Stupid Genius

Wakemom is a middle aged woman with grown children, a rock hard body, very fit, and to my knowledge no advanced education in economics.   She sells boats for a living.   Last week she left this on our blog, I saw homes in my neighborhood sell to people I knew couldn’t afford them why didn’t the banks know? The greedy mortgage brokers and lenders knew and laughed all the way to the bank with their incomes and record profits. Who’s laughing now?

Attila emigrated from Hungary nearly thirty years ago.   When he got off the plane with one suitcase, twenty bucks in his pocket and his wife by his side carrying his one year old son, he didn’t speak a word of English.   He did have a skill, however, and found a job as a mold builder.   After many years of hard work and scraping together money for a down payment, he purchased a modest house in South Orange County.   When the housing market started going bananas a couple of years ago Attila complained, Jim, these illegal aliens are buying houses in my neighborhood.   Where are they getting the money to buy a $600,000.00 house?   They’ve got junky cars parked in the street, they don’t water the grass, no money down bullsh…

While Wakemom and Attila regretfully smile as houses in their neighborhoods go into foreclosure, McCain and Obama are bragging how they will use our tax dollars to save these homes from default because they want to insure our homes won’t depreciate in value.   Gee thanks, as if arbitrarily propping up the value of housing is going to do us any good.   Some of us just might like to move and purchase a new residence for its real value, not for some government induced and exaggerated price.

While regular people with common sense have marveled at the stupendous absurdity of our current financial debacle, Alan Greenspan has been up on Capitol Hill fielding questions from Congress.   At least we assembled all the idiots in one room!

Greenspan’s most notable quotation from the interrogation was this, I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.

He then went on to say the crisis exposed a flaw in his strong market based ideology.

What a twit!   When all else fails in the face of tough questions by committed bureaucrats, blame the free-market.   If you want them to go easy on you, just acknowledge your capitalist ignorance.  

If Greenspan had any guts at all he would have declared that irresponsible government example is what tainted our laissez-fare system encouraging those men with low character at the head of many private financial institutions to take what they could get, their organizations be damned.

Our government consistently spends more than it takes in and encourages our citizens to do the same.   Spend, spend, spend, let’s drive our economy!   And what good little soldiers we are, people have been borrowing on their homes to fuel their gluttonous consumption, and those who can’t borrow on homes have done so on credit cards.   Americans now owe about a trillion dollars due credit cards.

And the governments answer?   Give’em a stimulus check and encourage them to spend more.

Harvard educated Barack Obama wants to build the economy from the bottom up.   How does that work?   Take from those who produce and give it to those who don’t?

We cannot spend our way out of this financial disaster.   To pay down our debt, at some point we are going to have to produce and save more than we use.  

How long could we keep our homes and feed our kids if we spent $2,000.00 more each month than we took in?   How long would our credit cards and our equity loans last?  

Home budgets are pretty much the same as government budgets.   Overspending will guarantee ruin.   The difference is, when government fails we are all responsible and even those who lived responsible and frugal lives will be on the hook.

It’s nice to have geniuses around government, they can figure out complicated equations, they can explain how the universe began and is continually expanding, they can analyze and postulate and even predict once in a while, but what they can’t seem to do very well are the day to day chores around which life most revolves.

Greenspan ran the Fed for nearly twenty years and probably did more good than bad, but in his lofty position he somehow became disconnected from our cultural foundation.   His comment to Congress suggests our free-market underpinnings are somehow deficient, and he has now invited in bureaucrats to once again skewer this free-market system and grab for themselves more regulatory control.  

As if Congress is our agent of cure.   This is after all the body which gave us The Financial Modernization Act of 1999 which was the de-regulatory mechanism which most experts blame for our current situation.  

We don’t need geniuses in government; we need regular people with common sense who have a good moral foundation and fiscal sagacity.   America would be better off with Wakemom Secretary of the Treasury and Attila Chairman of the Fed.


