November 24, 2008

Reason Online: Clinton Admin Credited Deregulation for Good 1990s Economy

Also, 1999 New York Times Article Noted Clinton’s Enthusiasm for Financial Deregulation

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During the presidential campaign, we constantly heard from Team Obama and the media (excuse the redundancy) was how Republican-inspired deregulation had let evil bankers and capitalists run roughshod over the economy and created the current credit mess.

Well, a lot of the deregulation was GOP-inspired, but that isn’t what caused the situation that I like to refer to as The Great SUCKUP (The Seemingly Unlimited Cash Kitty Under Paulson).

What John Berlau has found at Reason Online is that the Clinton Administration loved 1990s financial deregulation so much that it cited it as a major accomplishment.

Berlau provides the proof:

….. when the credit crisis emerged as the top campaign issue, Sen. Barack Obama (D-Ill.) pounced on his opponent with two basic messages. One was to blame the policies of deregulation that Sen. John McCain (R-Ariz.) voted for. And the second was to hug former rivals Bill and Hillary Clinton as hard as he could and harken back to the prosperity and economic growth of the 1990s.

….. But now that he has won the presidency and must, as the cliché goes, shift from campaigning to governing, Obama and his economic team will have to face up to a paradox that most of the media overlooked during the campaign. Namely, the Obama campaign’s twin messages of bashing deregulation and embracing the Clinton years were inherently contradictory. Bill Clinton signed nearly every deregulatory measure that John McCain backed—the same measures that are now being blamed (wrongly) for helping cause the current crisis. What’s more, Clinton administration officials have credited these policies for contributing to the ‘90s economic boom—the very “shared prosperity” that Obama says he wants to go back to.

Late in Clinton’s tenure, the White House put forth a document celebrating “Historic Economic Growth” during the administration and pointing to the policy accomplishments it deemed responsible for this growth. Among the achievements on Clinton’s list were “Modernizing for the New Economy through Technology and Consensus Deregulation.” That’s right, a Clinton White House document credited part of the administration’s success to that now dreaded d-word, deregulation.

“In 1993,” the document explained, “the laws that governed America’s financial service sector were antiquated and anti-competitive. The Clinton-Gore Administration fought to modernize those laws to increase competition in traditional banking, insurance, and securities industries to give consumers and small businesses more choices and lower costs.”

Everything in those passages is true.

….. So to the extent that Obama has said he would reverse financial deregulation, what he would largely be overturning are the financial modernizations Bill Clinton signed into law and that Clinton administration officials agree led to the ‘90s prosperity.

This is interesting, in that “1990s GOP-led deregulation” was constantly blamed for the credit mess during the campaign.

But any 2008 campaign reporter could have looked at a well-known source to prove that Obama’s one-sided one-party claims were bogus, namely the New York Times of October 23, 1999. There, in an article entitled “A New Financial Era,” reporter Stephen Labaton quoted Mr. Clinton and Treasury Secretary Lawrence Summers gushing as follows:

”When this potentially historic agreement is finalized,” Mr. Clinton said in a statement, ”it will strengthen the economy and help consumers, communities and businesses across America.”

Treasury Secretary Lawrence H. Summers said in an interview, ”At the end of the 20th century, we will at last be replacing an archaic set of restrictions with a legislative foundation for a 21st-century financial system.” The measure, he added, ”would provide significant benefits to the national economy.”

This is just another in a virtually endless string of examples showing how traditional media ran with every lie and half-truth Team Obama putting even the slighest bit of energy into investigating them.

By the way, the reason the conditions that led to the bailout calls came about had nothing to do with deregulation in the private sector. Instead, they had to do with having no meaningful regulation or oversight at “government-sponsored enterprises” now turned “government-controlled enterprises” Fannie Mae and Freddie Mac.

Those two entities abused their intended charters by piling up untold billions of dollars of loans they kept on their own books instead of securitizing. They also irresponsibly relaxed lending standards to the point that they ultimately ruined the mortgage marketplace. Fitful GOP attempts at establishing meaningful regulation and oversight at Fan and Fred were rebuffed by their mostly Democratic protectors, who, including Obama, just so happened to be flush with campaign cash from the two entities.

Whether the bailout mania is or isn’t justified (I think not), it’s clear that what happened at Fan and Fred was both a cause and a precursor to the worse situations that arrived at Henry Paulson’s doorstep.

Cross-posted at NewsBusters.org.

Column of the Day: Walter Williams on Legalized Theft

Every year or so, the George Mason economist reminds us that socialism is legalized theft, and that all too much of what our government already does indeed fits that description (HT my guardian angel):

Evil Concealed by Money

Evil acts can be given an aura of moral legitimacy by noble-sounding socialistic expressions such as spreading the wealth, income redistribution or caring for the less fortunate. Let’s think about socialism.

Imagine there’s an elderly widow down the street from you. She has neither the strength to mow her lawn nor enough money to hire someone to do it. Here’s my question to you that I’m almost afraid for the answer: Would you support a government mandate that forces one of your neighbors to mow the lady’s lawn each week? If he failed to follow the government orders, would you approve of some kind of punishment ranging from house arrest and fines to imprisonment? I’m hoping that the average American would condemn such a government mandate because it would be a form of slavery, the forcible use of one person to serve the purposes of another.

Would there be the same condemnation if instead of the government forcing your neighbor to physically mow the widow’s lawn, the government forced him to give the lady $40 of his weekly earnings? That way the widow could hire someone to mow her lawn. I’d say that there is little difference between the mandates. While the mandate’s mechanism differs, it is nonetheless the forcible use of one person to serve the purposes of another.

