There is a long 20^th century history of Wall Street protests in America.  After all, Wall Street is the financial center of the country. Today, we’re in a financial crisis so Wall Street (or its financial center equivalent in other cities) is the logical place to protest, right?

Actually, we think it’s a poor second to Lafayette Park across from the White House — where the current crisis was hatched and nurtured.  No, this isn’t an anti Obama screed.  His predecessors (several of them) are far more to blame for the current economic disarray in which we find ourselves, although we think his proposed remedies are anything but remedial.

“Occupy Wall Street” and “Wall Street Greed” are great memes.  They are highly memorable and easily passed on as a rallying cry. Unsurprisingly, President Obama and the left has sought to adopt them.  Of course, the protestors are an outgrowth of the wider sense of entitlement many young people have developed (including quotas disguised under the term “diversity”).  As George Will stated in his column in The Washington Post on October 13, 2011:

“Demands posted in [Occupy Wall Street’s] name include a ‘guaranteed living wage income regardless of employment’; a $20‑an‑hour minimum wage (above the $16.00 entry wage the UAW just negotiated with GM); ending ‘the fossil fuel economy’; ‘open borders’ so ‘anyone can travel anywhere to work and live’; $1 trillion dollars for infrastructure; $1 trillion dollars for ‘ecological restoration’; ‘free college education’, and forgiveness of ‘all debt on the entire planet.”

But abuses by Wall Street are an affect, not the cause of the current economic disarray. As anyone who has read our essays knows, we carry no brief for Wall Street excesses or those of the various Government Sponsored Enterprises (GSE’s) that are the real culprits. But Wall Street was simply the vehicle by which the White House, Congress, the Fed and the Washington bureaucracy carried out very ill advised objectives. As is well known by now, the seeds of our current discontent were sowed a quarter century ago when President Jimmy Carter signed the Community Reinvestment Act (CRA).  This legislation and the regulatory policies that it set in motion may have been well intentioned, but as history teaches, roads paved merely with good intentions often lead where no one wants to go.

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There’s a new Wall Street Sheriff in town. Her name is Elizabeth Warren and she’s President Obama’s pick to help set up (control) a brand new Big Government agency called the Bureau of Consumer Financial Protection. (Just so you know, this new agency was the brainchild of the corrupt Fannie and Freddie twins, Barney Frank and Chris Dodd. The laughably named Dodd-Frank Wall Street Reform and Consumer Protection Act effectively gives the federal government control of our nation’s financial sector. (Think of it as Obamacare for Wall Street, the stock market, and credit cards.)

Obama and his allies have been big promoters of Warren, who is the left-wing patron saint of so-called consumer protection.

There’s only one problem. In the dubious tradition of Obama czars, Warren is a leftist radical with a “penchant for provocative statements” and has very little chance of being confirmed by even a Democratic Senate. How anti-business? Well, in a blog she crafted for TPMCafe.com in 2005, Warren said: “…big corporate interests, led by the consumer finance industry, are devouring families and spitting out the bones.”

And that’s just one example.

Even Democrat Senator Chris Dodd, Chairman of the Senate Banking Committee, sees the writing on the wall on a Warren appointment. Dodd has publicly stated that he doubts Warren could muster the votes for confirmation. Many others in Congress agree, even if they won’t say it publicly.

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As if the work of disgraced Sen. Chris Dodd (D-CT) on the housing and banking sectors, and subsequently therefore the larger economy weren’t enough already, I see this heads-up from the American Policy Center passed along to me. Apparently we suffer from too little government, not enough planning, and a few “Sustainability” offices are needed to more gently minister to how you and your families lead your lives and can better do so to meet the state’s desires.

This is not unexpected. As I wrote about this creeping “livability” agenda in Power Grab: How Obama’s Green Policies Will Steal Your Freedom and Bankrupt America:

Team Obama’s efforts to “fundamentally transform” the United States of America” were immediate, widespread, and sweeping. The National Journal featured a debate about “livability” after someone there noticed that “the Obama administration and leading congressional Democrats appear to be making the creation of ‘livable communities’…a central transportation policy goal.” However, the “livability” and “happiness” indexes fetishized by the Left are code for coerced inconvenience, discomfort, or merely sameness, trading off individuals’ liberties to remove distinctions brought about by unfair quirks such as differences in ingenuity or hard work. But our superiors know that these differences are really only the product of a world in which the successful have won life’s lottery, so the spoils need to be spread around a bit.

