Monday, April 26, 2010

The Goldman Sachs Zionist "Conspiracy"

Once conspiracy theories are established as "truth," they hardly ever die, but instead mutate into ever more viral transmogrifications which have the capacity to poison institutions and governments.

One such theory, the blood libel, has afflicted both Christians and then Jews for centuries. But one less noticed libel has been the persistent charges against the international banking system as being a global Jewish cabal in cahoots with the United States’ supposed attempt to establish domination over the entire global economy. The idea is that "Big Satan" and "Little Satan" are co-conspirators determined to put the global economic system under their heels.

The libel against Jewish owned banks and financial institutions has long roots going back at least as far as the Middle Ages, when lords and knights cooperated in what amounted to extortionist shakedowns of the Jewish owned banks and Jewish communities. Part of their success in so doing was that they distributed libelous propaganda accusing the Jews of wanting world wide financial domination. Most know this conspiracy theory today in its form as anti-Zionism.

One form of the anti-Zionist, Jewish banking cabal theory has been alive and well for many years in the Middle Eastern Arab countries. The editor of "Jewish Comment" summarized the theory well in a 2002 article describing his encounters with some young Arabs who were earnestly exhorting passers by to be aware of the "fact" that "Goldman Sachs and Lehman Brothers were part of the international conspiracy of Jews and Americans to finance Zionist aspirations." (Google "Goldman Sachs, Lehman Brothers and the Great Zionist Conspiracy" for the article and other interesting results.)

The SEC charges of fraud against Goldman Sachs have many facets and political permutations, but one of those facets may be the administration’s attempts to palliate Arabs and Palestinians by legitimizing one of their favorite anti-Zionist tropes. By attacking Goldman Sachs, the Obama administration gives legitimacy to Arab conspiracy theories and anti-Zionist attacks while giving succor to Palestinians who are livid over the Israeli settlements in East Jerusalem and have refused to consider peace talks unless the construction is halted.. Obama himself has been outraged and has pounded Netanyahu for his intransigence over the construction.

The attack on Goldman Sachs, which Marc Faber recently described as a relatively honest company, is a brilliant, multi-pronged but thuggish approach to sidelining or even crippling Goldman Sachs. It reinforces Obama’s attempts to control Wall street by creating a villain he knows the public is willing to throw rotten tomatoes at. It bolsters his aim to pass legislation controlling Wall Street while at the same time it sends not so subliminal messages to Israel and its sworn enemies that Obama is willing to throw a capitalist Jewish banking institution under the bus in order to get his legislation passed while at the same time giving solace, comfort and ratification of conspiracy theories to Israel’s enemies. Obama appears to be entirely willing to sabotage Goldman Sachs, which is integral to much of the West’s financial system.

But the chief aim of this administration in attacking Goldman Sachs is probably not to completely destroy the institution, but to keep it subservient to the US administration–much like the lords and knights of the Middle Ages used extortion and threats to humiliate and control the Jewish bankers. The idea is to wring concessions, confessions and probably hefty fines out of Goldman Sachs while at the same time achieving a multiple but dubious political goals, domestic and international.

However, a goal of the attack on Goldman Sachs, coming as it did just before the proposed sweeping financial "reforms" of the Obama administration, also is to serve as a severe warning to all of America’s banking institutions. It is the psychological equivalent of the Mafia sending a dead fish to a rival. It is the Obama administration making an offer that cannot be refused. For after all, the SEC, with its massive regulatory power can and no doubt will, target selectively those "dead fish" financial institutions the Obama administration wishes to make subservient to his agenda. All banks must now be at constant "red alert" status.

What the political outcome--domestic and international--will be is unknown. But it is quite probable that congress, in its attempts to appear supremely virtuous guardians of the public welfare, will be quite willing to buy into conspiracy theories and into the public anger over financial institutions’ transgressions, real and imagined.

To that end, goaded on by an anti-Israeli president, they may be quite willing to paint a target on Goldman Sach’s back.

