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Archive for July 9th, 2011

Not water: fire next time

Posted by Charles II on July 9, 2011

FT has a series of interesting articles/video on market risks from fraud and market failure.

1. Increasingly, brokers have the responsibility for policing fraud, since the exchanges do not know what regulatory area the client is in. Many brokers, of course, are completely unequipped to do this, and their only backup are the regulators. You know. The regulators that were completely caught by surprise by the mortgage crisis, Bernie Madoff, etc.

2. There has been limited progress toward regulating derivatives. Foreign exchanges are claiming that the US rules of the long-delayed and much-sabotaged Dodd-Frank are too strict, which of course is the opposite of the truth. Since the US Congress is in the hands of the Four Horsemen of the Apocalypse (my phrase, not the FT’s), there’s no way to get amendments of Dodd-Frank through without risking wrecking the whole thing. This gives plenty of room for financial interests who want to continue reckless practices to quibble about things and prevent any global implementation.

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Krugman on Obama’s Planned Social Security Sellout

Posted by Phoenix Woman on July 9, 2011

There have been a lot of comments about President Obama’s plan to sell out Americans and make drastic cuts to both Medicare and Social Security and make catfood the staple of most elderly persons. But I think I’ll settle for citing Paul Krugman’s:

But let’s be frank. It’s getting harder and harder to trust Mr. Obama’s motives in the budget fight, given the way his economic rhetoric has veered to the right. In fact, if all you did was listen to his speeches, you might conclude that he basically shares the G.O.P.’s diagnosis of what ails our economy and what should be done to fix it. And maybe that’s not a false impression; maybe it’s the simple truth.

One striking example of this rightward shift came in last weekend’s presidential address, in which Mr. Obama had this to say about the economics of the budget: “Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.”

That’s three of the right’s favorite economic fallacies in just two sentences. No, the government shouldn’t budget the way families do; on the contrary, trying to balance the budget in times of economic distress is a recipe for deepening the slump. Spending cuts right now wouldn’t “put the economy on sounder footing.” They would reduce growth and raise unemployment. And last but not least, businesses aren’t holding back because they lack confidence in government policies; they’re holding back because they don’t have enough customers — a problem that would be made worse, not better, by short-term spending cuts.

[…]

Mr. Obama’s people will no doubt argue that their fellow party members should trust him, that whatever deal emerges was the best he could get. But it’s hard to see why a president who has gone out of his way to echo Republican rhetoric and endorse false conservative views deserves that kind of trust.

Exactly.

(Crossposted to Renaissance Post.)

Posted in 'starving the beast', (Rich) Taxpayers League | Tagged: , , , , , | 2 Comments »

 
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