Republicans Must Abandon Wall Street

Updated 2/1/2009

Wall Street has abandoned free enterprise and free markets and become a government controlled scam! If you doubt that just consider the following.

Do you understand Wall Street's new invention called "derivatives"? I originally planned to include a short description here but finally came to the conclusion that no description that helped non-experts to understand them could be useful in the space I could allocate in the article. It would take a book.

Do you understand Wall Street's new invention called "credit default swaps"? I originally planned to include a short description here but finally came to the conclusion that no description that helped non-experts to understand them could be useful in the space I could allocate in the article. It would take a book.

Do you understand Wall Street's new invention called "collateralized mortgage obligations"? I originally planned to include a short description here but finally came to the conclusion that no description that helped non-experts to understand them could be useful in the space I could allocate in the article. It would take a book.

The reason is all are intended to be so confusing that no one can follow them. You have to take them on trust ... and that allows Wall Street to scam the gullible.

Ditto for the consequences of the Robert Rubin (Clinton's Treasury Secretary) requested legal changes during the 90's breaking down the barriers between insurance, securities and banks to create globally competitive "investment banks", the abandonment of the"up-tick" rules on shorting stocks and bonds, the oppressive reporting requirements and imbecilic "mark-to-market" requirements of Sarbanes-Oxley, and the measurement rules added by Clinton to the "Community re-investment act" which allowed for criminalizing any bank for failure to lend to any minority (sold under the rubric of "affordable housing" while in reality it vastly increased home prices so no one could aford them until the bubble burst).

All of these complex and confusing changes to our business world were welcomed by Wall Street but did nothing to increase the creation of national wealth. All of these rule changes allowed Wall Street to maximize their profits through confusing and useless scams using leveraged profits that no one could understand. I just found a new term to actually describe this phenomenon. It is called crony capitalism, "an allegedly capitalist economy in which success in business depends on close relationships between businessmen and government officials", in reality socialism. [From a post by George Walton in The New Republic]

Again and again for the last 20 years Wall Street has become more and more the agent of government goals with government rules that allowed for huge profits based on leveraged profits that no one could intelligently predict. It stopped being the process by which new businesses were created to aid in the wealth creation market process of satisfying the needs of people. The end result? The Internet bubble, the housing bubble, the stock market bubble, the banking industry bubble. Each bubble has collapsed in time, as bubbles always have. Each time government has bailed out the failures. Each time the government solution has been greater and greater control of our economy. And each of these controls has resulted in less and less wealth creation capability within our nation while government raised taxes on the productive elements of society. Wall Street though keeps finding ways to take all the profits for themselves by creating complex scams. However they are protected by crony capitalism.

The Republican Party has not yet accepted that Wall Street is no longer a part of the Free Market engine of our nation. Wall Street today is dominated by global monetary manipulators like George Soros and Bernie Madoff, socialists and Democrats all, who see themselves as partners with government bureaucrats in the allocation of our nation's wealth, crony capialists. In most cases, they make sure that the wealth goes to them by government rules that fatten the pockets corporate 'managers' rather than to those who create the wealth. Or they simply break the law as Soros recommends and Madoff did whenever the rules are inconvenient. Wall Street has become the enemy of free markets and thus the enemy of those in the Republican Party who believe in free enterprise and the necessary 'rule of law' which underpins ethical implementation of this philosophy.

Capitalism has been co-opted by Wall Street as a term that describes their government dictated control of business and thus it no longer represents free markets. In fact capitalism today really means crony capitalism, the opposite of free markets. That is why Wall Street endorses the monetary policy insanity of the current Fed zero interest rates on loans to banks. No better proof exists that monetary policy has become idiocy than the idea of the Fed loaning our money at zero rates as a necessary monetary policy to support the government abuse of fiscal policy. Or even better, loaning money that does not even exist to the Federal Government by buying Treasury Notes. Does no one understand this is government fraud on the people that has always existed when the government simply "prints" money? What else is this?

Unless and until the Republican Party stops defending this new evil in the world, a socialism co-opted Wall Street, we will not be able to return to being a party that represents individual freedom. Individual freedom cannot exist where Wall Street ends competition and fattens profits for huge non competitive conglomerates any more that it can exist where government is doing the same to pick winners and losers. Free markets require real competition, not the "mergers and acquisitions" based elimination of competition that has become the primary focus of Wall Street. Combined with its creation of scam instruments like derivatives, CDS and the laundry list above as its secondary focus to con people out of their money, Wall Street has ceased being free enterprise. Wall Street is simply a scam.

In response to Wall Street abandoning free markets, Republicans must abandon the 'crony capitalism' of Wall Street!