Monday, June 29, 2009

Jackson, Fawcett, and McMahon

McMahon: “Mighty Karnack, here is the answer. ‘Michael Jackson, Farah Fawcett, Ed McMahon, and Mark Sanford.’ Can you give us the question? “

Carson: “Yes I can. Name a bizarre Thriller, an Angel, a Top Banana, and a schmuck.”

Jackson, Fawcett, and McMahon, who died within 48 hours of one another--were superb entertainers, who--thank God--brought more joy and happiness into their fans lives than the pain and heartache associated with the ditzy governor, who garnered so much media last week. Notably Jackson can lay claim to being the King of Pop, as well as the King of Weird, but he was a helluva performer/entertainer. The final scenes of “Thriller” still shake me.

Here’s hoping that MJ’s father, Joe Jackson, gets absolutely nothing from Michael’s estate, which certainly will grow exponentially following his death. It’s my impression that most of Michael’s family played blood suckers to his host role.

And, don’t get me started on another Jackson, Jesse. My mother, who grew up in the early part of this century and whose father sold fruits and vegetables form the back of his horse drawn wagon, used to have a saying that was real life for her.

“He’s like horse s__t. He’s everywhere!”


A GOP long time friend responded to the Mark Sanford story by telling me, “The Republicans need a dose of saltpeter.”

As tempting as it was to agree with that statement, I countered, “Bulls__t. John Edwards, Elliot Spitzer, etc. etc.

MSNBC documents 23 sexual peccadilloes involving Governors, Senators, Congressman, and Mayors, since the Clinton/Lewinsky scandal.

Sanford’s personal stupidity and rambling “confession” has nothing to do with partisan follies. This is just the latest example out and out political egotism.

It is behavior wrought of years of being called, “Governor, Senator, Mr. Chairman, the boss,” and the toadyism that goes with it.

I don’t care how “quiet and mellow” the candidate is, you have to be an egotist to seek public office and when they win, the phony adulation and automatic institutional respect blind some of them.

As I wrote to a few friends, some pols believe that they are invincible and the normal rules don’t apply to them, because they are “_________.” (You fill in the blank!)

If you can believe Governor Sanford, this romantic “spark “ ignited, shortly after he vowed not to take the federal stimulus grants, so desperately needed by the unemployed in South Carolina and the state’s sagging economy.

I am sure that there is a ribald connection somewhere between “stimulus” and “spark,” but—right now—I don’t care to know it.

I can’t counsel a man leaving his wife and children, but if Sanford’s real feelings are anywhere near what he expressed in those steamy emails to “Maria,” his family ties seems barren and he should figure out a way to be with his Argentinean lover.

His very together wife, Jenny Sanford (kudos to your Madam), says she’ll take him back, but doesn’t seem to overly interested in the prospect.

I am betting that he resigns the governorship and heads south.

What others are saying. From Charles Blow of the New York Times:

There are Democratic sex scandals to be sure, but Democrats didn’t build a franchise on holier-than-thou moral rectitude. The Republicans did. They used sexual morality as a weapon and now it’s shooting them in the foot.
Sanford voted to impeach Bill Clinton during the Monica Lewinsky saga. According to the Post and Courier of Charleston, Sanford called Clinton’s behavior “reprehensible” and said, “I think it would be much better for the country and for him personally” to resign. “I come from the business side. ... If you had a chairman or president in the business world facing these allegations, he’d be gone.” Remember that Mr. Sanford?

Russia, China, and Iran

Once again, our “friends,” the Russians and the Chinese, seem to been protecting Iran from world condemnation and censure, while China weighs in with more help for North Korean and its Munchkin dictator.

Some of my conservative friends think a few well placed nukes can solve all of our problems, but I doubt an American-blessed military attack--to take out the two countries nuclear capacity—likely isn’t coming.

But, I sure hope the Obama Administration doesn’t forget the Chinese and Russian behaviors when we truly have a chance to return the favor. We can’t be that powerless.

Sorry, but the Russians never will be anything but thugs. Their national characters hasn’t changed dramatically since the end of World War II. No matter who runs the place, it’s a thieving conniving nation and many of its citizens behave the same way.

