Crony capitalism

Conservative columnist Michael Taube recently criticized me and other fiscal conservatives for expressing some sympathy for the Occupy Wall St. movement and its Toronto offshoot.

He wrote in the Ottawa Citizen he was puzzled why Finance Minister Jim Flaherty, Bank of Canada Governor Mark Carney (now heading the G20 Financial Stability Fund), the Fraser Institute’s Mark Milke and Conrad Black, have not been totally dismissive of the “Occupy” protesters.

Speaking for myself, here’s why:

I support the protesters for correctly identifying Wall St. as the scene of a massive heist of global wealth, jobs and homes that started with the subprime mortgage securities crisis of 2008 and continues to this day.

As a result, tens of millions of people world-wide have lost trillions of dollars in their pensions and life savings — including in Canada — along with their jobs and homes.

Most are hard-working, law-abiding, citizens, who pay their taxes, never signed for mortgages they couldn’t afford (given they didn’t expect to lose their jobs in a global economic meltdown) and have never demonstrated in the streets or occupied a park.

As a fiscal conservative, I believe in free markets and the rule of law, not fraud markets and crony capitalism, in which profits are privatized and losses socialized.

That’s what happened in the 2008 global economic crash, where the worst damage wasn’t caused by the subprime scandal itself, but by the global credit freeze it led to because banks no longer trusted each other’s assets.

That not one senior Wall St. executive has been charged, let alone imprisoned, as a result of their companies’ misrepresenting the true nature of the subprime mortgage securities they peddled to institutional investors globally is a disgrace.

The fact they bet against their own investors without telling them — and indeed, privately mocked them — is a disgrace.

The fact credit rating agencies in the pay of Wall St. graded junk subprime mortgage securities as Triple A safe investments, is a disgrace.

The fact most Republican and Democratic politicians don’t want any criminal trials arising out of this scandal is a disgrace.

The reason they don’t want them is that would shine a light on the billions of dollars they accepted in campaign contributions and other favours from the financial services sector, in return for gutting the regulatory safeguards on that industry which led to the ’08 crash.

The fact these banks were bailed out of the financial destruction they caused with hundreds of billions of taxpayers’ dollars is a disgrace.

The fact they are being allowed to walk away from what they did by paying insignificant corporate fines (compared to profits), negotiated by an emasculated U.S. Securities and Exchange Commission, with no one being held personally responsible for what happened, or even having to admit wrongdoing — is a disgrace.

Worst of all, because the Wall St. banks that survived ’08 are now bigger than ever — so big the government decreed they were “too big to fail” via the bailout — there is every reason to believe they will do what they did again.

Not only have they escaped any “moral hazard” for their actions, they had their huge bonuses paid for by taxpayers.

The fact Democrats and Republicans are blaming each other — Democrats by accusing Republicans of caving into Wall St., Republicans by accusing Democrats of forcing banks to extend mortgages to people who couldn’t pay them back — is another disgrace.

The reality is both parties and their presidential candidates, happily allowed themselves to be bought by the U.S. financial services sector in the years leading up to the crash.

The reality is Fannie Mae and Freddie Mac — the two U.S. government-sponsored mortgage underwriting agencies — walked away with paying minor fines (relative to their assets) for massive accounting manipulation.

And the fact is fraud is fraud, whether it’s done by a welfare queen or a bank. But when it’s done by a bank, it does a lot more damage.

Yes, the Occupy protesters may be naïve, misguided, troublemaking, freeloading, commies and hippies, in cahoots with professional left-wing agitators and public sector unions.

I certainly don’t want them occupying a public park in downtown Toronto all winter.

But they didn’t cause the global economic devastation we’ve been experiencing since 08.

And the real disgrace is the people who did, got away with it.

Origin
Source: Toronto Sun