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Is it all about Incompetence or Just Pretense?

By : Ziad K. Abdelnour| 16 May 2011
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It is clear to everyone today that President Obama hasn’t been able to rein in the giant banks or significantly lower unemployment. Obama is following disproven models, and has appointed economists who either helped cause the crisis in the first place, or who have drunk the Kool-Aid of failed economic theory.

But Obama has actually been serving “his constituency”: Goldman Sachs and the other Wall Street giants which funded his campaign…..and top economists running the Fed and advising Obama didn’t miss the dangers to the economy due to negligence, mainly because they are rewarded for doing so.

It is a fact that the decision to use faulty models was an economic and political choice, because it benefited the economists along with those who hired them. For example, the elites get wealthy during booms and they get wealthy during busts. Therefore, the boom-and-bust cycle benefits them enormously, as they can trade both ways.

Specifically, it seems the “winning model” today is for the big boys to make bucket loads of money during the booms using fraudulent schemes and knowing that many borrowers will default. Then, during the bust, they know the government will bail them out, and they go about buying up competitors for cheap and consolidating power. They may also bet against the same products they are selling during the boom, knowing that they’ll make a killing when it busts.

It is not like economists weren’t warning about booms and busts. Nobel prize winner Hayek and others were, but were ignored because it was “inconvenient” to discuss this “impolite” issue.

Likewise, the entire Federal Reserve model is faulty, benefiting the banks themselves but not the public.

The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics today that real criticism of the central bank has become a career liability for members of the profession. This dominance helps explain how, even after the Fed failed to foresee the greatest economic collapse since the Great Depression, the central bank has largely escaped criticism from academic economists. In the Fed’s thrall, the economists missed it, too.

It is clear more than ever today that the Fed has a lock on the economics world. There is no room for other views, which I guess is why economists got it so wrong.

Not only have our government “leaders” in the Fed, Treasury, Congress and White House ignored the real world, they have taunted it.

The New York Times recently reported … that we sent in 36 U.S. Special Forces troops to get Osama bin Laden when we knew he was in Tora Bora. By contrast, we sent nearly 150,000 soldiers to get Saddam Hussein. In case you’re keeping count at home, we got Saddam and we didn’t get Osama.

What does that tell you about this administration’s priorities? Well, in my humble opinion, this goes beyond incompetence. If you send only 36 soldiers to get somebody in the middle of Afghanistan, it means you don’t want to get him…

Osama had about 1,500-2,000 well-armed, well-trained men in the region. 36 guys to get 2,000? Why would we let ourselves be outgunned like that?…

There is an inescapable fact – if you put this little effort into capturing someone, it means you don’t want to capture him. Only when it was politically expedient did the President allow the military to do that for which they have been trained and bin Laden was killed. Even in this, it would appear that the President revealed the depth and breadth of his Administration’s complete incompetence and total ignorance of the Mideast temperament. It would have been far more politically advantageous and psychologically powerful to have taken bin Laden alive and displayed him as a the captured, impotent coward that he really was. By assassinating him and then surreptitiously disposing of his body, Barack Hussein Obama has forever installed Osama bin Laden as a martyr of mythic proportion in the demented minds of zealous jihadists and fueled conspiracy theorists ad nauseum. This level of incompetence defies credulity.

Similarly, if you think Obama is competent in fixing the economy and reining in Wall Street, remember what Harold Bradley – who oversees almost $2 billion in assets as chief investment officer at the Kauffman Foundation – said:

“We are in a cabal… five or six players … own the regulatory apparatus. everybody is afraid to regulate them”

As Abraham Lincoln said, “You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.” As long as you don’t lose the teleprompter.

Your feedback as always is greatly appreciated.

Thanks much for your consideration.

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