Livability and the like serve as the rationale for all manner of intrusions. Innovation Newsbriefs in October 2009 noted that it was “the Administration’s intent to increase the federal role in shaping local development patterns and influencing travel behavior. ‘Smart growth’ planning and shifting more automobile travel to public transportation have been long-standing goals of progressive planners and assorted anti-sprawl activists, but these goals may now become a matter of federal policy under the Administration’s ‘livability’ initiative.”

Secretary of Transportation Ray LaHood did Obama no favors by candidly defending against inquiries about this, stressing that it’s no big deal. In fact, he pointed out, “about everything we do around here is government intrusion in peoples’ lives.” (House Majority Whip James Clyburn helpfully added soon thereafter, “There’s nothing in the Constitution that says that the federal government has anything to do with most of the stuff we do.” (What a team.) (citations omitted)

Dodd’s bill isn’t going anywhere, one would assume. Except that it has been reported out for full Senate consideration by the Banking Committee he still somehow chairs. It is one lame-duck tantrum away from being reality (two, if you count the House where the numbers make most things possible until January).

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I pose this question seriously, not as a physiologist, but as an economic historian. I am provoked to raise the question by an advertisement that Amazon sent me recently, calling my attention a book titled Can Capitalism Survive? Creative Destruction and the Future of the Global Economy. Seeing this sales pitch, my immediate reaction was my usual sadly amused reply to such a question: Can capitalism survive? What an odd question! Assuming that capitalism ever existed at all, it has been dead for at least a century.

At first glance, I did not recognize that the book being advertised is one for which, in a sense, I am responsible. It turns out that the “new” book is only an old (portion of a) book, now adorned by a new subtitle and two new introductory paragraphs by the Newsweek columnist Robert J. Samuelson. If I reveal that the book’s author is Joseph A. Schumpeter, many readers will recognize it immediately as Part II of that famous economist’s best-known work Capitalism, Socialism and Democracy, first published in 1942, with subsequent editions in 1947 and 1950.

The new book’s front cover has a blurb from Fortune that declares Schumpeter to have been “the most influential economist of the twentieth century . . . a major prophet.” The back cover has an embarrassingly superficial blurb by publisher Steve Forbes that, among other things, describes Schumpeter as “the twentieth century’s foremost economist.”

I do not consider Schumpeter entitled to be called the most influential economist of the past century―that distinction unfortunately belongs to John Maynard Keynes, and Milton Friedman surely deserves the second place. As for Schumpeter’s rank as a prophet or as the intellectually foremost economist, I would place him below Ludwig von Mises and F. A. Hayek.

Nevertheless, Schumpeter was unquestionably one of the most important economists of his day, and his work has continued for good reason to attract readers ever since his death in 1950.

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The progressive Democrats in power must believe that the citizens of this country are absolute morons, either that or they haven’t read a newspaper in two years and don’t realize that George Bush is no longer president. The Democratic party plans on retaining their change message for their 2010. Their new tag line is “vote for us, or its back to the bad old economic policies of George Bush. That’s right Barack Obama and his progressive majority are going to campaign as if they were all still in kindergarten “Its not my fault….blame Bush.”

Not only is that approach childish, but it belies the truth.  Allow me to suggest that the policies of Barney Frank had more to do with the bursting of the housing bubble, the resulting bank crisis and the “great recession,” than the policies of George Bush. Led by Frank the Democratic party brought down the banking industry by forcing banks to give loans to people who couldn’t afford them, then he   blunted the Republican attempts to regulate the industry

Frank aggressively fought reform efforts by the Bush administration. He told The New York Times on Sept. 11, 2003, Fannie Mae and Freddie Mac’s problems were “exaggerated.” Exaggerated? Thanks to Fannie and Freddie the housing market collapsed and we fell into this “great recession.”

