Friday, November 4, 2011

Corzine, ACORN, and October Numbers--three things that don't bode well for Obama

What’s new today

Our # 1 tells us about Jon Corzine’s resignation from MF Global.  He won’t see a severance package.  #2 explains what Corzine was trying to do.  #3 relates how ACORN in New York is trying to insulate itself from further leaks showing that they are involved in OWS.  #4 talks about social justice and how it’s worked in the past.  #5 explains how socialism has simply failed even why capitalism has succeeded.  #6 talks about jobs gained in October.  #7 shows Vanderbilt University requiring conformity in its diversity.  Finally story #8 talks about how regulations are strangling small business. 

1.   Corzine Resigns

MF GLOBAL’S CHIEF EXECUTIVE JON CORZINE HAS RESIGNED as head of the brokerage firm which filed for bankruptcy on Monday after a series of bets on European government debt soured.

CORZINE, A FORMER NEW JERSEY GOVERNOR WHO ONCE RAN GOLDMAN SACHS, is under a cloud for allegedly failing to protect clients' investments by cordoning off their funds from the firm's money. THE FIRM IS BEING PROBED BY THE FBI AND BY REGULATORS because it has not accounted for hundreds of millions of dollars worth of clients' money.

MF's board announced Friday in a brief statement that CORZINE HAD RESIGNED FROM ALL POSTS AND CONFIRMED THAT HE WILL NOT SEEK ANY SEVERANCE PAYMENTS, which The Associated Press reported could have amounted to $12.1 million including cash and benefits.

The tragedy here is that Corzine not seeking any severance payments seems to be a step up from what we are used to.  The President of Solyndra got $500,000 in severance two months before the company declared bankruptcy (who do you think paid for that?) and recently the top officers in Fannie and Freddie were given million dollar bonuses right before they came to congress asking for a $6 billion bailout. 

2.   What Was Corzine Thinking???

What attracted him to such basket cases -- with huge welfare states, large deficits, little if any economic growth and unproductive workforces?

Their price. THEY WERE TRADING RELATIVELY CHEAPLY, thanks to fears that the euro crisis could lead both nations to default on their debt. But CORZINE WAS SURE BOTH COUNTRIES WOULD EVENTUALLY BE BAILED OUT.

The Europeans, he figured, had learned from the Americans that government can “save” the financial system and prevent banks from dying. If you can bail out a massive bank like Citigroup, with nearly $1 trillion in customer deposits, why can’t you bail out a country like Italy?

THAT WAS CORZINE’S INVESTMENT STRATEGY -- AND, MUCH LIKE HIS STRATEGY FOR GROWING NEW JERSEY’S ECONOMY, IT DIDN’T WORK SO WELL. As most people are now well aware, the US bank bailouts didn’t accomplish one of their main goals, namely to repair the banking system so small business could get loans and capital. Who in their right mind would say Bank of America, the nation’s largest and most troubled bank, has put the financial crisis behind it?

Plus, bailing out banks isn’t quite like bailing out countries -- as the about-to-fall-apart bailout of Greece proves.

As the latest Greek deal began collapsing, traders started looking for which firms were most exposed. Not long after that, Jon Corzine’s MF GLOBAL BECAME THE WALL STREET EQUIVALENT OF GREECE.

Corzine isn’t saying much now that the messy details of MF Global’s final days have become front-page news. The FBI  is looking into the matter. and there’s a civil inquiry into the firm’s demise, so his lawyers are keeping him out of public view.

3.   Acorn in Serious Damage Control over OWS


NYCC also is installing surveillance cameras and recording devices at its Brooklyn offices, removing or packing away supplies bearing the name ACORN and handing out photos of Fox News staff with a stern warning not to talk to the media, the sources said.


Acorn?  Isn’t the organization that folded after numerous scandals and that BHO legally represented in the 1990s? 

4.   Social Justice

Imagine someone showing up at your home and saying: “We’re from the government. We’ve determined that this dwelling has more living space than you and your family need. There are so many people who do not have enough. So we’re going to move another family in with you.” THIS ACTUALLY HAPPENED TO MANY PEOPLE FOLLOWING THE 1917 REVOLUTION IN RUSSIA. Among the legacies of the tsars was glaring economic inequality. The new leadership saw that as a serious problem. To solve it required policies designed to achieve “economic justice.” SO, OVERNIGHT, PRIVATE HOMES BECAME TENEMENTS. AND FOR MORE THAN 70 YEARS, THE SOVIET UNION SPREAD POVERTY.

Fast forward to Europe today which is suffering an acute economic crisis. What has gone wrong in Greece and several other countries may be seen as complicated, involving sovereign debt, liquidity, fiscal and monetary policies. Or it can be seen simply: For years, the Greeks have been consuming more than they produce. They have borrowed money and don’t have the means to pay it back. Now they are faced with the prospect of increasing austerity. THEY THINK THAT’S UNFAIR. THOUSANDS OF PEOPLE HAVE TAKEN TO THE STREETS TO DEMAND ECONOMIC JUSTICE WHICH SEEMS TO MEAN SOMEONE ELSE PAYING THE BILLS they have run up in the past and plan to run up in the future. One might have expected Americans – self-sufficient rugged individualists that we are – to scoff at such behavior. But from sea to shining sea, THE OCCUPY WALL STREET MOVEMENT IS EMULATING THE GREEKS AND, IN MORE THAN A FEW INSTANCES, ECHOING THE SOVIETS.

The problem with socialism is that it erodes the wealth of society even at it makes people feel entitled to that higher level of living.  It contains within it the seeds of its own destruction.