(“How do you know a Russian diplomat is lying? You can see his lips move.)

The Chinese—since they own some much of our debt and therefore our country—can truly be meddlesome and manipulative if they chose. We can’t shut them out of our markets or open theirs to our products, and we need them to buy our government IOUs.

But, once or twice, I would like to rub their noses in it.

Go get them, Hillary!

Financial Re-Regulation

The facts are that nobody in the financial regulatory community did a very good job of stopping subprime lending or the complex securities and hedges Wall Street created to "protect" both sides of the deal.

Nobody did very much regulating or whistle blowing, not the Fed, SEC, Treasury, Comptroller, FDIC, OTS, or the GSE regulator (OFHEO/FHFA), the President's economic advisers, the Congressional Budget Office, the two congressional banking and finance committees, or the Joint Economic Committee.

That doesn't mean individuals at those institutions didn't see some problems or even anticipate what would be necessary to stop them before they hit full throttle.

The problem was--and will continue to be, even if a new "systemic risk" agency is created or that portfolio is given to the Fed--how do you get the rest of government to believe you if you see something “bad,” early.

Given all of the conflicting economic and political interests, how do you quickly implement ameliorative policy changes??

Look how hard it's been for this President, when so many sectors, save the diehards in the conservative community, agree that there is need for federal financial relief and economic intervention.

Who will believe any existing or new financial agency of our government, before disaster hits?

Solve that little problem and you’ve found where to put the maximum amount of the nation’s new financial oversight and regulation.

Maloni 6-29-2009

Monday, June 22, 2009

Hockey and Financial Reform

Two things brought me out of my blog-a-lethargy, a hockey game and President Obama’s financial regulatory reform plan.

I am sure that only Henry Gonzalez, my late father, mother, and brother—plus the others hanging out in heaven—remember what I wrote in my final blog of last year.

In my “2009 wishes blog,” among other things, I asked for the Pittsburgh Steelers to win Super Bowl 43 and the Pittsburgh Penguins to win their third Stanley Cup hockey championship. I had hopes for the Steelers, but never thought the Pens could pull it off.

How wrong I was about the latter, as the boys in black and gold, responding to a late season coaching change, beat the defending National Hockey League champion Detroit Red Wings, in a dramatic series, with Pittsburgh’s clincher coming in Detroit in Game 7.

Pittsburgh, the city where I was born, which I still call home despite living for 40 years in the DC area, and which I love, truly is the “City of Champions,” with major sports wins this year in professional football and now hockey. (They also were the "CofC" in 1979, thanks to the Steelers and the baseball Pirates.)

(Current Pittsburgh T-Shirt, based on the foregoing, with depictions of the Super Bowl trophy and the Stanley Cup, it reads, “On ice or grass, we’ll kick your A--!”)

Since I try not to speak ill of the dead, athletically or otherwise, let me note that I haven’t written about the Pittsburgh Pirates baseball team—except in a brief 1979 historical fashion—because they have amassed a record of 16 consecutive losing seasons and, with much futility displayed in the current 2008 campaign, likely will set a major league record of 17 straight losing season.

Financial Regulatory Reform

It’s too much; it’s not enough; try discarding more than you enhance.

The Administration seems to have watered down its own financial regulatory plans and settled on a lot of form but little substance in a scheme which seems to have drawn fire from m many interests, except some of the major banking institutions.


We had a major financial mess, caused in part by lack of strong financial regulations and we still are in the middle of it—as President Obama knows, politically—so the traditional low risk political approach is to proposed something which looks dramatic but in fact isn’t.

Yet, in satisfying critics before the legislative process begins, the Administration—which predictably will make more concessions—may not have solved many of the financial problems we and the world face.

Suffice to say, if the Admin could produce a cadre of strong regulators, they wouldn’t have to change much of the current financial regulatory terrain. But, I guess they can’t, so they throw up some structural changes (not enough) and some rules changes, pray they work, and hope for the best.

Go ahead and codify it, but the Fed already has the authority to assist any company—of any sort—which it deems needs help. It’s “systemic risk tools,” are hardly marginal, either

I already laid out my scheme—which never would pass congressional muster—because it gives too much power to the Fed, which already has a bunch of D’s in the House clamoring to dilute its authority.