“These two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis,” Frank Opined to the Times. “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

The 10/8/03  Washington Post reported that Frank opposed giving the Bush administration the approval rights over banking business activities that “could pose risk to the taxpayers.” He worried the Treasury Department “would sacrifice activities that are good for consumers in the name of lowering the companies’ market risks.”

In the video below Frank sits in a 9/10/03 House Financial Services Committee hearing and says Fannie and Freddie are sound, and there is no housing disaster coming.

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The President is expected to sign the financial overhaul bill today, yet he might want to pause a moment to consider not signing this bill because of the potentially unconstitutional racial and gender preference provisions buried in the massive bill.

Four members of the U.S. Commission on Civil Rights have signed a letter complaining that Section 324 of the conference report titled the “Dodd-Frank Wall Street Reform and Consumer Protection Act” “includes a section on race and gender that even those who pride themselves on keeping up with national affairs may have failed to notice.” This provision, which can be found on page 172 of the conference report, may lead to unconstitutional racial and gender preferences being forced on financial institutions covered by the new law.

As the Becker-Posner blog argues, this over 2000-page long bill is “complex, disorderly, politically motivated, and not well thought out reaction to the financial crisis that erupted beginning with the panic of the fall of 2008.” One of the critiques leveled by Gary Becker and Richard Posner is that “the bill adds regulations and rules about many activities that had little or nothing to do with the crisis.” It is clear that the lack of racial and gender preferences had nothing to do with the financial meltdown in the fall of 2008. Section 342 is a special interest provision that has no relevance to financial services reform and may lead to this law being deemed unconstitutional by the courts.

The letter from members of the U.S. Commission on Civil Rights was signed by Commissioners Peter Kirsanow, Ashley Taylor, Gail Heriot, and Todd Gaziano. In the letter these experts in civil rights law explain that the legislation “requires that each covered agency establish an ‘Office of Minority and Women Inclusion’ responsible for ‘all matters of the agency relating to diversity in management, employment, and business activities.’” This law will empower federal bureaucrats to issue rules and regulations governing the financial sector of the economy, if those businesses are doing any work for the federal government.

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On Wednesday, if all goes as planned, President Barack Obama will sign the financial-reform bill crafted by Senator Chris Dodd of Connecticut and Congressman Barney Frank of Massachusetts, sponsored by the Democratic Party in both houses, and supported by three Republican Senators – Scott Brown of Massachusetts and Susan Collins and Olympia Snowe of Maine. When the bill is signed, we will be told, as we have repeatedly been told in the last few months, that the measures included within it will prevent future financial crises of the sort that we have suffered from over the last two years.

By now, of course, most Americans have become skeptical of such claims. We were to told that the so-called “stimulus” bill would bring unemployment down, and we learned that its main function was to reward constituencies favoring the party in power. It increased dramatically the salaries of those within the federal civil service, it expanded that civil service massively, and it enabled the state governments and the localities to continue to pay those who worked within the public sector at those levels. Similar lies were told during the healthcare debate. We were told that no one would lose his coverage, that no one would be forced to acquire health insurance, that the cost curve would be bent downward. It is proper to ask whether we are being lied to now and whether Senators Brown, Collins, and Snowe have sold us down the river.

The answer depends – to a considerable degree – on what were the causes of the recent financial crisis. Was it caused by a market failure? If so, is it likely that governmental regulation will prevent such failures in the future? These are the claims advanced by Paul Krugman and the like; these are the claims put forward by President Obama, Senator Dodd, and Congressman Frank. And, on the face of it, they would appear to be true. There was, after all, a bubble in the real estate market. Goldman Sachs and the like marketed junk bonds, made up of mortgages, on a gigantic scale and managed to get for them a triple-A rating from S&P and from Moody’s, and insurance against default was purchased from outfits like AIG that had no idea of the risks involved. The Securities and Exchange Commission and the Federal Reserve could and should have intervened.

But one must be cautious about calling what happened “a case of market failure,” for the real-estate market was not a free market. One could, of course, reply that no market is a genuinely free market. The “free market” is an ideal type. It does not exist in reality. The government interferes and gives shape to virtually every market through taxation, regulation, and laws detailing how contracts are to be enforced.

