Dodd-Frank, Smoot-Hawley, McChrystal and Lady Gaga
#609 June 27, 2010
COLUMBUS: Congress passed a financial reform bill last Friday at 5 in the morning. That’s an odd time for a Congressman to be doing anything, except maybe staggering home.
When I read that the purpose of the bill is "to put a damper on wild and reckless spending of other people’s money by the people in charge," I figured, ‘That’s great.’ And now that we’ve got a damper on Congress, maybe we can also regulate Wall Street.
This new Wall Street and Bank regulation bill is named the Dodd-Frank bill because those two birds had more to do with the financial crisis than anyone else in Congress. Senator Dodd got himself a cheap mortgage to buy a second home he couldn’t afford, and Congressman Frank insisted that Fannie Mae and Freddie Mac give loans to families that couldn’t pay the interest, driving Fannie and Freddie to bankruptcy. So now we’ve got financial reform that covers every bank in the country. Except Fannie and Freddie.
Dodd and Frank are hoping this bill doesn’t do for them what the Smoot-Hawley tariff bill exactly 80 years ago did for the reputation of those two Republicans. The Smoot-Hawley Tariff Act practically shut down world trade and did more than any other single action to turn a 1929 Wall Street crash into the Great Depression.
The G-20 meeting is in Toronto, and you know what that means. Protesters. This year the protesters are mainly hoodlums who could not afford airfare to the World Cup. Half of them are protesting because they think G20 is a fruity sports drink that tastes sour. They couldn’t identify the 20 countries on a map if their life depended on it.
Canada is spending close to a billion dollars on police for G-20. At $50 million per country maybe this is one meeting that ought to be held over the internet. President Obama likes Twitter, so maybe they should have a #G20chat.
Canada has arrested 500 protesters. Back in 1917 I had a suggestion on what to do with young folks who were marching in protest to the War. "Put them in the Army. This marching is just the training our soldiers get before being sent to fight in Europe." (Paraphrased)
Obama told the other 19 countries he wants them to buy more American products because that’s the only way he can cut the deficit in half. These other countries aren’t quite sure they want the job of balancing Obama’s budget, although Russia did agree to eat more chicken.
General McChrystal got fired. He probably deserved it. Not for disagreeing with the President, but for treating a Rolling Stone writer like a journalist. The magazine cover has a picture of a mostly naked woman who calls herself Lady Gaga. (Some folks think she should leave off the last a.) In a shopping mall today I saw a sign advertising "Bikinis half off". I wanted to go in the store and ask, "Which half is off?" Well, last week Lady Gaga showed up at Yankee Stadium dressed like she had come directly from that store.
Historic quotes from Will Rogers:
"We sure had a great July Fourth, especially after we picked up our morning papers and found that Congress had adjourned the night of the third... This country has come to feel the same when Congress is in session as we do when the baby gets hold of a hammer. It's just a question of how much damage he can do with it before you can take it away from him. Well, in eighteen months these babies have left a record of devastation." DT # 1230, July 4, 1930 (shortly after passing Smoot-Hawley)