Roblimo's Journal: I Blame Democrats for the Current Wave of Ponzi Scheme Prosecutions

The Ponzi scheme prosecutions we've been reading about lately are unfair, and I blame the Democrats, or "Dumbocrats" as some call them, for treating business people as criminals when all they were trying to do was maximize profits.

Here's why:

For many years, starting with Ronald Reagan, all patriots have worked not only to "starve the beast" of government in order to stave off socialism and go back to the time when we all lived like Thomas Jefferson in the full glow of personal responsibility outlined in the Sacred U.S. Constitution, aided only by our slaves, but also to "deregulate" our financiers and corporate executives.Starting in the 1930s, our government passed many evil regulations that kept brave entrepreneurs from maximizing their profits. By the time Reagan (bless his holy name) became President, many of our nation's leading financial executives were only able to afford three or four houses, one or two yachts, and often could only support three or four ex-wives and two or three mistresses.

Reagan and the other Republicans came to the aid of our beleaguered financiers by lifting many onerous regulations from their shoulders while, at the same time, cutting taxes and raising government expenditures, thereby putting our country into greater debt than it had ever been in before, which forced cutbacks in enforcement by those once charged with regulating (what the teabaggies call "hobbling") our Great Financial System.Naturally, this deregulation proved to be a boon to many speculators. A few overreached, perhaps just a tad, and brought about a savings and loan crash. But not to worry! Our taxes bailed everyone out -- except the small investors, but who cares about them? I mean, do a bunch of old people in Florida really matter to anyone?

The example of the S&L debacle excited financiers so much that they funded a lot of "institutes" with names like Cato and American Enterprise and even a "Club for Growth," and had these "institutes" pour out studies and articles and op-eds that proved government was always evil, while anything Private Industry did was pure, unadulterated Good. Greed was Good, yesiree Robert!And Republicans bought into this in a big way. More deregulation! Why, a Republican Congress even managed to repeal the depression-era bank anti-speculation regulations and -- get this -- made derivative trading legal even though for many decades it had been prohibited under anti-gambling laws.

Ah, the sweet breath of freedom!

CEO salaries jumped and new financial schemes abounded. Brokers bought bigger yachts (for themselves, not for their customers), real estate mavens borrowed more money than they had ever been allowed to borrow before, and some of them (Donald Trump was a prime example) managed to have some of their companies go broke (thereby stiffing investors) while other companies they controlled prospered. What a boon for capitalism!

Naturally, there were silly people who still squawked about fiscal sanity and how all this was undermining our Judeo-Christion belief in hard work and rewarding labor and thrift. These sillies were obviously socialists or communists, and the various Institutes and their media stooges (who, but this time numbered far more than the original three) talked incessantly about the Wonders of the Free Market and how we would all benefit if we moved most of this country's blue-collar jobs overseas -- and some of our more lucrative white-collar jobs, as well.

Greed is Good! Capitalism Rules! Bigger yachts. More mistresses. More layoffs -- but don't worry, Wal~Mart and Target and Home Despot have lots of $8/hour jobs. Not quite as much as you *used* to make, but that's okay. The world is flat, and corporate profits are more important than small-timers who can't afford health insurance, decent housing, and other, similar luxuries.

In fact, with profit as the *only* measure of a company's or investor's success, why not skip the part about actually making things or selling goods and services or actually using investment clients' money to buy stocks, the way fuddy-duddies like Warren Buffett did? Why not just take the clients' money and SPEND it? And, meanwhile, keep promising new investors solid profits and endless growth from now unto eternity?

Is this not the holy grail of deregulated capitalism, American-style? To cut the payroll to zero or next to it? To make profits of nearly 100% on all money taken in while giving nothing back in return, all the while producing no useful goods or services because doing so would create overhead, thereby lowering the Holy Profit Margin?

