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Monday, October 17, 2011

Paul Krugman, "Losing Their Immunity": Wall Street Responsible for "Destroying the World Economy Thing"

Paul Krugman's latest New York Times op-ed, "Losing Their Immunity" (http://www.nytimes.com/2011/10/17/opinion/krugman-wall-street-loses-its-immunity.html?_r=1&hp), left me feeling ill. The conclusion of his opinion piece:

"Money talks in American politics, and what the financial industry’s money has been saying lately is that it will punish any politician who dares to criticize that industry’s behavior, no matter how gently — as evidenced by the way Wall Street money has now abandoned President Obama in favor of Mitt Romney. And this explains the industry’s shock over recent events.

You see, until a few weeks ago it seemed as if Wall Street had effectively bribed and bullied our political system into forgetting about that whole drawing lavish paychecks while destroying the world economy thing. Then, all of a sudden, some people insisted on bringing the subject up again.

And their outrage has found resonance with millions of Americans. No wonder Wall Street is whining."

Let me begin by observing for the umpteenth time that I am a fervent opponent of financial industry excesses. As known to all who read this blog, I favor reinstatement of Glass-Steagall and the Uptick Rule, and I am dismayed by the compensation packages drawn by the top executives of banks and other financial service companies. Moreover, should Congress decide to increase taxes imposed upon US billionaires, I am not opposed, although this will barely make a dent in America's debt or budget deficit. Having said that . . .

Krugman fails to mention that Steve Jobs was said to be worth $7 billion at his death (see: http://www.forbes.com/forbes-400/list/). Did that make him an evil person? Quite the contrary. His talents were responsible for the employment of tens of thousands of Americans and kept the US at the fore of the information technology industry. Apple, the company for which Jobs is famous, has market capital of some $400 billion, and its shares comprise part of the retirement portfolios of many Americans. Do we separate Jobs from "Wall Street"?

Is Bill Gates, said to be worth $59 billion and one of America's leading philanthropists, also a greedy monster? Microsoft has a market cap of some $230 billion. Does Gates have no nexus to "Wall Street"?

Does Warren Buffett's wealth, estimated at $39 billion, also dictate that Americans erect barricades and shut down lower Manhattan? Is Buffett, famous for his stock picks, not part of "Wall Street"?

Whereas Krugman is quick to claim that "Wall Street" is now abandoning Obama in favor of Romney, where is there mention in his op-ed of George Soros, said to be worth $22 billion, who is known for currency speculation and was labeled "The Man Who Broke the Bank of England" (see: http://www.theatlantic.com/magazine/archive/1993/07/finance-the-unifying-theme/5148/). Would Krugman have us believe that Soros, who is famous for championing liberal "activist" organizations, is separate and distinct from "Wall Street"?

Unlike Krugman, I do not perceive "Wall Street" as a monolithic embodiment of evil, nor do I blame "Wall Street" for "destroying the world economy thing." Have there been abuses which deserve correction? Absolutely, but this does not require trashing America's economic underpinnings and gambling upon a nihilistic utopian vision being promoted by the radical left.

"Wall Street"? I just returned from a visit to New York, where I met with financial institutions and discussed various projects intended to significantly improve the quality of human life. Sure, "Wall Street," as long as I can remember, has always demanded a share of the profits in exchange for staking millions of dollars in ventures which inevitably entail risk. I welcome this trade-off.

Is there a better system? Would I have it any other way? Is it preferable that the federal government decide whether to fund projects such as Solyndra? Answer: No, to all three questions.

1 comment:

  1. Last week, I concluded that Krugman is a profoundly dishonest person (or someone with mental problems - not my area of expertise) and left his blog.
    I am very suspicious of demagogic identification of 1% with Wall Streeters and of the entire focus on Wall Street. Actually the wealthiest Americans are not Wall Streeters. Gates isn't a Wall Streeter; the Waltons (together probably the richest family) are not Wall Streeters, etc. One would expect the left to be interested in the Waltons, for example, notorious for labor abuses, but no, no interest in their creation of wealth. Demagogues and hypocrites.
    I disagree with your praising of Jobs. He was creating jobs in China - nice, but thank you.

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