As has been widely reported, Standard and Poor’s (S&P) credit rating agency is under criminal investigation for the “crime” of rating various financial instruments as low risk (“triple A”) when, in fact, these financial instruments were based on worthless mortgages (worthless as the original home loans were paid to people who had very little chance of ever paying them back).
No doubt S&P did not do their job of rating risk very well. After all S&P is part of a de facto government established cartel of ratings agencies (the vast level of regulation makes very difficult for new companies to compete in the credit rating business) and the government wanted its “affordable housing” policy to continue and part of that was for the original lenders (the banks and other such who had made loans to people who could not pay them back – partly to avoid legal action under the Community Reinvestment Act and partly because the Federal Reserve system was making lots and lots of cheap credit money available and it had to go somewhere) to be able to pass on the loans as securities and other financial products.
Also, of course, S&P (like the other ratings agencies) is paid by the people it is rating (not the people who want to check credit worthiness) so it has a perverted incentive to not look too closely at the financial products it rates – and the mortgage backed financial products (i.e. the pass-the-parcel-before-it-blows-up products) paid very well – especially as financial people (as financial people are apt to do) were using the mortgage based financial products as the basis for pyramid schemes – building vast constructions of debt upon them.
However, every single word of the above could be applied to the larger “Moody’s” Credit Ratings agency. For example, it was the credit rating enterprise that rated the (utterly demented) government backed (and government created) “Fannie Mae” and “Freddie Mac” (the organizations that own most American home loans) as perfectly safe.
Yet Moody’s is not under criminal investigation – why not?
By an odd coincidence S&P downgraded American government debt about a month ago – and (after observing the hostile reaction of the American government) Moody’s chose not to. Could this (as some have claimed) be the latest example of the “Chicago Way” where commercial “friends” get rewarded politically – and “enemies” get punished?
The existing regulations already gave the government (via such agencies as the SEC) vast (and, to a great extent, arbitrary) power. But the passing of “Dodd/Frank” (an Act of Congress named after, arguably, the most corrupt members of the Senate and the House of Representatives at the time) completed the process of turning the American financial system and markets it a political toy – totally under the control of the government. And presently it is a very corrupt government – dominated by Chicago Machine people (from the President down).
However, it is hard to have much sympathy for the financial companies and traders – they are, after all, addicted to government subsidies and have long stopped being anything to do with “free enterprise”.
For example, whenever a vast new government subsidy orgy is announced (such as a new round of funny money creation by the Federal Reserve – or a promise of a vast bailout for European banks) the markets go up not down. The long term is of no interest to most players on the market – they care only about the new money that government creates (from nothing) and their personal chances of getting some of it.
They (most of the financial elite) and the governments (for the other governments are much the same as the American one) are made for each other – it is just a shame that the rest of humanity has to live on the same planet as these people.
“whenever a vast new government subsidy orgy is announced…the markets go up not down”
This must be rational self-interest, though, mustn’t it? As long as subsidies and funny money are there, and as long as the people who get them have an advantage over the people who don’t, can the world be organised any other way?
Yes it can – do not have the subsidies and the funny money injections.
However, even with the world as it is the financial industry people are (mostly – not all of them) short sighted (at best).
Sure “fiscal and monetary easing” provides a short term boost (like an addict getting a fix), but over the longer term it means the addict (the economy) gets worse and worse. Only by going throw the pain of “withdrawal” is there any chance that the addict can be restored to real health – stop being an addict.
But do the financial enterprise (the banks and so on) people tell their clients “do not invest in the market – over the longer term this economy is f…..”.
No they do not – they tell people the exact opposite “we have some problems now – but over the longer term the economy will be fine”.
Either they do not know that nothing is being done to face up to the real problems (either the monetary problems of a capital structure that is totally twisted – or the fiscal problems of out of control Welfare States, all over the Western world).
And if they do not know this then they are NEGLIGENT – as it is obvious that nothing is being done (and it is their job to know these things).
Or they do know and are DELIBERATLY MISLEADING their clients.
Either way these rich “Masters of the Universe” types ought to enjoy the money while they can.
