Stop Me Before I Vote Again

Morty Zuckerman is a Midas pig of no mean accomplishment, and in info-mart circles -- unlike, say Pinch Sulzberger -- his acquired media majesty rode on funds earned -- or "earned" -- by his own self. Obviously the guy knows his way up and around pretty damn good.

So let's pay attention here when he wades in on the issue of "reforming our domestic financial institutions". Take instinctive populist topic A: bank size.

"The too-big-to-fail firms -- lie at the heart of the current crisis"

Right on! Great, Morty! So now we rustle up a posse, march on down to Wall Street, and hack the fucks down to size, eh?

No? Then let us strive with integrity and honor to gradually reduce them prudently and lawfully by measured steps taken one at a time with all deliberate speed till the major American credit dispensing firms are down to a safe publically manageable set of dimensions -- right?

No again, sez Dr Z:

"Bear in mind that size, for all the crisis it helped to bring, has also greatly benefited the U.S. economy, enabling our big financial firms to compete against others in Europe and Asia."

It's the usual spiel: Folks, don't give in to your impulses and inclinations here -- don't just hack down our giants of credit -- please! We 'umble weebles will just be hurting ourselves if we turn to rash simplistic measures like that -- why that's Jacksonian know-nothingism.

Let Dr Z's kooler head prevail: "systemically important banks" just oughta pay Uncle for their privileges:

"If they benefit from explicit or implicit protection from the government, they should not be able to ride free on the backs of taxpayers"

I know full well it's hardly necessary to persuade my fellow SMBIVA-ites to beware this shark in grouper gear here. But for the swath of astute asshole credulous merit bumpkins out there, who are sure the populist enragés are nothin' but a pack of simple self-defeating oafs -- listen up, my fellow classmates and thinking citizens of all ranks and stations:

Don't spring for this persiflage, I beg you. These are the words of a big-time legitimized thief. Don't imagine he's prepared to endorse some class-neutral, whole-people-preferable answer to the mudsill helots' cry of "call me Huey".

Take a careful squint at this modest proposal of his:

"Risk of failure should be reduced in one of two ways: by increasing capital requirements or by providing the option for the banks to be smaller or less systemically important. This can be effected either by narrowing what businesses they can be in or by making them less interconnected. In the worst-case scenario, the final backstop has to be bankruptcy or dissolution. A new resolution mechanism will have to unwind these too-big-to-fail institutions through a series of well-ordered procedures that do not imperil the whole economy."

That's just what's become MSM boilerplate now, isn't it? You've heard it dripping from every orifice of the gigaheaded monster for weeks now -- boilerplate, rhymes with armour plate.

A very complex set of statutes, interlarded with discretionary regulator controls, settings, and options: looks like reform correction and prohibition, but it's really more like rehabilitaion and rejuvenation.

Zuckie is after all a member in good standing of the Friends of Uncle Hegemonic's Invisible Empire, so he dearly wants to keep The Big Fuck, LLC, goin' strong.

* * * * *

Morty has to nick my alpha nerve too and go on to instinctive populist topic B, The Fed, providing that hallowed peculiar institution with a defense worthy of Czar Nicky's great pal, Daniel Webster:

"The Federal Reserve should remain at the center of these new regulatory efforts. The Fed may be less popular today on Capitol Hill, but there is no other institution — certainly not Congress itself — that has the sophisticated understanding and detailed knowledge to monitor the financial health of the banking firms and that possesses the relative degree of independence from political pressures that the Fed has exhibited over many years.

The Federal Reserve may have fumbled a bit in the evolution of a bubble economy. But once the crisis hit, it was the Federal Reserve, under Ben Bernanke, whose innovative, imaginative response to the crisis literally saved the financial world. Bernanke's Fed found new ways to pump liquidity into the credit markets that were on the verge of a total freeze-up.

This could only have happened because of the Fed's political independence, experience in and understanding of the financial world, and wideranging authority. No one could respond better than the Fed if the next crisis is anywhere near as severe as the last one.

Should Congress undermine the Fed's monetary policy function, we would face a worldwide collapse of confidence in the dollar that would inevitably lead to higher interest rates.

Congress is always playing the blame game, but it would be incredibly irresponsible at this point to undermine the Fed and its capacity to handle the new financial world that we will all be living in."

Oh how long must I endure these gilt-clawed turd-tongued creatures, these religious caterpillars sacrificing our firstborn, and secondborn, and all the otherborn, at the shrine of Hard Money?

This is an old, old story, but jeez, has it ever got legs.