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From today’s Politico:

An all-night House-Senate conference committee delivered President Barack Obama and Democrats a far-reaching and historic achievement Friday – a realignment of the rules that govern Wall Street and a second victory toward Obama’s legislative triple crown.

The compromise bill now goes to the House and Senate for approval. For all the messiness of the process, financial reform and March’s health care reform win cumulatively make clear Obama and Democrats are governing in consequential ways – and once again Friday, without a single Republican vote. The results make clear the argument over Obama is no longer whether he’s effective or not, but whether voters will like the results.

The agreement came at 5:39 a.m., after 20 straight hours of work in the committee, a marathon session that tested the negotiating skills, patience and endurance of several dozen lawmakers tasked with reconciling two competing approaches to reining in Wall Street.

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Congress and the Administration have now picked their targets for regulatory reform following the long-inflating credit bubble that finally burst in 2008, the aftermath of which still suppresses economic activity here in America as well as the rest of the world.

Commercial banks, investment banks, financial products, derivatives, etc. . . .all were placed in the crosshairs of the big legislative and regulatory guns in Washington and, perhaps, well they should be. One trophy-size culprit, however, seems nowhere to be found on the target lists of the Congressional or Administration grenadiers. Fannie Mae, that publically traded, congressionally created, private enterprise (GSE or government-sponsored enterprise in beltway speak) seems to have totally escaped the purview of the government blame seekers.  Small wonder.

Of all of the bailouts handed over to private banks, investment firms, automobile companies and insurance companies, none have been more outrageous than the bailouts provided to Fannie Mae and it’s first cousin, Freddie Mac.  Although the government very belatedly seized these GSEs, taxpayer money continues to be provided to these hybrid public‑private creations right under our collective noses each and every day.  The Congressional pontificators have focused attention on every miscreant except the one they (or their predecessors) created and which they continue to feed.

Everyone agrees that the overheated housing market created a pricing bubble that was destined, like the San Andreas Fault or Eyjafjalljokull, the volcanic mountain in Iceland, to experience a major blow-up.

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Yesterday, Scott Brown caved, and the Senate passed its “financial reform.” That story is at the top of every news web site.

But what the establishment media didn’t tell you – unless you waded through the details in a select few news articles or saw this fairly balanced short article in the Washington Post – is that Wednesday evening,  hours after the first cloture vote failed and hours after  I informed BigGovernment.com readers about an effort by Sen. David Vitter (R-La.), to narrow the scope of what I have been calling the Obama-Dodd-Frank-Everything’s A Bank Bill, Democrats blinked and Vitter’s amendment passed without objection by voice vote.

Vitter’s amendment to the so-called “Restoring American Financial Stability Act” gives a precise meaning to the term “financial company” – changing the definition from Dodd’s original language of “substantially engaged in activities in the United States that are financial in nature” to that of the much stricter “predominantly engaged.” And his amendment precisely defines “predominantly engaged” as a business that makes no less than 85 percent of its revenue from financial activities.

As a result of Vitter’s measure that passed during the brief 24-hour period of most of the GOP standing together in opposition (along with Democrats Maria Cantwell and Russ Feingold for their own reasons), a very important change was made.

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By now, readers of BigGovernment.com know that that the Democrats “Wall Street Bank” bill, which may get a final vote as early as this week, will reach far beyond Wall Street and ensnare businesses not typically thought of as “banks.” Stories here by this author and others have laid bare provisions of the Obama-Dodd-Frank-Everything’s-A-Bank bill that broadly define a “financial company” as any business “substantially engaged” or “significantly engaged”  in financial activities. And if your business happens to fall in such a category, it could be subject to a bailout “assessment” tax to bail out a high rolling financial firm, intrusive regulation by a banking agency or the new Bureau of Consumer Financial Protection, or even outright nationalization if the troika of the Federal Reserve, Treasury Secretary, and Federal Deposit Insurance Corporation decide your firm is a threat to “financial stability.”