For (whether one approves of this sort of legal action or not) I smell a lot legal cases comming against them when the economy openly crashes.
Please, please, can we stop use of the term The Government as though it were some kind of self-determining entity.
We are really identifying actions of human beings taken through the mechanisms of government.
The Government did not make any decisions with respect to “affordable housing,” people (generally those called “Politicians” or “Activists”) made those decisions, with the support [?] of an electorate.
This is the same electorate (over a time spectrum) that has departed from a defined constitutional structure for the functions of government (that is for what it can be used) to not only support but insist on the three functions that are destroying the fiscal capacity of that government to function at all: Social Security, Medicaid and Medicare.
We have also engrafted: disaster relief, numerous “aid” programs, education involvements, etc.. etc.
But, The Government as an entity did not make those departures, we human beings did.
The fault lies not in our stars, but in the fact that we have too many stars on whom we waste too much adulation and confidence.
Maybe it’s just a “bad day.”
RRS – in part I disagree with you.
For example the book “The State” by Antony De Jasey is very useful (if you have not already done so – I encourage you to read it), and it treats “the state” (the government) as an entity – in much the way you oppose doing.
Yes individual politicians and administrators matter – but not nearly as much as you seem to be saying.
Once the POWER is granted it will be used in much the same way by Republicans or Democrats (British Conservative party members or Labour party members), yes there will be differences – but certain key things will happen.
The key thing is to prevent the POWER going into the hands of the government in the first place (or taking it away if government already has it).
Not obsessing over which individuals happen to be in which government positions.
For example, it was a Republican Administration that did TARP – and it was a Republican Fed Chairman (Alan Greenspan) who created the credit money bubble that led to TARP.
Do not obsess over whether the head of the Federal Reserve is a good man or not – GET RID OF THE FED.
And get rid of the unconstitutional powers that the Executive (and the Legislature) has taken to itself.
Such powers are meant to be abused – that is the reason for them.
One can not use the methods of evil for the service of good – not without terrible danger (the universe is not constructed that way).
And NO it is NOT a matter of which people have the job – not in the end.
Pick up the sword of evil and strap on the armour of evil and you will find yourself doing – EVIL.
Yes (in a way) “the government” is an entity – it matters who has which position in government, but not nearly as much as people think.
TAKE THE POWERS AWAY.
Reduce the POWERS of government to the lesser level they used to be.
That INSTITUTIONAL matters is where human free will (agency) can come in.
Not by giving people unlimited powers and then expecting them to act responsibly (that is not in the nature of things), but in clearly limiting what powers they have in the first place.
Some State Constitutions (partly because they were written after bitter experience) do that better than the (at certain key points slightly loosely worded) Federal Constitution does.
Never trust people to “interpret” things in line with original intentions.
Word things so tightly that they have to do so.
Humans are neither (in the main) either Angels or Devils.
Angels would need no Constitution (and they really could be trusted – so no “stars”).
Devils would violate any Constitution – no matter how clearly worded it was.
But humans are nether – give them an inch and they will take a mile.
But do not give them an inch – and they will take neither an inch or a mile.
They will generally obey a Constitution – as long as there is no wiggle room, no loose wording for the Sword of State to tempt them with.
Remember the Sword of State is evil – it is there for the purposes of force and fear. Sometimes one must use force and fear (to counter greater use of force and fear), but…….
That is why it must be limited – chained.
Yes – just as if it was an “entity” a living beast in its own right (for otherwise it will corrupt anyone who picks it up – no matter how good their intentions were at first).
Yes, I suspect that it must indeed be a “bad day”, RRS. There is nothing inappropriate in talking about “the government” as an entity: it is a perpetual institution, much more than the sum of the individuals who presently (and temporarily) inhabit its corridors of power. And in many respects it is “self-determining”, with legions of faceless bureaucrats, immune to the forces of politics and the vagaries of mere elections, cranking out ream after ream of pointless and stultifying regulations, largely to justify their own existence. The Leviathan answers to no man.
We quite properly refer to “General Electric” or “Goldman Sachs”, for example, knowing full well that each is operated by individuals for the (supposed) benefit of its shareholders. That doesn’t stop us from treating them as discrete entities. Same with “government”.
