We’ve talked about old Dick before. Dick was one of the leading advocates for deregulation, removing all controls on banks and private equity. Dick also has a long running love affair with any taxation strategy that creates wealth concentration at the top of the economy and he’s long been an big advocate of tax cuts as an economic driver. It’s that last point that’s really curious since Dick is a former Economics teacher at UNT who apparently doesn’t really understand the Laffer Curve or where we are on it. You see, at current rates cutting taxes has no growth effect on the economy. It does, however, concentrate income and wealth to the top of the economy. It’s exactly what you’d want to do if you want to turn America in a third world country. The teabaggers Dick’s trying to lead don’t understand that which is a shame because they’re essentially supporting people whose ideological goal is to make them poor.
Dick talks about his disdain for W and the Republicans who enabled his out of control spending. What’s funny is that Dick himself deserves as much blame as W since he
1) Voted for the horrendous 2001 tax cuts on the wealthy that immediately shifted the Federal Government from surplus to deficit.
2) Supported the Iraq war which has ballooned the deficits as much, if not more, than W’s tax cuts on the wealthy.
3) Fully supported the elimination of banking regulation, voted for Phil Gramm’s bill to keep derivatives entirely from regulation. These decisions led directly to the breakdown of the entire financial services sector and the necessity of TARP.
While Dick won’t ever admit to any of this or take ownership of it, he will blame others for the problems he created. Like continuing the lie that Fannie Mae and the Community Reinvestment Act were responsible for the housing collapse. The reality is that the deregulation Dick championed led directly to the collapse and the subsequent bailout he now criticizes, by allowing banks to make poor decisions… and then sticking Fannie Mae with the end product. It’s like someone eating a bad meal, knowing it will cause diarrhea, then emptying out on the floor and then criticizing the people who are cleaning up their mess for not doing it the way they would have.
This interview was a sloppy kiss to a man who can be (charitably) called a congenital liar (I should know, I checked that with my attorney). Frankly, I’m waiting for the reporter with enough guts to actually call Armey out on his lies, exaggerations and balls out stupidity.
Surely both political parties can now join in taxing the “carry” part of the compensation of hedge fund managers as if it was more constructively earned in, say, cab driving.
Loeb wrote…
In his letter to investors, he took issue with a number of Washington initiatives, including the Credit Card Act of 2009 and a proposed “enterprise tax” that would be levied on hedge fund managers who sell their firms.
“So long as our leaders tell us that we must trust them to regulate and redistribute our way back to prosperity, we will not break out of this economic quagmire,” Mr. Loeb wrote.
“Perhaps our leaders will awaken to the fact that free market capitalism is the best system to allocate resources and create innovation, growth and jobs,” he continued. “Perhaps too, a cloven-hoofed, bristly haired mammal will become airborne and the rosette-like marking of a certain breed of ferocious feline will become altered. In other words, we are not holding our breath.”
Critics of Wall Street will rightfully complain that it was the actions of free market capitalists that prompted a push for regulation. On that point, Mr. Loeb does not entirely disagree.
“Many people see the collapse of the subprime markets, along with the failure and subsequent rescue of many banks, as failures of capitalism rather than a result of a vile stew of inept management, unaccountable boards of directors and overmatched regulators not just asleep, but comatose, at the proverbial switch,” he wrote. “It is easy to see why so many people have concluded that the entire system is rigged.”
I’ve heard that redistribution argument for decades and frankly it makes Loeb look stupid since what has happened since 1980 was government mandated redistribution of wealth that concentrated it (and income) at the top of the economic pyramid where it has not been used either productively or efficiently. Such a stupid and ill-considered comment should be setting off alarm bells with Loeb’s investors since absent conservative taxation policies, that distortive concentration would not have occurred. It’s quite frightening that a man who manages $3.4 billion would not understand that.
Free market capitalism can’t survive in an environment where so much of the national income and wealth are concentrated in the hands of so few who are using it so unproductively. That being said, what the President and Democrats have proposed is more aligned to fixing deficit spending and long term debt than correcting income inequality. Loeb’s criticism is based, almost entirely it appears, on his own narrow self-interest rather than any real concern for long term economic prospects. That’s especially clear when you consider that Loeb seems to desire a return to the status quo ante articulus.
