peter Wallison of the American Enterprise Institute notes:

Does the bill, as [Republican Senate leader Mitch] McConnell said, “institutionalize too big to fail?” Of course. There can’t be any reasonable doubt about this. The bill authorizes the Fed to regulate all non-bank financial institutions that are “systemically important” or might cause instability in the U.S. financial system if they failed. . . .

The market will see immediately that the government has created Fannie Maes and Freddie Macs in every sector of the financial system where these large companies are designated for Fed regulation, including insurance companies, hedge funds, finance companies, bank holding companies, securities firms, and any other kind of financial institution the government wants to regulate. Since these firms will be too big to fail, they will be seen in the market—as Fannie and Freddie were seen—as ultimately backed by the government and thus safer firms to lend to than small firms that are not government backed. This will permanently distort the financial market, favoring large companies over small ones, and eventually force a consolidation of each market where these firms exist into a few large competitors operating under the benign supervision of the government.

In other words, this is another huge step toward fascistic corporatism, completing a de facto government takeover of today’s nominally “private” financial firms. These corporations would be reduced to the status of politically managed public utilities.

Professor Brad Smith of Capital University Law School stressed that latter point to me:

It’s important to note that this is not just about more bailouts, but it will be bailouts for the politically connected and favored. If the President and Congress think you are a “savvy businessman” (which means you support his party) you’ll be in the pink. But if you are a “corrupt Wall Street Titan” (meaning you don’t support his party) well .

Absolutely true. This is not only a federal takeover, but more specifically a political takeover of major financial corporations. Smith adds: “Republicans can rally public opposition if they get this message out there consistently.”

Ah, but therein lies the rub. The Dodd bill faces a cliffhanger vote in the Senate, perhaps as early as next week. And whether it passes in its current form may come down to the vote of a single Republican “centrist,” Susan Collins of Maine, who could thwart a successful GOP filibuster.

The repercussions of this legislation are as significant as ObamaCare. But even some Democrats are wavering on it. It can still be defeated.

I urge you to contact your two U.S. senators today. (And while you’re at it, make sure to send a copy of your message to Sen. Susan Collins of Maine.) Tell them to oppose the pending financial reform legislation, the so-called “Dodd bill.” Tell them it represents “crony capitalism” at its worst, putting taxpayers on the hook for guaranteed bailouts of any and all financial institutions deemed “too big to fail.”

Tell them that this will give unfair market advantages to big, politically connected corporations over smaller, politically unfavored competitors. And that, in turn, will completely distort the financial-services marketplace, creating the false impression that large, government-backed institutions—like AIG, Fannie Mae, and Freddie Mac—are inherently safer for investors and lenders than their smaller rivals. That can only encourage the consolidation of the financial-services sectors into a few gigantic monopolistic institutions, adding to the “moral hazard” problem of rewarding irresponsible businesses at the expense of their responsible competitors.

And you might want to add that we, the voters, will have the last word if power-craving members of Congress continue to imagine that they are “too big to fail” in November.

[SNIP]

Follow the links in Robert’s blog post HERE.

Update (April 19): Glenn Beck’s next milestone will be to quit the ranks of American Sinophobes, who “are fond of saying that the strength of the Chinese economy is derived from that government’s exploitation of its people.”

From “US In The Red And Getting Redder”:

The Chinese are ditching Mao for Milton, as Americans trust Oprah to pick their literature and leaders. Indeed China is changing. It is “out of the red” in more ways than one. The US is changing too: It’s in the red and getting redder. …
China has undergone considerable economic restructuring and market reforms, the consequence of which is a 300 million strong Chinese middle class. Poverty levels have receded from “53 percent in 1981 to 8 percent in 2001. Only about a third of the economy is now directly state-controlled. [Like the US] As of 2005, 70 percent of China’s GDP was in the private sector.” The Chinese financial system is duly being liberalized—banking is diversifying and stock markets are developing. Protections for private property rights are being strengthened as well.