5.   Is Obama the President we Deserve?

…In Principles of Political Economy (1848), John Stuart Mill (1806-1873) gave three reasons to severely limit government interference in a nation's economy and markets. First, ANY INCREASE IN GOVERNMENT POWER IS A THREAT TO HUMAN INDIVIDUALITY, FREEDOM, AND ORIGINALITY, qualities necessary for the progress of the human race. Second, MARKET ECONOMIES FUNCTION MORE EFFICIENTLY AND PRODUCE MORE PROSPERITY. Third, laissez-faire economies inculcate moral virtues in citizens by making them more self-reliant, virtuous and intelligent. "A people," Mill explained, "who expect to have everything done for them ... have their faculties only half developed."

The test of any theory is experiment, but IT IS VIRTUALLY IMPOSSIBLE TO CONDUCT LARGE-SCALE CONTROLLED EXPERIMENTS IN ECONOMICS. It is difficult to even make meaningful and unambiguous comparisons between countries. Nations differ -- not only in economic systems, but in cultures, languages, traditions, geographies, and natural resources. To test socialism versus capitalism, we would have to take one or more countries with similar social and physical characteristics and divide them in half. After assigning a different economic system to each country, we would then sit back for fifty years and observe what happens.

BUT THIS EXPERIMENT HAS ALREADY BEEN PERFORMED THROUGH AN ACCIDENT OF HISTORY. We know the answer. At the close of World War II, GERMANY AND KOREA WERE DIVIDED INTO SOCIALIST AND MARKET ECONOMIES. SOCIALISM FAILED DRAMATICALLY. East Germany had to build the Berlin Wall just to keep people from fleeing. North Korea is still in the stone age. A satellite photo taken at night shows South Korea ablaze with the light of civilization. But North Korea is dark, both literally and metaphorically.

In the U.S., we exist in a curious state of denial. WE ACKNOWLEDGE THE INFERIORITY OF SOCIALISM BUT CONTINUE TO BECOME MORE AND MORE SOCIALISTIC. Every attempt to shrink the size of government or repeal a regulation brings about a shriek, like a bottle being pulled out of the mouth of an infant. I cannot recall a Republican president or Congress who reduced the size of the federal government. No one wants to surrender a special privilege or entitlement. We know what the best system is, but we lack the discipline to return to it….

Even though we know socialism is a fools dream, the left continues to defend it and pretend “social justice” reforms do not mean socialism.  Of course it does, but changing the language is the tactic the left uses to obscure that reality.



sector rose, with modest job growth continuing in professional and businesses services, leisure and hospitality, health care, and mining.Government employment continued to trend down.

Household Survey Data

Both the number of unemployed persons (13.9 million) and the unemployment rate (9.0 percent) changed little over the month. THE UNEMPLOYMENT RATE HAS REMAINED IN A NARROW RANGE FROM 9.0 TO 9.2 PERCENT SINCE APRIL. (SEE TABLE A-1.)

Pretty neutral report.  It doesn’t hurt Obama, but it doesn’t help either. 

7.   Conformity for the sake of Diversity

Illustrating an intellectual confusion common on campuses, Vanderbilt University says: To ensure “diversity of thought and opinion” we require certain student groups, including five religious ones, to conform to the university’s policy that forbids the groups from protecting their characteristics that contribute to diversity. 

Last year, after a Christian fraternity allegedly expelled a gay undergraduate because of his sexual practice, Vanderbilt redoubled its efforts to make the more than 300 student organizations comply with its “long-standing nondiscrimination policy.” That policy, says a university official, does not allow the Christian Legal Society “to preclude someone from a leadership position based on religious beliefs” So an organization formed to express religious beliefs, Including the belief that homosexual activity is biblically forbidden  is itself effectively forbidden. …

This is a very good op-ed piece as are most of those written by George Will.  It appears Vanderbilt is giving us the University version of the “we had to destroy the village in order to save it.” 

8.   Blanche Lincoln turns on Obama over Overregulating Small Business

This week, former Arkansas Senator Blanche Lincoln (D) lead a cadre of small business owners from a number of states to Washington in an attempt to convince Congress that their commitment to over-regulating American entrepreneurs is a surefire way to destroy the American economy.

This week, former Arkansas Senator Blanche Lincoln (D) lead a cadre of small business owners from a number of states to Washington in an attempt to convince Congress that their commitment to over-regulating American entrepreneurs is a surefire way to destroy the American economy.

According to the Small Business Administration, regulations on American small businesses, which comprise 60 percent of all private-sector jobs and account for about two thirds of jobs created each year, deprive the American economy of $1.75 trillion annually. By reducing – or at least compromising – on current regulations and letting go of the nearly 4,200 regulations on the table right now to be passed this session, Congress could stimulate one of the fastest-growing American industries. Unfortunately for Blanche Lincoln and her team of American business owners, Congress will be hard to convince.

Lincoln is trying at a very unique time, though, when quick action could prevent a lot of further harm to the American economy. As we stated, 4,200 regulations are in the pipeline, just waiting for Congressional approval. Of those, 845 directly affect small businesses. And that’s just the tip of the iceberg. There are also 330 new EPA regulations coming down the pipe, all of which are designed to specifically regulate how American small businesses do their job. Without expensive lawyers to fill out regulatory paperwork, and expensive lobbyists to fight the fight on their behalf, small businesses usually just take the regulations sitting down, devoting time and money they could spend growing their businesses and hiring more out of work Americans to doing dirty work provided to them by the US government.

Although not perfectly conservative, Lincoln and her organization are proposing a set of guidelines that would help Congress and the Obama administration curb regulations and more closely analyze the impact of their actions on small business owners.

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