So you had derivatives, securitized debt, and even more flagrant financial scams all over the place. Happy, happy, happy. Donald Trump even thought about buying a better toupee (but obviously decided against it). Mistresses got bigger breast enlargements than ever. The yachts got HUMONGOUS. A presidential candidate who was married to an Arizona heiress literally forgot how many homes he and his wife owned, and told us it took $5 million to belong to the middle class.

But while life was full of joy for the people who count in America, those sneaky communist Democrats somehow managed to grab control of Congress in 2006, and started looking into some of the stranger financial goings-on in our once-proud country.

Now, there had been a few scandals already that were so flagrant even Republicans couldn't hush them up. Remember Enron? And MCI? Ponzi schemes!

Also, please do not think all Democrats wore halos. Plenty of them were just as corrupt as their Republicans counterparts, which was very sad. I mean, we *expect* Republicans to steal and help their henchmen steal, and to do nasty corporate welfare deals like the Medicare Advantage insurance company giveaway and the "Welfare for Big Pharma" Medicare prescription plan. Democrats are supposed to be different. They're supposed to work to make our country better, and we have a right to be disappointed when they act as venal as Republicans, just as we have a right to get angry at Republicans who dare to have sex -- unless it is strictly for procreation, in the missionary position, with a spouse who doesn't enjoy it much.

So, anyway: after all those "Greed is Good" and "Private Industry Good, Government Bad," years, we started to see actual enforcement of some of the anti-fraud laws the Republicans hadn't yet been able to repeal.

We've had a few show trials of small fry like Madoff and Diamond. We haven't arrested Goldman Sachs or Citi or B of A execs, and probably never will -- even though any one of them has arguably done more harm to more Americans than all the recently-busted Ponzers put together.

The big question is, "What do we do now?" Do we keep listening to the bamboozlers who got us into this mess and seem to think we'll be happy if they throw us a Ken Lay or Bernie Madoff now and then? Or do we think seriously about who this country is for, what our government should and should not do, and what regulations we need to keep things fair?

I have looked at countries that tried to have true communism. Not one of them has succeeded. They all ended up as nasty dictatorships. I have also looked at countries where there is little or no government (Somalia is an obvious example), and have decided that extreme libertarianism *in actual practice* is no better than communism.

We need to come up with a new system. I don't know what it is. But, then, I'm a small-time schlump who lives in a Florida trailer park, not an award-winning academic thinker or cabinet member or economist or any of that. In theory, people who have all kinds of big-time credentials should be coming up with ways to compromise between the worst aspects of human economic behavior (unbridled "profit at all costs" greed) and the best parts of capitalism ("hey, if I work hard to build my company, I'll get rich -- so I'm going to work 20 hour days until I do").

So far, I see zero evidence that our "leaders" have any good ideas. The right-wingers have become pure noise, meant in the sense of "signal to noise ratio," and their extreme leftist counterparts aren't much better.

We need a lot more signal and a lot less noise.

I'll do my part if you'll do yours. We may not agree all the time. Handling disagreements peacefully and reaching useful compromises is a hallmark of democracies and well-run republics, while (theoretical) communist and libertarian countries tend to settle their internal debates with violence.

Let's not go the Somalian or N. Korean directions, okay?

Thank you, fellow Americans, for listening.

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This article also appears at Roblimo.com

Yawn

[pudge]

For many years, starting with Ronald Reagan, all patriots have worked not only to "starve the beast" of government in order to stave off socialism and go back to the time when we all lived like Thomas Jefferson in the full glow of personal responsibility outlined in the Sacred U.S. Constitution, aided only by our slaves ...

Yeah, stopped reading at that point.

Big yawn.

Re:

[Omnifarious]

And here I thought that was funny. :-)

You know, if the people who made all the mistakes actually took the fall I'd be much more of a believer in our system. But somehow, when push comes to shove the responsible parties always seem to be able to make the bad stuff happen to someone else. Something is broken and fishy in a system where that happens.