Trouble is, though its audience is growing by leaps and bounds every day, this site is still at the point in which not every American relies on it for essential political info. And because Republicans have done a mediocre job of explaining how far this bill would reach, and the establishment media largely has no interest in explaining these facts, supporters of Senate Banking Committee Chairman Chris Dodd’s “Restoring American Financial Stability Act” have been able to get away with saying, “If you’re against this bill, you’re against reform of Wall Street.”

Or at least, that was the case until a couple days ago. That’s when Sen. David Vitter (R-La.) introduced an amendment with a straightforward message: A bill that claims to be about fostering transparency on Wall Street should itself be transparent in its objective and not sneak regulation on Main Street manufacturers and retailers.  Call it (and I just did) the Not-Everything’s-A-Bank Amendment.

Vitter has distinguished himself with his dedicated efforts in fighting for real financial reform.  He co-sponsored with self-proclaimed (but not necessarily sole) Senate socialist Bernie Sanders (I-Vt.)a bipartisan amendment similar to the measure in the House bill to have the Government Accountability Office audit the Federal Reserve. When Sanders and others went for the Obama administration”compromise” of a one-time audit of a limited part of the Fed’s operation, Vitter carried the flag of Fed transparency.

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Thanks to provisions buried within the Obama/Dodd financial deform bill, your personal information — from ATM withdrawals to loans — will now be collected by the federal government with no protections to your personal privacy.

The legislation creates another federal bureaucracy — the Consumer Financial Protection Bureau (CFPB) that is nothing more than a systematic government invasion of your personal finances of every consumer creating a financial fingerprint for the government to watch over.

Dodd’s bill deputizes the CFPB to act as a new federal watchdog agency to collect consumers’ personal financial information and transactions including records from Automatic Teller Machines from any financial institution or firm.

Don’t believe us — read the bill.

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Sen. Bob Bennett suffered a stunning defeat in his quest for re-election Saturday.  And as the Senate considers the Obama/Dodd financial ‘reform’ bill, other Senators should be asking themselves if they want to be next.

Bennett, representing the most conservative state in the country, was defeated for a number of reasons but none more obvious that his steadfast support for the Wall Street Bailout.  When it came to his vote for the first Bush bailout, Bennett didn’t give an inch defending it all the way to his concession speech.

As political prognosticators read the tea leaves, a CNN interview with a local Tea Party activist perhaps provides the most insightful commentary.  It could not be clearer, grass roots conservatives see support of bailouts as anathema to free market principles; period.  Politicians have now been formally warned — support for bailouts of corporations and big banks is political suicide.

The real question is — is anyone listening.  The Senate is considering a bailout bill that makes the TARP vote that defeated Sen. Bennett look like chump change.  Sen. Corker, Collins and Grassley pay close attention here.  The Obama/Dodd bill is a bailout bill that favors big banks and Wall Street over Main Street.  It’s no different than supporting TARP — just more expensive and now contains a laundry list of intrusive Big Brother provisions like a national database that tracks citizens’ deposits and withdrawals.

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There are many bad things contained in Chris Dodd’s Restoring American Financial Stability Act,” the financial regulatory “reform” bill that after filibustering for three days — with the assistance of Nebraska Democrat Ben Nelson — Republicans agreed to let come to the floor for amendment and debate.

Among its horrors are a massive new consumer agency with the power to track virtually every financial transaction to share with other big agencies like the IRS, onerous new restrictions on angel investors and venture capital that greatly delay funding promising startup firms, proxy access provisions that would federalize state incorporation laws and empower unions and other progressive shareholders to wage director campaigns at the company and other shareholders’ expense, and no attempted reform of the government-sponsored enterprises Fannie Mae and Freddie Mac at the center of the financial mess.

But the most destructive portions of the bill — the one that would in my judgment go beyond even Obamacare in making the American free enterprise system unrecognizable — has been little discussed even by critics of this bill. To put it bluntly but absolutely accurately, this bill sets up a mechanism for the Treasury Secretary, the Federal Reserve, and the Federal Deposit Insurance Corporation to nationalize virtually any business they deem to be a threat to American “financial stability.”