Probably most Americans would have a clearer conscience if all the neighbors were forced to put money in a government pot and a government agency would send the widow a weekly sum of $40 to hire someone to mow her lawn. This mechanism makes the particular victim invisible but it still boils down to one person being forcibly used to serve the purposes of another. Putting the money into a government pot makes palatable acts that would otherwise be deemed morally offensive.

This is why socialism is evil. It employs evil means, coercion or taking the property of one person, to accomplish good ends, helping one’s fellow man. Helping one’s fellow man in need, by reaching into one’s own pockets, is a laudable and praiseworthy goal. Doing the same through coercion and reaching into another’s pockets has no redeeming features and is worthy of condemnation.

Some people might contend that we are a democracy where the majority agrees to the forcible use of one person for the good of another. But does a majority consensus confer morality to an act that would otherwise be deemed as immoral?

….. The bottom line is that we’ve become a nation of thieves, a value rejected by our founders. James Madison, the father of our Constitution, was horrified when Congress appropriated $15,000 to help French refugees. He said, “I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.” Tragically, today’s Americans would run Madison out of town on a rail.

Extending Dr. Williams’s thoughts, the existing and proposed bailouts represent legalized theft accomplished through blackmail. We’re now to the point where designated recipients, as seen in the CNBC video at this link, are forced to take money they neither want nor need — and to accede to government control (the commentator quoted is speaking figuratively):

….. the Treasury Secretary Hank Paulson put all these egos in the room, and basically put guns to their heads, forcing them to take the money to bolster the banking system.

Some of the firms say they didn’t want the cash …..

And Paulson at one point said, “Listen, if you don’t want it, it doesn’t matter, gun to your head, you gotta take it.”

As you can see at the vid, those who report such things are either untroubled by them or, even worse, openly supportive.

Of the country’s two major political parties, one openly supports these evils and calls them good, while the other all too often puts up only token resistance.

Thus, evil continues to spread.

Positivity: American troops in Afghanistan through the eyes of a French OMLT infantryman

Filed under: Positivity,US & Allied Military — Tom @ 5:56 am

This is “a rare and moving testimony” from a French soldier (French original here):

“We have shared our daily life with two US units for quite a while – they are the first and fourth companies of a prestigious infantry battalion whose name I will withhold for the sake of military secrecy. To the common man it is a unit just like any other. But we live with them and got to know them, and we henceforth know that we have the honor to live with one of the most renowned units of the US Army – one that the movies brought to the public as series showing “ordinary soldiers thrust into extraordinary events”. Who are they, those soldiers from abroad, how is their daily life, and what support do they bring to the men of our OMLT every day ? Few of them belong to the Easy Company, the one the TV series focuses on. This one nowadays is named Echo Company, and it has become the support company.

They have a terribly strong American accent – from our point of view the language they speak is not even English. How many times did I have to write down what I wanted to say rather than waste precious minutes trying various pronunciations of a seemingly common word? Whatever state they are from, no two accents are alike and they even admit that in some crisis situations they have difficulties understanding each other.

Heavily built, fed at the earliest age with Gatorade, proteins and creatine – they are all heads and shoulders taller than us and their muscles remind us of Rambo. Our frames are amusingly skinny to them – we are wimps, even the strongest of us – and because of that they often mistake us for Afghans.

Here we discover America as it is often depicted : their values are taken to their paroxysm, often amplified by promiscuity lack of privacy and the loneliness of this outpost in the middle of that Afghan valley. Honor, motherland – everything here reminds of that : the American flag floating in the wind above the outpost, just like the one on the post parcels. Even if recruits often originate from the hearth of American cities and gang territory, no one here has any goal other than to hold high and proud the star spangled banner. Each man knows he can count on the support of a whole people who provides them through the mail all that an American could miss in such a remote front-line location : books, chewing gums, razorblades, Gatorade, toothpaste etc. in such way that every man is aware of how much the American people backs him in his difficult mission. And that is a first shock to our preconceptions : the American soldier is no individualist. The team, the group, the combat team are the focus of all his attention.

And they are impressive warriors ! We have not come across bad ones, as strange at it may seem to you when you know how critical French people can be. Even if some of them are a bit on the heavy side, all of them provide us everyday with lessons in infantry know-how. Beyond the wearing of a combat kit that never seem to discomfort them (helmet strap, helmet, combat goggles, rifles etc.) the long hours of watch at the outpost never seem to annoy them in the slightest. On the one square meter wooden tower above the perimeter wall they stand the five consecutive hours in full battle rattle and night vision goggles on top, their sight unmoving in the directions of likely danger. No distractions, no pauses, they are like statues nights and days. At night, all movements are performed in the dark – only a handful of subdued red lights indicate the occasional presence of a soldier on the move. Same with the vehicles whose lights are covered – everything happens in pitch dark even filling the fuel tanks with the Japy pump.

And combat ? If you have seen Rambo you have seen it all – always coming to the rescue when one of our teams gets in trouble, and always in the shortest delay. That is one of their tricks : they switch from T-shirt and sandals to combat ready in three minutes. Arriving in contact with the ennemy, the way they fight is simple and disconcerting : they just charge ! They disembark and assault in stride, they bomb first and ask questions later – which cuts any pussyfooting short.

We seldom hear any harsh word, and from 5 AM onwards the camp chores are performed in beautiful order and always with excellent spirit. A passing American helicopter stops near a stranded vehicle just to check that everything is alright; an American combat team will rush to support ours before even knowing how dangerous the mission is – from what we have been given to witness, the American soldier is a beautiful and worthy heir to those who liberated France and Europe.

To those who bestow us with the honor of sharing their combat outposts and who everyday give proof of their military excellence, to those who pay the daily tribute of America’s army’s deployment on Afghan soil, to those we owned this article, ourselves hoping that we will always remain worthy of them and to always continue hearing them say that we are all the same band of brothers”.