[Postscript: The attack on Goldman Sachs is pertinent to Delaware, as it is home to over 50% of all U.S. publicly traded corporations and to some 60% of the Frotune 500. Banks and corporations are not high on the Obama administration's most favored list, so further erosion of Delaware's status as America's corporate capital can be expected as the administration tightens its control over businesses and financial insitutions. But another article would be requred to more fully address the situation.]  

Wednesday, April 21, 2010

The Fall of the House of Finance: More Sarbanes Oxley on the Way

Some time ago, I was sitting in my opthamologist's office and chanced on a magazine I'd never heard of--Stocks, Futures and Options. In it was an interview with George Friedman, who noted the financial elite have lost all credibility. He added the political elite have stepped in to the vacuum. He also said the government and the financial communities "regard one another as incompetent."

The difficulty, Friedman added, is magnified by the fact the "government is not financially efficient. It is built to be politically efficient...Obama has to demonstrate that our institutions or government is capable of effective action, because what would terrify people and create a new crisis is if the political elite appear to have the same incompetence as the financial elite. All hell would break loose...On one side, the political state is saying the financial community is a bunch of greedy scoundrels, while the financial community says the government is a bunch of incompetent bureaucrats."

We are at the impasse Friedman so eloquently and succinctly delineates. The fact of the matter is that the American people no longer have confidence in either their financial institutions or their government. Some 76% of the American public don't trust the government. And most don't trust finacnial insitutions such as Goldman Sachs.

Friedman's assessment has come true, and all hell is breaking loose.

In the effort to put itself in the driver's seat, reclaim the confidence of the American people--or at least divert attention away from its incompetence--and to fatally weaken Wall Street, the administration is seeking further control over the financial sector. Doubtless we will be looking at another Sarbanes Oxley Act--on speed.

The result will be an economy that is furthered weakened. The above mentioned Sarbanes Oxley Act has already weakened corporations by demanding a flood of paper work and extra employees to manage accounting procedures. None of the reforms has actually dealt with the underlying problems the Enron scandal exposed and to which congress reacted, as Friedman points out, with political rather than economic efficiency. What Friedman, an Obama supporter who believes the president can restore trust to government, does not note is that political "efficiency" exhibited as total regulatory control always cripples economic efficiency.

Sarbanes Oxley is a perfect illustration of the truth that political solutions have a way of retarding or crippling industry. As Alan Reynolds of the Cato institute notes:

The Sarbanes-Oxley law was unnecessary, inadequate and harmful. It was unnecessary because the SEC already had the authority to do everything the law demands about accounting or corporate boards. Sarbanes-Oxley was inadequate, if not irrelevant, because it failed to deal with any fundamental institutions, laws or incentives that might have contributed to major bankruptcies in the wake of the 2001 recession. The 1968 Williams Act has made it too difficult to take over mismanaged companies, for example. And higher tax rates on dividends before 2003 helped devious managers camouflage overstated earnings (companies can't pay dividends with bogus earnings).

Sarbanes-Oxley has proven harmful to the U.S. economy, and to the value of stocks still listed on U.S. exchanges, because it greatly increases the costs and risks of doing business as a publicly traded U.S. corporation and it increases the risks of serving as a director or officer. Sarbanes-Oxley has essentially the same effect as a large but unpredictable increase in corporate taxes. Congress must at least lighten the heavy load of this ill-considered regulatory tax, assuming insufficient humility and courage to repeal it. Even in politics it is generally wiser to admit mistakes and fix them than to fall into the familiar bad habit of assuming that good intentions excuse bad results.

Stephen Boyko, author of We're All Screwed warns that toxic regulation will crush the free market system. He writes:

Bad rule writing has resulted in bad legislation, such as the Sarbanes Oxley Act of 2002, and has created an ineffective system for regulating the U.S. capital markets. If we don't act fast, the 2008 subprime stack market crash could potentially result in more toxic regulation. [A prescient comment, as more toxic regulation is on its way.]

