Ernest Hemingway said once that to live and thrive in the world, one needs a "finely honed crap detector." When this was said years ago, if may have seemed overly blunt, but certainly on target. Today this device is an absolute necessity, especially when listening to Barack H. Obama. His recent attack speech on Wall Street may have been useful in a short term political sense, but it further illustrates why this president has a large and growing credibility gap.
By implying all Wall Street until now has been "bilking" America is a lie to say the least. Obviously, people lose money in markets. Obviously, people lie and commit fraud in this and other markets. When the SEC isn't ogling porn, they catch them and send them to jail. If Obama doesn't like the fact we have fraud in some markets, perhaps we should just abolish markets and have [drum roll please] communism. Perhaps I should take this back since he's already to taken this suggestion far too seriously.
Obviously, a man like Obama with such a limited understanding of capital markets really only embraces Will Rogers investing: "Only buy stocks that go up." To ideologue Obama, losing money is fraud, somebody betting against you dishonest, and people making more money you is not "fair." Funny, didn't JFK, the last decent Democratic president have something to say on this point? His quote was: "life is not fair." People lie and commit fraud all the time with little or no consequence. Ball players like Alex Rodriguez, David Ortiz, Miguel Tejada etc. lied and committed fraud and never went to jail or forfeited one dime. And they continue to ply their trade (though with Ortiz, who knows how much longer). Back to politics, Barack Obama said he wouldn't take private money for his campaign, but then he did. And lo and behold, the fraud was elected president. Barack Obama raised cigarette taxes which raised taxes on those making less than $150,000 a year. Yes, politicians break promises all the time, but Obama has lied about breaking this promise ever since. One standard seems to apply to Democrats and another to everyone else.
Take this financial reform for instance. It doesn't even mention Fannie Mae and Freddie Mac which provided most of the sub-prime loans that those "evil" Wall Street firms then repackaged, sold or shorted. In other words, the gasoline that caused our financial house to burn down is still lying around waiting to catch fire again. And this is touted as "real reform?" As we'll see later Obama and the Democrats have good reason for exempting Fannie and Freddie. But now, what about the banks themselves?
Are these banks still too big to fail? According to the bill, the government will simply step in and bail them out again. Doesn't this sound reminiscent of the mess we just got out of? The obvious threat of large institutions flopping and the taxpayer picking up the tab is still very much alive. This bill doesn't address that point at all. In fact, by creating a $50 billion dollar bailout fund, some might be further encouraged to make risky investments and again have the government clean up the mess. Also, chew on this: the first bailout of AIG was over $80 billion. That was just the initial bailout. So this bailout fund will be like fighting a house fire with a garden hose -next to useless. Right now, the government is already on the hook for Freddie Mac and Fannie Mae to the tune of over $400 Billion. Sad to say, but in bailout terms $50 billion is chump change.
Speaking of Freddie and Fannie, it is interesting that Rahm Emanuel, Obama's chief of staff was on the board of Freddie Mac. Should he give back his his $320,000 in salary and his $100,000 from sale of stock for helping run Freddie into the ground? Of course not! That would identify him as one of those dreaded Wall Street fat cats that the President is always decrying. No one wants Rahm to get in any trouble. After all, he wants to be the mayor of Chicago and we all know how spotless the reputation of that office is. Rahm also snatched $51,000 from Fannie and Freddie serving in Congress, after his stint with Freddie. My favorite taker of the cash from Fannie and Freddie has to be Democratic representative Paul Kanjorski of Pennsylvania. Kanjorski, a regular on CNBC, is chairman of the subcommittee overseeing Fannie and Freddie. He grabbed $65,000 in campaign cash from Fannie and Freddie. That sure is some oversight! Please ignore that politician with "his pants down and money sticking in his hole" as Lou Reed used to sing. Sure Obama could get off his lazy duff, walk down the hall at the White House and collar his very own fat cat, but he really doesn't have to go even that far. Who was the third largest collector of campaign cash from Fannie Mae and Freddie Mac all time? That's right: Barack H. Obama.
Let's dig on this more. The other campaign cash hogs were Chris Dodd and John Kerry. Dodd was elected to the Senate in 1980. Kerry was elected in 1984. Both of these tainted money boys have been in Washington for 28 and 24 years respectively. So they had been on the Fannie and Freddie money train for awhile. Dodd collects $133,900 and Kerry grabs $111,000. Dodd, by the way, is the principal author of this financial "reform" bill. Certainly, no reason for him to leave Fannie and Freddie unmentioned.
So here comes Barack Obama elected in 2004. He serves less than 4 years and heists $105,000! He certainly bilked Freddie and Fannie fast. Forget returning the Goldman campaign contributions for Goldman is still solvent. Will Obama give back the campaign cash from Freddie and Fannie? That money could go right back into the U.S. Treasury now that Fannie and Freddie are broke, Call it sharing the wealth, paying back the tax payer dime or just doing the right thing. If Obama really wants find one of the fat cats responsible for this financial mess, all he has to do is look in the mirror.