Copyright 2008 Jim Pontillo

7 thoughts on “Stupid Genius

  1. Why are you treating Greenspan like he insulted your mother? He said that the free market is flawed. He did not say it should be abandoned or suggest a superior alternative. I mean, what could this crisis be except the result of a flaw in the free market? The free market responded to a demand for housing among the incredible and poor and others who would not qualify for a real mortgage, and it responded by providing a ton of shaky loans. It should be obvious to ANYONE by now that the free market is not perfect; it should be obvious to EVERYONE by now that companies act in their own self interests before those of others (unless those people’s interests support those of the company).

    That you reject Greenspan’s expertise because of one common sense comment that disagrees with your ideology is ridiculous. As you yourself said, he did more good than bad over twenty years, and yet you do not chastise him because of a mistake that lead to this financial crisis, but because of ideological reactionism? Of course, it makes perfect sense that you would try and destroy his reputation based on ideology – he’s suggesting that regulation can ever be GOOD. Oh dear! You really need to try to discredit Greenspan so that you can make your comment that so-called “experts” are wrong to say that de-regulation caused the crisis! Nevermind that over twenty years, Greenspan has A) more expertise and B) more common sense than you do when it comes to the economy. Oh, no. He insulted your mother, so everything he says about the current crisis is wrong. No, he can’t apply his expertise in hindsight to see the causes of the crisis after the fact: he insulted the FREE MARKET so he MUST be wrong to blame market forces! His hindsight is less than 20/20 you ivory tower elitist!!!

  2. And the government is a little far removed from “day to day chores”. I wonder how successful the country would have been if Joe Six-Pack had been in charge of foreign policy during Vietnam instead of Dr. Henry Kissinger? How many countries would be left standing?

    Common sense is not the same as expertise. It does not give you any magical qualifications that are superior to studying a subject for 8 years and engaging in it at a high level, successfully, for 20 more. Would you send a novice to operate a forklift? Would you send someone straight from the recruitment office to the trenches? Would you hire on a high school graduate as a CEO? There’s a reason people become experts. It’s because they KNOW MORE THAN MOST PEOPLE ABOUT THEIR SUBJECT. No, this does not only happen because you have a PhD. Alan Greenspan has 20 years of experience. He is much more an expert than Wakemom or anyone else installed based on “common sense”.

    And, of course, common sense can be very, very wrong, we shouldn’t forget that!

  3. Crumb,

    The free market didn’t “respond” by making a ton of shaky loans, it was forced to make a ton of shaky loans.

    As soon as that happened, CEO’s were off the hook and freed to rip us all off. They should go to jail, but won’t, because government policy allowed the bad behavior, even encouraged it.

    I’m not against regulation, I’m against bad regulation.

    You need to reread this column. Greenspan and Congress put in place the exact kind of de-regulation that you rail against, and when he failed, blamed it on the free market instead of bad policy, ignoring the fact that disconnecting CEO’s from responsibility (contrary to free market principles) enabled them to pillage their companies with government guarantees.

    That isn’t capitalism, its naiveté.

    Also Crumb, concerning the tone of this column, I guess you have never heard hyperbole or irony.

  4. Yes, it did respond by making bad loans. It responded by offering a great number of sub-prime mortgages at high interest rates to people who did not qualify for a real loan. There was no legislation that forced mortgage brokers and small institutions to make these loans. The large banks specifically avoided these bad loans. They were also CRA regulated, so they weren’t satisfying their CRA requirements by offering sub-prime loans. 80% of those loans were created by unregulated interests that wanted to make money from otherwise radioactive, leprous borrowers.

    If de-regulation fails… then it was the unregulated [free] market that failed. De-regulation cannot fail, because it is not a thing. It is a non-thing, the absence of regulation.

    I guess I’ve just read so many hyperbolic, unintentionally ironic posts here that I’ve become desensitized to it. Nevertheless, I’m going to stick by my criticisms; you privilege “common sense” over expertise and denounce educated persons because of and in service to ideology.

