Category Archives: Commentary

Commentary

Those who complain about corporate greed may be greedy themselves

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From the moderately leftist National Post.

Excerpt:

But what about that 99%? What responsibility do they bear for the situation the world finds itself in? The answer is: plenty. Greed doesn’t just live on Wall Street: it finds a home on Main Street too. And when people think it’s perfectly OK to take out mortgages they can’t afford, or rack up credit card debt to buy flat screen TVs, clothes and appliances, or draw on their home’s equity to finance cars and vacations, well, as they say, you reap what you sow.

[…]But you only have to crack open the business pages, or watch a reality TV show like Gail Vaz-Oxlade’s “Princesses” (about heavily indebted young women) to start questioning the moral purity of the 99%. Many of these people are the authors of their own misery: they consider credit to be cheap, if not free, money. The result is that even here in Canada, the ratio of household debt to personal income has hit a whopping 150%, up 78% in real terms in the past twenty years.

I have no pity for those heavily indebted people, in part because I was once one of them. My love affair with credit started in university. While the limit on that first card was low – $1500 – it allowed a student with a part-time job to buy things she couldn’t otherwise afford (and mostly didn’t need). After getting married, I kept spending, even cashing in my meagre RRSP to help finance the wedding. Post-divorce, I racked up consumer debt, over $15,000 at its peak, at which point I took a harsh look at myself and said: enough. At the time, I was selling my condo: I took the proceeds, paid off the debt, invested the balance, and vowed to both save and pay monthly bills in full, promises I have kept ever since.

Luckily, I got religion well before the meltdown of 2008. But many people didn’t. And this makes them responsible not only for their own problems, but those of their neighbours.

Sure, it’s easy to blame the Wall Street CEOs for bundling rotten mortgages and contriving arcane debt instruments that weren’t worth the paper they were written on. But someone took out those mortgages. Millions of people, actually, who bought more house than they could afford. Did someone hold a gun to their head? No. They were just as greedy as the 1%, only on a smaller scale.

Governments are also just as guilty. In the U.S., Fannie Mae and Freddie Mac granted mortgages to people deemed disadvantaged – minorities, the poor – in the hopes of increasing home ownership. This spurred the private sector to compete and fuelled the infamous subprime mortgage market.

The Canadians have special tax-free savings accounts that encourage them to save money instead of spending it. That’s something that we should do – provide people with tax-free savings accounts. Give people the incentive to save their money instead of spending it.

Commentary

Should the Occupy Wall Street protesters move their protest to Washington, D.C.?

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From the Wall Street Journal.

Excerpt:

Still, if anyone in the Occupy Wall Street movement wants an intellectually honest explanation for why they can’t find a job, they might start by considering what happens to an economy when the White House decides to make pinatas out of the financial-services industry (roughly 6%, or $828 billion, of U.S. GDP), the energy industry (about 7.5% of GDP, or $1 trillion), and millionaires and billionaires (who paid 20.4% of all federal income taxes in 2009). And don’t forget the Administration’s rhetorical volleys against individual companies like Anthem Blue Cross, AIG and Bank of America, or against Chrysler’s bondholders, or various other alleged malefactors of wealth.

Now move from words to actions. Want a shovel-ready job? The Administration has spent three years sitting on the Keystone XL pipeline project that promises to create 13,000 union jobs and 118,000 “spin-off” jobs. A State Department environmental review says the project poses no threat to the environment, but the Administration’s eco-friends are screaming lest it go ahead.

Then there are the jobs the Administration and its allies in Congress are actively killing. In June, American Electric Power announced it would have to shutter five coal-fired power plants, at a cost of 600 jobs, in order to comply with new EPA rules. Those same rules may soon force the utility to shutter another 25 plants. Bank of America’s decision last month to lay off 30,000 employees is a direct consequence of various Congressional edicts limiting how much the bank can charge merchants or how it can handle delinquent borrowers.