He advocates an answer: "fostering entrepeneurialsm; segmenting the market to account for size, capital and scope; and using a three dimensional model for regulation."

While GeorgeFriedman probably would not say so, Milton Firedman would say the more the political sphere of influence intrudes into the economic sphere of influence, the more likely the slide into socialism and tyranny.

The halt to this slide will only occur by embracing two major reforms. The first is a return to true federalism with an emphasis on states' initiatives, whence have come some brilliant economic models. My own state of Delaware once had such a model intitated by Governor Pete duPont, but it has been seriously eroded under the last few administrations.

The second is a return to a balance of governmental and economic spheres of influence. Any institution's integrity and effectiveness cannot remain if it is unceasingly violated and controlled by another. (This truism is valid for any institution, be it religious, governmental, economic, military or educational.)

If at one time American industrialists had too much power over the federal and state governments, that certainly is not the case now. Beginning with Theodore Roosevelt and accelerating steadily throughout the last century, the ascension of federal control over the states, traditionally a breeding ground for economic innovation and the financial institutions of our country, now at least temproarily discredited and under increased scrutiny and attack, is nearly complete.

It looks like this current administration is poised to push the accelerator to the floor by pushing the enactment of another Sarbanes Oxley Act.

More onerous regulation is not the answer for giving renewed health to our financial institutions. There are plenty of regulations already on the books, some legitimate; some not. A massive effort to distinguish between the necessary and unecessary regulations already on the books is long overdue and would result in a burst of economic prosperity scarcely imaginable in these dark economic times.

Saturday, April 17, 2010

We are Amused: Obama as Royalty

A quote attributed to Queen Elizabeth I (sometimes to Queen Victoria) has the offended aristocrat icily dismissing a courtier's off color comment thusly: "We are not amused." The use of the royal "we" was meant to declare to the offender that he had angered queen, demeaning her status as the epitome of excellence and majesty.

Americans have never been intimidated or silenced by the use of the royal "we" because they have have not been under the rule of an aristocratic class for the last two and a half centuries. In fact, no American president has ever dared to put down a large segment of the American people as if he were a king irritated by his subjects.

That is, until now.

President Obama recently has stated the Tea Party crowds who protest his tax policies "amuse" him. He feels they should be grateful to him.

Such statements by the leader of Americans certainly make it seem as if Obama sees himself as an aristocratic bent on ignoring, demeaning and controlling unfavored segments of the American people, especially those who dare to show "disrespect" by declaring their opposition to the administration's politices.

Think about it.

The president of all the people of the United States of America believes the Tea Partiers' concerns and protests are "amusing." He considers them ungrateful wretches. His attitude of "let them eat cake" is dangerously dismissive as well as divisive. His statements indicate he sees his position as one of "me" against "them."

I can recall no president in history who has brushed aside his fellow citizens and their concerns with such overtly snobblish and cavalier dismissal.

The above is not to say there haven't been presidents who hae been angered by large segments of the populace. It is not to say there haven't been presidents who have wished they didn't have strong opposition. It is to say, however, that to my recollection, there has never been a president who has consistently demeaned, derided and ignored large segments of US society.

Our president gives example after example of behavior which indicates he believes himself to be above the masses by reason of his intelligence, power and absolute rightness of his causes. When a president has an attitude of disdain toward the people he has been elected to serve, it indicates he doesn't wish to represent the people. It reveals he wishes to rule the people.

President Obama is in for a shock by November as alienated Americans send a message to him: You are not a king. You are an elected representative of the American people who is called to listen to and to act on behalf of all American citizens, even those who disagree with you.

This November voting Americans will tell the president, "We are not amused."

Monday, April 12, 2010

On Civility: Calls for civility can be a means of silencing oppostion

Although the political left has continually demeaned the Tea Party movement, it has also constantly called for civility of discourse. Those who are in the Tea Party movement need to recognize and to resist both the attempts to discredit it as well as to ignore the calls for civil dialogue as defined by the left. They must do so because radical progressives’ tactics of vilification combined with calls for civility and peaceful bipartisanship are twin prongs of a strategy meant to discredit and silence the opposition.