Laird, RRS,
All organisations exist (or eventually get co-opted ) for the benefit of ‘management’.
The mistake we are making is thinking that elected politicians are ‘management’. The real level of management is below them, invisible, Sir Humphries.
We need to drop the level of officials who are removed when a Govt is turfed out. Pour encourage…
ADE
PM, Laird –
Yes, I have deJasay’s The State on disc.
He is abit younger than I, better intellect and more articulate.
However, on the operation of governments I am sort of an afficionado of Gordon Bulloock.
I repeat line 4 of my comment:
I raise the consideration that it is not so much the nature of the persons operating the government as it is the deviations of the electorate (even if seduced) to which they respond.
The electorate wishes for something more than a constitutionally limited government, without caution in what they wish for.
Paul,
We must accept that even if a Constitution chains the State, the State will seek to add link after link until, over time, the chains are so long as to mean nothing but a dead weight to its citizens.
In that respect, every now and then the Stables must be cleansed and the chains re-forged.
RRS – alas my friend (if I may call you that) you speak the truth about many of the people.
They do call out for the government to “do something” about X, Y, Z.
It chills my blood when they make that call. Although (with the specific examples given above) the voters did not demand them they were invented (and pushed) by the elite. Only after people got used to them did they start to see them as rightfull benefits (even as “rights”).
ADE.
I am indeed no fan of “scientic”, “objective” government.
Let ministers hire their own advisers – and let them be kicked out with the minister (if the election goes against them).
The “cult of the Civil Service” had gone much too far – it started with examinations (replacing the spoils system) and ended up with the administrative structure becomming an end itself.
Especially (in the American case) after Jack Kennedy let unions into the Federal government – only the State of Wisconsin (of the 50 State governments) already had them, but most other States soon followed the Federal lead.
Back in the 1950s officials at least for the most part followed the orders of politicians (and one could kick politicians out) these days the reply to often is “I am sorry but our rules are….” whose rules? OFFICIALS ARE SUPPOSED TO DO AS THEY ARE TOLD. and this was also the time when Acts of Congress were only a few pages long and people actually read them before they read them.
I simply refuse to belive that the 1950s was a different geological age and it is impossible to get back to things like that.
Tim.
Like me you are a libertarian – we both would like to have a government a lot smaller than Federal government was even in 1950s (something rather like what existed in 1886, PERHAPS minus the Civil Service Act, and certainly minus the National Banking Act in my case – to me even the ICC is a serious mistake).
Actually (as far as the Federal government goes) I would like to go all the way back to Martin Van Buren – no national debt and money straight in the Independent Treasury to be spent on a REAL “pay as you go” basis.
Not back to Andrew Jackson – no “trail of tears” or State “pet banks” for me.
Constitutions……..
You take the Jeffersonian line – that they can not be expected to hold over very long periods of time.
Partly (I suspect) that is a LANGUAGE thing.
The meaning of words changes – so people find the original text harder and harder to fully understand.
It is like the difference between the King James version of the Bible and more modern translations.
Yes the King James version is much nicer – better to hear.
But which are you going to give to a person who has never read the Bible before?
Which is going to be less difficult for him or her to UNDERSTAND?
If the “gender neutral language” could be ditched I would have no hesitation in giving someone the New Revised Standard Version rather than the King James.
Because the ordinary person would UNDERSTAND the modern langauge with less difficulty. He or she might go on the the King James version later (once they understood what the words meant) – that is another matter.
Also no document is perfect.
Let us leave the question of modernizing language for a moment.
Does the commandment really say “not kill” NO it actually says (in the Hebrew) not “murder” (a very different thing).
The King James version is just wrong at this point – it is a mistake in translation.
And there are a few places where the original text of the United States Constitution is just WRONG as well (the Amendments were not all mistakes).
It is not just a language thing.
At the risk of overload:
May I suggest a 2004 column by Samuel Brittan:
There is No Such Thing as The State
It can still be found on his website, under Articles, by Date, 2004@ Samuelbrittan.co.uk
RSS,
I read the article your refer to and the author’s social welfarism is made clear by statements like:
He declares there is no “theory of just property rights” and then from an apparent community property basis declares that there is no such thing as the state. I’ll leave it to others to work out how one can have forced redistribution without something taking the role we recognize as “the state“.