These visible crags of the Obama jobs iceberg are nothing next to the damage done below the waterline by the D.C. regulations factory, which last year added 81,405 pages of new rules to the Federal Register, bringing the total cost to the U.S. economy of regulatory compliance to an estimated $1.7 trillion a year.

Less easy to quantify, but no less harmful, are the long-term uncertainties employers face in trying to price in the costs of ObamaCare, Dodd-Frank, the potential expiration next year of the Bush tax cuts, the possible millionaire surcharge, the value of the dollar and so on. No wonder businesses are so reluctant to hire: When you don’t know how steep the trail ahead of you is, it’s usually better to travel light.

If you want to know who is really to blame for poverty, try looking at the Obama administration.

Commentary

Which politician received the most money from Wall Street in the last 20 years?

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The Daily Caller explains how Barack Obama has received the most money from Wall Street bankers of all politicians in the last 20 years. (H/T Neil Simpson)

Excerpt: (with links removed)

Despite his rhetorical attacks on Wall Street, a study by the Sunlight Foundation’s Influence Project shows that President Barack Obama has received more money from Wall Street than any other politician over the past 20 years, including former President George W. Bush.

In 2008, Wall Street’s largesse accounted for 20 percent of Obama’s total take, according to Reuters.

When asked by The Daily Caller to comment about President Obama’s credibility when it comes to criticizing Wall Street, the White House declined to reply.

[…]In fact, the Sunlight Foundation, a nonpartisan watchdog group that tracks lobbyist spending and influence in both parties, found that President Obama has received more money from Bank of America than any other candidate dating back to 1991.

An examination of the numbers shows that Obama took in $421,242 in campaign contributions in 2008 from Bank of America’s executives, PACs and employees, which exceeded its prior record contribution of $329,761 to President George W. Bush in 2004.

According to the Center for Responsive Politics, Wall Street firms also contributed more to Obama’s 2008 campaign than they gave to Republican nominee John McCain.

“The securities and investment industry is Obama’s second largest source of bundlers, after lawyers, at least 56 individuals have raised at least $8.9 million for his campaign,” Massie Ritsch wrote in a Sept. 18, 2008 entry on the Center for Responsive Politics’s OpenSecrets blog.

By the end of Barack Obama’s 2008 campaign, executives and others connected with Wall Street firms, such as Goldman Sachs, Bank of America, Citigroup, UBS AG, JPMorgan Chase, and Morgan Stanley, poured nearly $15.8 million into his coffers.

Goldman Sachs contributed slightly over $1 million to Obama’s 2008 presidential campaign, compared with a little over $394,600 to the 2004 Bush campaign. Citigroup gave $736,771 to Obama in 2008, compared with $320,820 to Bush in 2004. Executives and others connected with the Swiss bank UBS AG donated $539,424 to Obama’s 2008 campaign, compared with $416,950 to Bush in 2004. And JP Morgan Chase gave Obama’s campaign $808,799 in 2008, but did not show up among Bush’s top donors in 2004, according to the Center for Responsive Politics.

Obama’s close relationship with JP Morgan Chase was highlighted earlier this year when he tapped Bill Daley, a former top executive with the bank, to replace Rahm Emanuel as his chief of staff.

Wall Street’s generosity to Obama didn’t end with his 2008 campaign either. Wall Street donors contributed $4.8 million to underwrite Obama’s inauguration, according to a Jan. 15, 2009 Reuters report.

So far Wall Street has raised $7.2 million in the current electoral cycle for President Obama, according to the Center for Responsive Politics. Obama’s 2012 Wall Street bundlers include people like Jon Corzine, former Goldman Sachs CEO and former New Jersey governor; Azita Raji, a former investment banker for JP Morgan; and Charles Myers, an executive with the investment bank Evercore Partners.

This ought to put to rest the myth that Wall Street is composed of greedy Republicans. But it will only work for people who care about the facts.

I blogged before about the Wall Street bailout that Obama pushed through – remember that? Do you think that maybe he was paying off the people that got him elected? Is that what “stimulus” spending really means? Is Solyndra just another example of “stimulus” spending to bail out the people who got him elected?