Of course it is necessary for the Tea Party to confront, challenge and diffuse the various smears directed toward conservative political groups springing up all over the United States. The charges leveled against the Tea Party have included racism, violence, hate speech, ignorance, lack of education and even a penchant for outdoor barbeques and fast cars.

While the new patriotic groups must pick off such charges one by one, demanding evidence and refuting false accusations; at the same time, such charges must not succeed in their chief mission, which is to vitiate the opposition by putting it continually on the defensive. The new movements must not lose the impetus of offensive strategies, chief among which are preventing the election of candidates for office who do not stand for the transcendent values of the Judeo-Christian ethic, which ethic was one of the chief impetiti behind the formation of the US constitution.

But the diversionary tactics employed by the liberal left to keep the Tea Party movement constantly on the defensive are coupled with a more subtle strategy; namely, a call to civility as defined by the far left. The goal of radical progressives, who seldom--if ever-- follow their own advice, clearly is to vitiate the Tea Party’s claims to truth and its attempts to reform the US political system by rendering it so meek and mild, so intimidated and soft spoken that it becomes utterly ineffective as a political reform movement. In brief, the constant calls for "civility" can be a thinly disguised means for silencing protestors.

It is important to make a distinction between gratuitous incivility and moral outrage. Human discourse, if it is to be meaningful, abides by generally recognized rules of civil behavior. Such rules exclude profanity, name calling, and unjustifiable personal attacks. Also excluded are slander, rumor mongering and sexually charged innuendoes.

But the left, and sometimes "moderate" or liberal Republicans, have sought to extend the rules of generally recognized civil behavior to include strong expressions of moral outrage. Many times the attempt is made to define genuine moral outrage as incivility; or worse, racism. To that end, members of the opposition from the left often have sought to silence conservatives by attempts to make the Tea Party and other conservative groups speak the language of the left, to accept the left’s terms of debate, which are almost always put in the context of race, victimization, political correctness and multi-culturalism.

To put it another way, progressives have certain doctrinal assumptions as the bases of any dialogue and seek to rope in and corral opposition by requiring the opposition to speak the language of the left and to define moral issues according to progressive priorities. That is one reason why the left most often resorts to the constantly repeated and by now often the merely rhetorical trope of racism. [A caveat: The reduction of the term by making it ubiquitous and all encompassing has been tragic for minorities, as the dilution of racism’s true meaning weakens justifiable attempts to confront and eradicate genuine cases of racist behavior.]

But the point of this small essay is that it is imperative for conservatives to refuse to accept the left’s definition of racism. As noted, "racism" has become a catchall category embracing the nearly the entirety morality and politics. If at one time, the mere hint of sexual misconduct was enough to bring down any political leader, all it takes nowadays to destroy a reputation and to end a career is the charge of racism It is a means of achieving--without dialogue, reasoning or factual proof--instant condemnation of conservative opposition.

In sum, being guilty of any of the multiple and increasingly arbitrary interpretations of racism by the left are the equivalent of a Christian irrevocably breaking the Great Commandment.

The Tea Party and other conservative groups must not allow genuine moral indignation to be redefined as incivility or racism. Moral indignation arises from recognition of evil. In turn, recognition of evil requires strong language, strong confrontation and strong action. The prophets of ancient Israel and Jesus Christ all used strong language to define and to confront the injustices and societal ills of their time.

The members of the Tea Party movement should encourage one another to follow those illustrious examples. By so doing, they will avoid falling prey to scurrilous attacks which keep them always on the defensive and to attempts to silence them by false charges of racism and hypocritical, spurious calls for "civility."
It is extremely important for member of the Tea Party and other groups to speak boldly and truthfully; to refuse to abide by the left’s terms of debate and to articulate clearly and precisely their short and long term goals.

Moral truth is the always the first and most necessary requirement of any political movement.