The Objective Standard Blog

Friday, July 23, 2010

Did Obama Ask the SEC to Assault Goldman Sachs?

Posted by Daniel Wahl at 11:07 am

In a previous blog post I showed how the Securities and Exchange Commission has wielded power, assaulted businesses, and ignored fraud. Now it appears that the SEC colluded with the Obama administration to assault Goldman Sachs, boost the administration’s chances of passing the financial “reform” bill, and line the coffers of Obama’s reelection campaign. Quoting the Washington Examiner:

It seemed a little odd last week when the Securities and Exchange Commission settled its lawsuit against Goldman Sachs within two hours of Senate passage of the Democrats’ Dodd-Frank financial reform bill. After all, who could ask for a more perfect backdrop than a successful prosecution of the investment colossus of Wall Street and a prime mover in the economic crisis of 2008? But this one looks stranger still considering that the SEC action was announced on April 15 of this year, only a week before the legislation was brought before the Senate, thus neatly bookending debate on the proposal. And it gets even stranger. On the same April 15, President Obama’s campaign organization, Organizing for America, purchased a Google ad directing people who Googled “Goldman Sachs SEC” to donate money at my.barackobama.com.

Whether or not evidence of collusion in this case is conclusive, the sad fact is that there is no reason to put such corruption past the SEC or this administration. Fortunately, as John David Lewis has argued, the brazen evil of Obama and company is providing a kind of political clarity that could lead Americans to see that our alternatives really are capitalism or statism.

Related Articles:

• Obama’s Atomic Bomb: The Ideological Clarity of the Democratic Agenda
• Review of David Einhorn’s Fooling Some of the People All the Time

Related Post:

• Does the SEC Care about Fraud?
• The Little Dictators

Posted in: Business and Economics, Individual Rights and Law

Tuesday, July 20, 2010

Government Intervention: It’s Not Just Bad for Business

Posted by Daniel Wahl at 12:28 am

In a recent article in Investor’s Business Daily, Thomas Sowell explains why Obama’s economic policies are bad for the economy:

The current issue of Bloomberg Businessweek has a feature article about businesses that are just holding on to huge sums of money. They say, for example, that the pharmaceutical company Pfizer is holding on to $26 billion. If so, there should not be any great mystery as to why they don’t invest it.

With the Obama administration being on an anti-business kick, boasting of putting their foot on some business’ neck, and the president talking about putting his foot on another part of the anatomy, with Congress coming up with more and more red tape, more mandates and more heavy-handed interventions in businesses, would you risk $26 billion that you might not even be able to get back, much less make any money on the deal?

Of course you wouldn’t. No rational person would. And this phenomenon of businesses hording cash is rampant today for this very reason. Just as Pfizer does not want to risk its cash on investments, so other businesses don’t want to risk theirs on new employees or equipment or innovations or branches. As Sowell points out so clearly, Obama’s economic policies are thwarting the economy.

But Sowell misses the more important point: the moral factor. The fundamental offense for which Obama’s economic policies should be condemned is their violation of businessmen’s moral right to keep and use their wealth and property as they see fit. The crucial point to be made is that for a government to put its boot on a businessman’s neck or to “kick [his] ass” is profoundly immoral. Unfortunately, the worst Sowell and most other “defenders” of capitalism can say about our increasingly enslaved society is that such policies are bad for business.

It is time for Americans to realize that if we want to save this country from the likes of Obama (and Bush for that matter), we must argue not merely for the economic superiority of capitalism, but also, and more fundamentally, for the moral propriety of capitalism.

Related Articles:

• Capitalism and the Moral High Ground
• The California Coastal Commission: A Case Study in Government Assault on Property Rights

Related Posts:

• The Little Dictators
• There’s Nothing “Bright” About the Stimulus Bill
• Capitalism: The Only Moral System

Posted in: Business and Economics, Individual Rights and Law

Friday, June 18, 2010

There’s Nothing “Bright” About the Stimulus Bill

Posted by Daniel Wahl at 1:16 pm

Forbes recently published an argument against the stimulus bill, focusing on its so-called “dark side.”

A little over a year ago the Obama administration passed a staggering $787 billion stimulus package designed to rescue the economy. More than half of that money has now been spent, and the economy is still just creaking along. But now people are realizing that there is a dark side to this spending orgy. It has to end, and then we have to pay the bill.

Yes, Americans are learning that they will have to pay the bill. And hopefully they are learning that government spending is no way to stimulate the economy. But what Americans most desperately need to learn is that such spending packages are not merely economic atrocities but also, and more fundamentally, moral atrocities.

This spending bill, like all welfare legislation, amounts to legalized theft and forced redistribution of wealth. It forces producers—such as those who design and manufacture sofas, and those who design and manufacture video games—to hand over a large portion of their earnings to those who refuse to work and choose instead to lounge around on sofas and play video games all day.

This is utterly immoral. It is a gross violation of individual rights. Thus it is profoundly un-American. Americans who care about individual rights should condemn such legislation not merely as economically untenable, but also—and more importantly—as morally unacceptable. Only then will we begin to reverse the statist trend that is leading this once-free country ever closer to tyranny.

Related Article:

• Capitalism and the Moral High Ground

Related Posts:

• Government Intervention: It’s Not Just Bad for Business
• Capitalism: The Only Moral System
• The Little Dictators

Image: http://www.flickr.com/photos/astrowoosie/120750647/

Posted in: Business and Economics, Individual Rights and Law

Thursday, May 20, 2010

Does the SEC Care about Fraud?

Posted by Daniel Wahl at 4:41 pm

Anyone concerned with freedom in the financial markets should read this new, internal review by the SEC, in which the Commission admits that it:

• failed to “take appropriate action” related to fraud at Allied Capital, a politically-connected company staffed with former SEC employees;
• did not visit Allied’s offices a single time during their “investigation”—“even though they were located just blocks from the SEC”;
• never investigated “whether Allied was a Ponzi scheme, because of how it financed its dividends” (using proceeds raised from the sale of stock to uninformed investors);
• “inexplicably” deleted the work papers from an examination of Allied in which an SEC employee expressed concerns that the company was engaging in a Ponzi scheme;
• vigorously investigated David Einhorn—the man who exposed Allied’s fraud —both “after Allied met with [SEC] officials” and “without any evidence of wrongdoing” on the part of Einhorn;
• gave clearance to an SEC employee who “supervised the investigation against Einhorn” to register as a lobbyist for Allied immediately after leaving the agency;
• took no action when Allied admitted to the SEC that one of the company’s “agents” had engaged in “illegally obtaining Einhorn’s phone records”;
• concluded soon after the investigation that Einhorn was not guilty of violating federal securities laws but never told him what his status was with respect to the law and whether he was still being investigated “despite his request for such notification.”

The SEC is under new management and, according to The Washington Post, has promised “to fix the problems.” But since then it has:

• sucker-punched Goldman Sachs with charges of fraud for letting sophisticated investors pick what they want to buy from a list of what other investors want to sell;
• continued with the fraud charges against Goldman despite a 3-2 split along party lines among the five commissioners;
• timed the charges to coincide with the push for financial legislation by Obama.

The SEC has not been and is not concerned with prosecuting fraud. Since its inception, the SEC has pursued not justice, but power, and it has used that power to support its political masters. The case against Goldman is more of the same.

Related Article:

• Review of David Einhorn’s Fooling Some of the People All the Time

Related Post:

• Did Obama Ask the SEC to Assault Goldman Sachs?

Image: http://www.flickr.com/photos/jsmoorman/2298671281/

Posted in: Business and Economics, Individual Rights and Law