“The state” is imbued with an institutional will of its own that transcends any individual actors. Institutions will survive and prosper when their institutional perpetuation is best served by those acting in them. Institutions whose actors prioritize their chartered goals rather than the institutions’ own perpetuation will fade. At the end of the day, the institutions that are best served, rather than the institutions that best serve, are the ones that survive. This institutional will can work even in defiance of the interests of its own actors to say nothing of those outside of the institution. I believe this is the point Laird was making.
Midwesterner:
It is precisely because governments are mechanisms, operated by people, and can be adapted in their operations to various social functions (including the performance of obligations once held personal and civil), that Brittan’s assertions can be made.
I have forgotten whether it was Mr. Pierce or Paul Marks who “corrected” my use of “mechanism” a couple years back, preferring “Institution.” I stick with mechanism.
You did cause me to re-check my understanding of “imbued,” with respect to “institutional will.” That is a misperception. Institutions are subsumed into the mechanisms of governments. Nowhere is that more patent than in our very necessary military organizations.
Yes, within the subsumed institutions, the objectives of those individuals carrying out the functions of the institution (Public Education, e.g.) are the “will” you refer to. We see this in the non-elected, self-perpetuating bureaus local, state and federal – but, it is always driven by human action, human motivation human will operating a mechanism.
Guns don’t kill people can be repeated as governments don’t plunder people. But, people get killed with guns and plundered through governments every day.
If we don’t stop talking and acting as though The Government is the same as a person, we will never remove the shield that hides the real perpetrators of malfunctions and malfeasance.
RRS has a point.
RRS “has a point” only to the extent that he says we should blame specific individuals for specific governmental actions where possible. Of course that’s correct, and of course we all do it. In the US we castigate the head of the EPA for boneheaded environmental regulations, we rail against the Attorney General for travesties like “Operation Gunrunner” (for which he, personally, should go to jail), and naturally we blame Obama for everything. That’s nothing new.* But that’s not the same thing as asserting that we should not refer to “the government” as a discrete entity, which was his original point. It is a discrete entity, separate from and larger than the individuals which comprise it, and we properly so refer to it.
* It’s also a central element of Saul Alinsky’s “Rules for Radicals”. His Rule 11 says “Pick the target, freeze it, personalize it, polarize it. Don’t try to attack abstract corporations or bureaucracies. Identify a responsible individual. Ignore attempts to shift or spread the blame.”
Alinsky had a point;-P As do you and Mid. However, the fact remains that your approach has not been working very well over the years. I think the reason is that it leads to apathy, with the average citizen thinking that “you can’t beat The System”. RRS is right in that The System is a human one, and as such ultimately depends on individuals, both those who actively support it and those who feel powerless in its face and therefore just play along, or altogether withdraw (to the extent they are allowed to do so by that same System). I am not saying that we should go all Alinsky on the individual statists (unlike the leftists, I do not think that the end justifies all means), but I do think that RSS’s point is worth further consideration, with the hope that we can develop a better-balanced (and, consequently, more effective) approach to reaching our goals.
Laird, et al.
My point is not that the mechanism which is government is not a “discrete” entity. Of course it is.
My point is to call attention to the effects of reification, such as seems to be inferred from the idea that governments can be imbued with an institutional will of their own.
Governments are used as instruments of plunder, to limit choices, to limit freedoms (randomly or selectively), to transfer obligations, etc.,etc. – all to achieve the objectives of those humans who directly or indirectly cause those uses to be made (no smoking).
While historically, other societies have dealt with these effects, from time to time, by assassinations (still happens) we are not there yet.
As the solidifying examples in Russia and elsewhere indicate, that result can develop.
That is not to say that I subscribe to the Dicta of Carlyle.
Laird:
It is not so important to assign “blame” or even responsibility to the individuals (or groups) that cause specific actions through governments as it is to determine how and why they are able to, and do so.
That is the principle of identification of the forces affecting the functions of governments.