Financial failures usher in new presidency--Spengler

Spengler wonders about Wall St. wizards advising the new administration:

• "The cleverest people in the United States", the Ivy-pedigreed investment bankers, have fouled their own nests as well as their own net worth, and persuaded the taxpayers to bail them out....

The one-trick wizards of Wall Street had one idea, which was to ride the trend and pile on as much leverage as credulous investors

• and crony regulators would allow....

Failed financiers run the Obama transition team. It used to be that the heads of great industrial companies got the top Cabinet posts....

• The Reagan administration had encountered a stock market in 1981 trading 50% below its the long-term trend. Reagan restored the equity market to trend by cutting taxes, suppressing inflation and easing some regulations.

The private equity sharps were fleas traveling on Reagan's dog. They simply rode the trend with the maximum of leverage. ...

• That explains how a Washington political operative like
• Rahm Emanuel, now Obama's chief of staff, who studied ballet rather than balance sheets,
• could earn a reported $16.2 million in two-and-a-half years at Wasserstein Perella, the mergers and acquisitions boutique....

Without leverage, the clever folk around Barack Obama are fleas without a dog.

• None of them

• invented anything,

• introduced an important new product,

• opened a new market, or

• did anything that reached into the lives of ordinary people.

They wore expensive cufflinks,

• read balance sheets,

• exercised regularly,

• sat on philanthropic boards, and

assumed that their flea's ride on the Reagan dog would last forever. ...

• And it will turn out no better than it did for

• the humiliated Republicans. "

From Spengler in Asia Times, via MichaelSavage.com

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