Monday, November 17, 2008

Lame Duck Mischief

A few posts back I attributed the damage done by the Credit Default Swaps to the Bush Administration. Wikipedia says attributes CDFs to the bipartisan Commodity Futures Modernization Act of 2000 which was past during a lame duck session and signed by President Bill Clinton.

The CMFA essentially turned the entire United States into an Enron style risk management scheme. Undoubtedly, it gave the the departing members of the Clinton Administration extremely cushy jobs in the financial sector.

The TARP appears to be the same type of lame duck mischieviousness ... that is a bipartisan effort to heap the American taxpayers with debt in order to land lucrative campaign contributions for those going into office and jobs with generous salaries for those on the way out.

Reach Upward pointed out an article on the WSJ. The quote sticking in my mind about the NY Financial sector: "This is 212,000 people making nearly $80 billion in wages and salaries last year..." That is an average salary of $378k/year!

They weren't producing wealth. The financial sector of late did little more than fill balloons with hot air to watch them blow up in other people's faces.

I wish the economic conversation was about removing programs like CFMA and nake short selling, rather than this game of serving up ladles of government slop in the form of TARP. Regardless, lame duck sessions should not be the time for introducing major new initiatives.

2 comments:

Reach Upward said...

TARP = attempting to reward incompetence and failure.

y-intercept said...

With TARP, Bush is simply laying the precedents for greater federal meddling in all areas of business.

It is really actually a bit funny. The left rose to power by manufacturing hatred of Bush, and will then spend the next 8 years using all of the supposed misdeeds of Bush in their effort to expand the power of the central government.