  5. JUST WORDS: Obama’s Four Tax Plans In Four Days

    ARLINGTON, VA — Today, the Obama-Biden campaign has outlined their fourth tax plan in just four days. Now they are saying that those making between $150,000 and $250,000 would not see their taxes increase or receive a tax cut. Under that formulation, is Barack Obama still giving a tax cut to 95% of American people? Has Barack Obama been giving the American people straight talk on the campaign trail when he says if they make less than $250,000 a year they would receive a tax cut? Check out below Barack Obama’s ever-changing tax plans:

    DEFINITION #1: The Obama-Biden Campaign Says Families Making $250,000 A Year Or Less Would See A Tax Cut

    In July 2008, Barack Obama Said: “If You Make $250,000 A Year Or Less, We Will Not Raise Your Taxes. We Will Cut Your Taxes.” (Barack Obama, Remarks, Powder Springs, GA, 7/8/08)

    In August 2008, Obama Economic Policy Adviser Jason Furman Said That Barack Obama “Would Cut Taxes For Almost All Of The Families Making Less Than [$250,000].” FURMAN: “Finally, and perhaps most importantly, the op-ed today makes a very important point that, while Barack Obama would not raise taxes for any family making below $250,000 — in fact, it would cut taxes for almost all of the families making less than that — Senator McCain cannot make a similar promise for his tax plan because, for the first time in history, he would make families pay taxes on the health insurance that they get from their employers.” (Obama For American, Press Conference Call, 8/14/08)

  6. In October 2008, Governor Ted Strickland (D-OH) Delivered The Democrat Radio Response Saying That Those Making Less Than $250,000 Would See Lower Taxes. “He’ll restore the middle class by cutting taxes for small businesses, and for 95 percent of workers and their families, including 5.7 million in Ohio. If you make less than $250,000, you won’t see your taxes go up one single dime. In fact, your tax rates will be lower than they were under Ronald Reagan.” (Governor Ted Strickland, Democratic Radio Response, 10/4/08)

    DEFINITION #2: On Saturday, The Obama-Biden Campaign Releases A New Ad Bringing The Threshold Down To $200,000 From $250,000

    In New Obama Ad — “Defining Moment” — The Threshold For The Obama Tax Plan For Families Seeing A Tax Cut Is Lowered From $250,000 To $200,000. OBAMA AD: “The Obama Plan: Families Making Less Than $200,000 Get Tax Cut.” (Obama Ad, “Defining Moment,” 10/25/08)

    Barack Obama: “If You Have A Job, Pay Taxes And Make Less Than Two Hundred Thousand Dollars-A-Year, You’ll Get A Tax Cut.” (Obama Ad, “Defining Moment,” 10/25/08

  7. DEFINITION #3: Yesterday, In An Interview With A Scranton, PA, News Station, Joe Biden Said That Only Families Making Under $150,000 Would Get A Tax Cut

    Joe Biden: “Spreading the wealth was not–he was talking about is all of the tax breaks have gone to the very, very wealthy. For example you have right now, this year, under the old tax policy that was just that was put in by George Bush, people making an average 1.4 million a year, good people, decent people, patriotic they’re going to get an $87 billion tax break. What we’re saying is that $87 billion tax break doesn’t need to go to people making an average of 1.4 million, it should go like it used to. It should go to middle class people — people making under $150,000 a year.” (Joe Biden, Interview With WNEP Scranton, 10/27/08)

    · Watch it here:

    DEFINITION #4: Today, Contrary To What Barack Obama Is Telling The American People On The Campaign Trail, The Obama-Biden Campaign Said Those Making Between $150,000 And $250,000 Would Not A See A Tax Increase Or Tax Cut

    Today, Obama-Biden Campaign Aides Said That Those Making Between $150,000 And $250,000 Will Actually Not See A Tax Increase Or A Tax Cut. “Biden aides say his comments were actually consistent with Obama’s tax plan — people under $150,000 get a cut, and people making up to $250,000 stay the same.” (Mark Murray and Mike Memoli, “$150,000 Vs. $250,000,” MSNBC’s “First Read” Blog,, Posted 10/28/08)

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