The Pot And The Kettle

I am really tempted to use the old “Pot calling the kettle black” analogy, but that would only elicit more hate mail accusing me of racism.

There has, however, never been a more fitting illustration of exactly what that well worn phrase describes than Barack Obama’s warning Wall Street executives about economic risk and ruin. I have to admit, if nothing else, this guy has orbs like pumpkins.

There he stood, the leader of the free world and chief architect of a liberal agenda slated to sink the United States into a catastrophic debt level totaling $9 trillion, putting Wall Street on notice that their irresponsible economic policies would no longer be tolerated. “Hear my words” he said, “we will not go back to the days of reckless behavior and unchecked excess at the heart of this crisis where too many were motivated by quick kills and bloated bonuses.”

To be sure, Wall Street cannot be held harmless in the collapse of all things financial. Their financial ingenuity at packaging and repackaging and re-repackaging mortgage backed securities and the credit default swaps attached to those securities certainly played a major part in the complexity of the economic meltdown that unraveled countless 401K’s, shuttered several historic Wall Street firms and imperiled the economies of countries large and small all over the world. But laying the entire blame on Wall Street is like blaming the gas station where you buy your cigarettes for your lung cancer.

It was Democrats in Congress that came up with the idea of creating an entity that would pump capital into the mortgage markets to increase the number of home owners. It was Democrats in Congress that created Fannie Mae and later Freddie Mac to serve that purpose. It was Democrats in Congress that appointed the political hacks to run those entities who lied about their balance sheets to garner the bloated bonuses of which Obama spoke. It was Democrats in Congress under the direction of Bill Clinton that then changed the focus of Fannie and Freddie to include borrowers that had no business getting a mortgage because they had no ability to pay the money back. Wall Street certainly jumped on the bandwagon, but it was Congress and the Democrat leadership that was pulling the wagon down Wall Street hollering “All aboard’.

Obama warned Wall Street that he would not tolerate their shortsighted behavior and that they could not count on him for any further bailouts. This little trip to the woodshed would have been far more appropriate for a UAW union hall in Detroit than the Federal Hall in the heart of Wall Street as the bailout money given to most of these major banks has brought the government coffers some much needed additional revenue in the form of repaid principle with interest.

Obama chose the one year anniversary of the collapse of Lehman Brothers to deliver his dire warning. But rather than using Lehman as an example of how things were broken I view Lehman as an example of how things worked exactly as they were supposed to. When you make bad business decisions you don’t stay in business no matter how big you are. Certainly government can take measures to protect the overall economy but businesses have the right to take risks and if they are on the wrong side of the bet they have the right to fail. That’s how business works.

To think this community activist qua inept economist and his band of Congressional drunken sailors can direct the world’s financial leaders is like thinking Amelia Earhart would make a good air traffic controller. Obama’s economic policies since taking office and plans for additional spending are nothing short of pandemic. He credits the near $1 trillion in supposed stimulus spending for turning the economy around yet unemployment figures and real economic data show his assessment to be far more pipedream than mainstream.

The question is not if the federal government will bailout Wall Street but who will bailout a federal government saddled with a debt load three times the size of their annual budget.

It is the pot calling the kettle black.

That’s not racist. It’s just reality.