Saturday, November 7, 2009
Charlie Gasparino: CNBC (and WSJ) Jackass of the Day 11/6/09 (Part 3)
Perhaps the most disingenuous claim that Charlie makes in his WSJ piece is that the United States government was a “co-conspirator” with “the greed merchants.” As I listened to him on his CNBC spots, it seemed clear to me that he viewed the government as bearing primary responsibility as if Wall Street had been duped into generating all those toxic loans and securities. This of course plays perfectly into the conservative thesis that the solution to the problem is to have the government do less to regulate activities on Wall Street. Like the rest of Charlie’s theory, any relationship to reality is coincidental at best.
The government was not a co-conspirator with the greed merchants. The government was the hireling of the greed merchants. It wasn’t some member of Congress who came up with the idea that the country would be better off if Glass-Steagall Act were repealed and then went out to persuade banks to engage in securities underwriting. It was the banks who lobbied the government. It wasn’t the SEC that talked the investment banks into adopting irrationally risky capital ratios. It was the investment banks led by Hank Paulson of Goldman Sachs who lobbied Christopher Cox for the rule change that allowed them to take on more risk.
The government failed not because it induced Wall Street to do things it did not want it to do. It failed because it did whatever Wall Street wanted it to do. The government was the flunky in this conspiracy, not the mastermind. The government was the night watchman who gets a few bucks to leave the door unlocked while the thieves rifle the vault. Like all good flunkies, Charlie figures it should take the fall while the masterminds waltz away with the loot.