Update IV: Mining Men

Business, Gender, Labor, Law, Regulation

The Upper Big Branch South Mine near Montcoal, W.Va., is where “a methane explosion killed 25 miners and left four more missing and thought dead. The mine, operated by a subsidiary of Massey Energy Co., had been cited for several violations relating to proper ventilation.” This is “the worst mining disaster in over 20 years,” reports the Hill.

A suspect source, the United Mine Workers, “said that the mine had been the subject of 450 safety violations and that the company has paid over $1 million in fines last year.”

Regulation generally works to the detriment of those it is intended to help, since a less-than-honorable company will find the fine cheaper than the fixes needed to bring the mine up to par.

Update I (April 6): Coal-mining accidents always remind me—but not other media member, it seems—that men do society’s most dangerous jobs. Poor men, especially, go underground to make a living; have done so for generations.
Richard Llewellyn’s 1939 classic How Green Was My Valley (your children should have read it) depicts this reality in an achingly beautiful way. The book haunted me for years after I had read it, as a kid. “Margaret’s Museum” achieves a good deal on celluloid.

Update II: The following is from an 1935 article, “The World’s Most Dangerous Jobs.” Since then working conditions have improved for men because of advancement is technology, among other reasons. I also believe that workers in the fishing, timber and electrical power-line fields have overtaken miners as far as death on the job goes:

“‘COME quick! There’s a man hurt!’ Almost ten times every minute, more than 4,000 times each working day, that cry resounds somewhere among America’s great mass of industrial workers.”

“Once every ten minutes that cry means death for another working man. In 1933 it sounded the death knell of 46 men a day. These dying, injured, and maimed men were following ordinary jobs in most cases. They were not stunting aviators, daredevil race drivers, or human flies. Who then has the most dangerous job?”

With an accident frequency rate of 65.28 per million man-hours of exposure, say the Safety Council figures, the coal miner works at the world’s most dangerous job.
There are approximately a million miners in this country. While these men are working just one hour of one working day, more than 65 of them will be injured at their work.
The miner then has the world’s most dangerous job.
Second to mining, is lumbering. This occupation has an accident frequency rate of 59.67 per million man-hours of work. Third in the list of most dangerous occupations is the construction industry with a rate of 55.66.
And what is the safest job? At the top of the list of some thirty industries, accounted for in the figures of the National Safety Council, stands tobacco processing with a frequency rate of only 1.43, the safest occupation in this country!
For many years coal mining has led all other employments in the annual number of fatal and permanent injuries suffered in accidents.

Update III: “Mining Safety Reexamined After Another Deadly Disaster in W.Va.”

Update IV (April 7): What I know about rescue protocol in mining accidents is dangerous, but not nearly as hazardous as the slow speed with which the rescue at the Upper Big Branch Mine is proceeding.

They’ve drilled one hole “to release enough methane gas so searchers can enter the mine.”

How many more holes must they bore before they’ll allow searches to brave the Pit?

Presently they appear to be endlessly testing air samples. Can you imagine the time lost sending samples to the feds? Even if they do it on location, which is what I presume is happening, from the vantage point of the relatives this rescue must looks like a Ninny-State operation.

Maybe the authorities involved have decided it is no longer a rescue, but a recovery operation. How I hope this is not the case.

Poor, poor people. But for the grace…

Update II: Toyota Triumphs

Business, Free Markets, Government, Propaganda, Regulation, Technology

THE MARKET HAS SPOKEN. Try as it may, the fascist state seems unable to mar a reputation earned honestly in the service of the only true democracy: the free market. The US government put Toyota through a shameful congressional inquisition. LaHood, of the Transportation Department hood, followed up with “the maximum penalty, more than $16 million, against Toyota for [ostensibly] failing to promptly notify the government about [so-called] defective gas pedals among its vehicles.”

Yet, “The world’s biggest carmaker saw US sales rise 41% in March from a year earlier. …”

Update I (April 6): Odd that despite repeated disappointments with the American vehicle, you guys keep buying the things. I’d buy an America car if I wanted what my father-in-law calls farm equipment. (He assembles classic Motorcycles—Triumphs, etc.—as a hobby.)