These complaining Members should look at the Paul Volcker Fed's history, see the lengths to which Congress and the interest groups went demanding his head, and then internalize why those critics were wrong in the 1980’s and just as wrong now with Ben Bernanke.

Here are some simple (for me to suggest) regulatory reduction suggestions for the Obama Administration and the Hill as they go about financial reform.

You don’t need a Comptroller of the Currency's office just to give the Treasury Secretary redundant say over national bank regulation; you don’t need the OTS, because all of those small banks can be handled by the Fed and the FDIC; you don’t need a Commodity Futures Trading Commission, when you have a Securities Exchange Commission, unless you believe all of those farm interest Members and Senators, who think that ag products securities trading will get lost at the SEC. You don’t need a Home Loan Bank System (apologies to my friends who work in them or represent them), since there is nothing they offer the industry that the Fed’s discount window can’t give those smaller institutions.

While you are at it, swap out state regulation of insurance companies for federal control and if you have any time, energy, and political will, do the same for state charted banks.

Political Advice for the President: People in the business want their pet regulators and people on the Hill want their pet agencies. This is Washington, be skeptical and cynical (at least privately). Any financial interest which likes your current financial re-regulation proposal probably hasn’t been discomfited by it. Break some eggs. That's the only way to make an omelet.

The GSEs

The Obama Administration signaled that it wasn’t going to change—this year--how Fannie Mae and Freddie Mac are being employed, i.e. in a very non-conservation mode, carrying out public policy, with little regard to what the real costs are of running a national secondary mortgage market.

When the two were "nationalized," they were supposed to be run as conservatorships, to allow for their eventual revival as public companies.

Both congressional chambers said last year that they would—in 2009—decide the future role and structure of Fannie and Freddie. They won’t have to now that the Administration suggested it will wait until the FY 2011 Budget (February 2010) to offer GSE policy recommendations.

Speaking of Fannie, there was a sad development involving a Fannie attorney alumni, who the Administration plucked from a law firm to be General Counsel of the Army.

Donald Remy worked at Fannie for about 7 years, between law firm gigs, and he was a well liked colleague, who labored on employment and corporate conduct issues for the com[any.

Somehow, Remy’s official Senate confirmation papers (bio, background, etc. etc.), did not specifically cite his Fannie Mae service. One report said his papers disclosed that he worked at (paraphrasing) “a major international financial services corporation in DC.”

Bottom line, that discrepancy killed his appointment and he withdrew his name.

Nobody who knows him thinks that Donald Remy did that on his own. Someone in the Administration had to bless this description and Remy’s documents.

The issue for me is why all of the subterfuge and camouflage? Why is Fannie Mae service a “scarlet letter,” in the eyes of this White House, which still has managed to find spaces for a few talented ex-Fannies?

Fannie’s real business problems occurred in 2006, under a Republican CEO, who chose to buy billions in destined-to-fail lousy mortgage products and who left the company under pressure, not unlike a lot of the Wall Street and big bank shamed and besmirched, who lost their jobs and shareholder money.

So, some no-nothing GOP Senators and maybe even a Democrat or two would have complained, “Remy worked at Fannie Mae.” So what? He didn’t do the mortgage deals and he didn’t rub shoulders with the private label securitizers or the lenders who sent billions in Alternative A mortgage crap to the Fannie portfolio. And, he didn’t compromise his principles on Fannie’s important housing mission.

This episode’s shame doesn’t rest with Donald Remy.

Note to White House

Forget how much we—as a nation—love President Obama’s persona and his family.

The public is getting anxious. Too much federal money is being committed with too little return. Promises don’t cut unemployment numbers.

Yes, I know it barely has been six months, but reading “chicken salad results” into so many chicken crap economic reports can’t fool the public.

They want jobs and some prospects that the monstrous deficits won’t grow continuously.

Bite the bullet and make hard choices, no matter what some in Congress claim they want.

If you will lead, they will follow, especially if the public agrees with you.

Less rhetoric, please, and more action.

Maloni, 6-22-2009