Streetwise

Lauren Rudd

Sunday, November 14, 2010

Audacity, Mendacity, Hypocrisy, or perhaps just plain Stupidity

“They get on me and wanna know, Lauren why are you so liberal. Why must you live out what you write? Put yourself in my position. If I write all night long it's a family tradition. Over and over everybody made my prediction. So if I try to right what’s wrong I'm just carryin' on an old family tradition.” Once again my apologies and thanks to Hank Williams, Jr.

Audacity, mendacity, hypocrisy, or perhaps just plain stupidity; I am almost at a loss for words, something that rarely happens. So what brought on this fit of irascibility?

Let’s start with executives of the major financial institutions begging for mercy and stating in no uncertain terms that Wall Street was not responsible for the Great Recession.

Morgan Stanley Chief Executive James Gorman complained about polarizing Anti-Wall Street "rhetoric." He tried to soothe over the public’s ire over the Street's role in the financial crisis by asking for more recovery time.

"The financial system nearly shut down. It's only been two years. You need a little bit of patience..." he said.

Fine, tell that to those on Main Street who are unemployed, hungry, homeless due to foreclosure, and cannot obtain decent medical care. Meanwhile, Wall Street continues to offer up million dollar plus salaries and bonuses. Talk about hypocrisy.

The large banks are also lobbying to kill or emasculate the Dodd-Frank regulatory reform bill because it will rein in some of their lucrative high risk franchises. One particular bone of contention is the “Volcker Rule” on risky bank trading.

The three-part rule curbs proprietary trading, limits involvement with hedge and private equity funds, and caps domestic expansion by the largest banks, all factors that played a major role in the causation of the Great Recession.

And it is not enough that the country seems to be up for grabs by the wealthiest segment of the population. Now China has the audacity to complain bitterly that the Federal Reserve's program to buy up $600 billion of Treasury securities will devastate world trade, their world trade.

"...for the United States to launch a second round of quantitative easing at this time, we feel that it did not recognize its responsibility to stabilize global markets and did not think about the impact of excessive liquidity on emerging markets," Chinese Finance Vice Minister Zhu Guangyao said recently.

China has been robbing the world blind for years with its unduly low exchange rate and Congress has been too pusillanimous to do anything about the problem.

Meanwhile, the fusillade of world criticism directed at the Fed’s action has revolved around the resultant drop in the value of the dollar, meaning our exports are cheaper. In other words, we finally put some points up on the scoreboard.

The selfishness of other countries aimed at protecting their economies is to be expected, including the mendacity of China’s concerns for global economic health, despite their thinly veiled goal of worldwide economic domination.

However, World Bank President Robert Zoellick’s bombshell statement that we should consider gold as a means with which to set foreign exchange rates takes the cake. I throw my hat in the ring with Nobel laureate Paul Krugman and Berkeley economist Brad DeLong when they refer to Robert Zoellick as the “Stupidest Man Alive.”

With the exception of a few recently elected tea party candidates, every developed country has long since rejected using gold to back currency or exchange rates.

Want some frosting on that cake. Sarah Palin decided to weigh in on the Federal Reserve debate, calling for Chairman Ben Bernanke to, "Cease and desist.”

“We shouldn't be playing around with inflation," she said. Excuse me, Ms. Palin, but we are facing deflation, not inflation. Given her academic credentials and expertise in economics, it is not the Fed Chairman who should cease and desist.

There you have it, audacity, mendacity, hypocrisy, or just plain stupidity, you pick. As Paul Krugman says, “The descent into a Dark Age of economics continues.”