Thursday, August 18, 2011

Linkages of the Day - Been a While

It's been some time since I've posted some linkages, perhaps my news article reading has slipped or perhaps the quality, relevance, and originality of the text in what I've been reading has become a bit droll.

Never fear, Matt Taibbi is here with your daily (or monthly I suppose given his Rolling Stone output) riot fuel:

Regulation isn't a panacea. The SEC could have placed federal agents on every corner of lower Manhattan throughout the past decade, and it might not have put a dent in the massive wave of corruption and fraud that left the economy in flames three years ago. And even if SEC staffers from top to bottom had been fully committed to rooting out financial corruption, the agency would still have been seriously hampered by a lack of resources that often forces it to abandon promising cases due to a shortage of manpower. "It's always a triage," is how one SEC veteran puts it. "And it's worse now."

But we're equally in the dark about another hypothetical. Forget about what might have been if the SEC had followed up in earnest on all of those lost MUIs. What if even a handful of them had turned into real cases? How many investors might have been saved from crushing losses if Lehman Brothers had been forced to reveal its shady accounting way back in 2002? Might the need for taxpayer bailouts have been lessened had fraud cases against Citigroup and Bank of America been pursued in 2005 and 2007? And would the U.S. government have doubled down on its bailout of AIG if it had known that some of the firm's executives were suspected of insider trading in September 2008?

It goes without saying that no ordinary law-enforcement agency would willingly destroy its own evidence. In fact, when it comes to garden-variety crooks, more and more police agencies are catching criminals with the aid of large and well-maintained databases. "Street-level law enforcement is increasingly data-driven," says Bill Laufer, a criminology professor at the University of Pennsylvania. "For a host of reasons, though, we are starved for good data on both white-collar and corporate crime. So the idea that we would take the little data we do have and shred it, without a legal requirement to do so, calls for a very creative explanation."

At what point do we start looking at the deeper issue, the DNA behind an economy literally eating itself as it starves for food? Why that would be the very corporate charters that require forever growth, inevitably putting all laws and in many cases morality and humanity in the way of that growth. Often good people just doing their job. This is why until the late 1800's corporate charters were revoked after their one particular purpose was complete, such as building a railroad. "But that would put people on the street!" And by retaining those companies seeking forever growth, an impossibility, we're doomed to perpetual overshoot and thus collapse. The only thing preventing said overshoot and collapse? Corruption! Hooray!

Same issue but from Mish:

to which he adds:
I rather suspect the SEC has safeguarded with perfect care the files on Martha Stewart, two-bit Joe, and blogger Bob.
Safe to say. Is this a good time to remind readers of Mussolini's definition of fascism? That corporatism equals government? My brain is a little hazy on this, but wasn't it Jefferson who said something to the effect of "to control a country, don't give me an army, but let me control the banks." He was obviously saying this as a warning sign, not a prescription.

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He conceded that it will take at least a year for housing prices and sales to start rising, a key marker of an improved economy.
GDit. Leave these inane platitudes to the likes of Michelle Bachmann and her rather socialist claims of pricing gas at $2/gallon (beware the false populist). The housing market isn't going up any time soon, let alone in a year. Nor would we want it to again falsely rise just so people can skim off the top. Shouldn't the real issue be whether 1) housing is affordable, not that it is going up arbitrarily, and 2) that the homes are located in places where they will actually last? Where the residents have some real choice in terms of housing type and transportation? Or do we think this quasi-monopoly is a good thing in the market place?

Housing prices go up when wages go up. Do we see that happening any time soon? Not until people have purpose, skills, opportunity, and some sort of safety net to mitigate the risk of putting their life on the line starting businesses. Lest we all get caught in the corporate meat grinder that in order to grow absent demand, just cuts cost, ie wages. Word.

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THE United States spends more than $100 billion annually to subsidize homeowners. Renters get no breaks; homeowners get tons of them. Their mortgage rates are subsidized through the government-sponsored enterprises Fannie Mae and Freddie Mac; they get a big deduction on federal income taxes for mortgage interest payments and for state and local property taxes; and they even get favored treatment on capital gains from the sales of primary residences.

Americans love the idea of a house and a white picket fence. The government encourages ownership through housing subsidies, believing that it stabilizes communities. Owners see their homes as their share of the American dream, and their best way to save money.

But according to the Congressional Joint Committee on Taxation, these tax breaks add up to $700 billion in lost government revenue over the five-year period through 2014. As the government struggles to come up with spending cuts and revenue sources, housing subsidies are an obvious place to look.

Is it just me or are there an inordinate amount of places to cut the budget/increase revenue in the most logical yet apparently sacred of places? The idea of the white picket fence is a pretty sweet dream until it means having a meth lab as a neighbor, but the marketing spiel doesn't allow the gaze to stray outside of the frame. Remember, when homes are built as "product" each other one ruins the experience. But, when they're built with community in mind, each new one increases the amenity, experience, and value.

Now if you'll forgive me I want to go read my history books about Jesus and George Washington fighting the Nazis so we can have a garage full of BMWs.