I include myself among these critics not focusing on this issue and I apologize for not informing readers sooner, but I wanted to be sure the bill would do what I suspected it would do. Many of the bill provisions are interconnected, and what can seem like a mild measure by itself becomes lethal when combined with another sections. As Financial Times columnist Gillian Tett recently wrote: “Buried in [the bill’s] pages are numerous clauses and sub-clauses, many of which have been largely ignored until now (partly because they strike most non-financiers as pretty dull). Yet, the fine print could turn out to be crucial in the coming years.”

And after reading and rereading the “fine print” of this 1336-page piece of legislation (which will grow by hundreds more pages when amendments are added), it is clear that the bill’s “orderly liquidation authority” would facilitate outright government seizure of a wide variety of firms with very limited judicial review.

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News reports last week suggested that 130 companies that cater to main street concerns — like Harley Davidson — had hired lobbyists because of the impact the financial reform legislation will have on their business. The regulatory boondoggle will affect almost every entity that caters to middle class America — from car dealers to dentists. That’s right dentists.

News from Washington is that the group representing America’s dentists are now in freakout mode over the bill. Most dentists offer payment plans. If Johnny need braces, dentists offer payment plans that help the middle class afford them. If the financial reform bill is enacted into law, the federal government would regulate the plans.

This is a prime example of how the legislation — while proporting to regulate Wall Street will actually regulate Main Street.

Yet Citi and Goldman Sachs are supporting the legislation supposedly aimed at them. If Wall Street wants this bill and Main Street is harmed by the bill, how exactly is this Wall Street reform?

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The Democrats’ health care takeover didn’t stop with ObamaCare and there are some hurtful provisions in the new financial regulation bill Americans should know about if they have any expensive dental procedures coming up.

For millions of American teenagers braces are an embarrassing rite of passage, and for their parents, a tremendous cost. According to bracesinfo.com, the average prices of straightening a teenager’s teeth is about $5,400. In South Carolina, where themedian family income is approximately $45,000, the cost of braces for one child can total more than 10 percent of a parent’s gross income for the year.

Because braces are so expensive, many families pay for them through an installment agreement with their dentist. This is often a fair and affordable option that allows families to avoid charging the expense on their credit card and paying double-digit interest rates.

But the Democrats in Washington are clamping down on health care payment plans with the banking bill. As the bill is currently written, health care providers, or any other business that allows customers to make payments in more than four installments or assesses any kind of late fees, will be treated under the same terms as AIG, Freddie Mac and Goldman Sachs. A new Consumer Financial Protection Agency, housed in the Federal Reserve, will regulate their transactions and could subject them to further regulatory burden.

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Wall street wants it, unions want it, Obama wants it and now you can add at least one Communist filmmaker to the list of supporters of CFPA.

As thousands of union members converged on Wall Street last week,  they were joined in solidarity by Kevin Keating. Keating, a cinematographer on the 1976 movie “Harlan County, U.S.A” and an unabashed communist joined his union brethren in demanding the Obama-Dodd financial takeover bill that would give unions greater ability to takeover the governing boards of companies and drain resources into their own coffers.

Senator Christopher Dodd (D-Conn) is at the center of negotiations shaping a bill that he promises will add transparency to the complicated, furtive world of financial derivatives, but he cannot remember how much he paid for his house on 10 waterfront acres in Ireland.  No wonder confidence in government’s competence continues to erode.

Dodd’s office told me early last year that he paid $127,000 in 2002 for his co-owner’s 2/3 interest in a house on 10 waterfront acres on the island of Inishnee in a tony region of western Ireland.  The next month he told reporters at The Hartford Courant that since he’d also paid off his co-owner’s portion of their joint mortgage on the property, he really paid about $50,000 more than what he’d said.

A month after that revision, Dodd told Newsweek that he’d paid $207,000 for the 2/3 interest in the property that he’d purchased with a Kansas City real estate developer William Kessinger in 1994.  The 5 term senator provided no details on what sort of Jethro Bodine ciphering he did to get that number.

None of those figures matches the amount Dodd reported to Irish authorities when he purchased Kessinger’s interest in the property.

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