Update II: “Ford is reaping the benefits that go with being the only U.S. automaker not to take a bailout.” If by supporting American one is propping up big labor unions, inferior production and products, and corporate cronyism—count me out.

Updated: Regulator ‘Claims Credit For Nascent Economic Recovery’

Barack Obama, Business, Democrats, Economy, Government, Regulation, The State

Obama can boast of job growth for the month of March—162,000— because, from his standpoint, an accretion of the parasitical sector (government) is as good, if not better, than that of the private, productive economy. Laissez faire capitalists understand that the “U.S. Census Bureau’s addition of 48,000 jobs for its once-in-a-decade head count of the U.S. population” will hit the private sector hard. Barack doesn’t.

Note that none of the modest job gains in other industries, respectively, rivals the gains of one government department, the Census Bureau. And sixteen thousand other IRS thugs will be hired to enforce the healthscare bill.

That rising tide of hiring brought relief to some long-suffering sectors of the economy. Construction added 15,000 jobs, the first increase of any kind in the sector since June 2007. Manufacturing also added 17,000, with 2,500 of that gain coming at auto plants and their parts suppliers.
Retailers added nearly 15,000 jobs and leisure and hospitality accounted for 22,000 more jobs.

What interests me about Obama’s blather is not so much that he has declared that the “country has successfully ‘turned the corner,'” but that in response to criticism of his interventionist policies, he “insists the country cannot return to the more conservative hands-off regulatory philosophy traditionally favored by the GOP.”

The US economy is regulated to the hilt; legislators of both parties have placed it in knots of bondage.

Take banking. “For all the talk about deregulation run amok, banking is one of the more heavily regulated sectors in most Western economies. In the US, for instance, banks have numerous regulators, ranging from the federal Reserve System to the Federal Deposit Insurance Funds to a variety of minor offices and state regulators, all acting in concert. Not only did these regulators fail but they egged on the excesses which later exploded. The more consolidated regulatory approach of the UK didn’t seem to fare much better. We’re counting on the regulators to fix the markets but there is very little talk about how to fix [or rather fire] the regulators. [Tyler Cowen, Times Literary Supplement, February 26, 2010]

Peter Schiff sees a bubble in government brewing. In “The Fed’s Last Hurrah,” he writes:

“While the earlier booms at least provided the illusion of prosperity and some fun while they lasted, the government bubble will cripple the economy and deliver widespread misery to the vast majority of Americans.

Of course, there will be winners in the government bubble, at least for a while. As was the case with the stock and real estate bubbles, plenty of money will be made by the well-connected and parasitic classes. Government employees will continue to enjoy pay raises at our expense, as will anyone benefiting from the new wave of subsidies, such as Wall Street investment bankers, financial speculators, and those working in health care or education.

These gains will come at the expense of the taxpayers who foot the bill and the consumers who face higher prices. As government grows, it deprives the private sector of the resources it needs to survive and grow. The result is a lower overall standard of living. Not only are government jobs less productive than private sector jobs, but bureaucratic interference actually makes the remaining private sector jobs less efficient as well.”

Update (April 5): FRED REED RIPS apart the US Managerial State. No one on this site buys the line you hear from Mr. Hannity, and other iconic conservatives, that the US BB (before Barack) was a free country:

“Washington is out of control. It does as it likes, without restraint. It spends American money and American lives to fight remote wars for which it cannot provide a plausible reason. It determines what our children will be taught, who we can hire and fire, to whom we can sell our houses, whether we can defend ourselves, even what names we can call each other. The feds read our email and track the web sites we visit, make us hop around barefoot in airports at the command of surly unaccountable rentacops. They search us at random in train stations without even a pretense of probable cause. We have no influence over them, no way of resisting.

… Washington has learned to insulate itself from interference by the population. Huge impenetrable bureaucracies beyond public control make regulations that amount to laws, spending God knows how much money to do God knows what for the benefit of the interest groups that run the government. These bureaucrats cannot be fired and usually cannot be named. Congress, like the bureaucracies, serves not the United States but the big lobbies.” …