A Conscious Conservative Book Review : 13 Bankers

13 Bankers: The Wall Street Takeover and the Next Financial Meltdown

BY SIMON JOHNSON and JAMES KWAK

In the book 13 bankers, Johnson and Kwak explain the relationship between Washington D.C. and Wall Street.  They also analyze the mortgage crisis and tie it to the United States' recent economic troubles.  In the end they state that nothing has fundamentally changed and may have gotten worse since TARP and other bailouts.  They then give their recommendations for what should happen to avert economic crises in the future.  

The title of this book is taken from a meeting held at the White House on March 27,  2009.  In attendance were the heads of thirteen major U.S. banks. A main theme of this book is how bureaucrats, executives of major banks and members of the Federal Reserve float in and out of positions at each others' organizations creating an impression of incestuous relationships and a good ol' boy network that determines much of the regulatory and financial structure of banks in the United States.  This book does a good job of showing how people move from the positions of executive to government official to cabinet member and back to executive again.

This book also does a good job of analyzing the mortgage mess.  A review of comments on Amazon.com shows that some said Johnson and Kwak's explanation was too complicated and some said it was too simple.  That makes me think it was just right.  I never quite understood credit default swaps and collateralized debt obligations from reading the popular.press.  This book seemed to make it clear.  The only objection is that they overemphasized the effects of deregulation on the markets and did not talk enough about government programs designed to give loans to people who couldn't afford houses contributed to bank insolvency.

The authors state that for all of the chest beating done in Washington, D.C., several years has gone by and nothing has fundamentally changed.  President Obama is still meeting with bankers in the White House and certain banks are considered "too big to fail," no matter how much they mess up.  Johnson and Kwak emphasize more regulation and nationalization.  I disagree with this.  I believe what is needed is elimination of barriers to entry in the banking system, accountability for individual executives within the large banks and abolition of Fannie Mae, Freddie Mac and the Federal Reserve.

I recommend reading this book due to the good job which Johnson and Kwak do of explaining the mortgage mess and the relationship between Washington, D.C. and Wall Street.      

Congressional Conservative Tea Party Poopers

Will "tea party" supported Legislators make a Conscious Conservative difference?  I have examined Senators Ron Johnson,  Marco Rubio, Rand Paul, Mike Lee, Jim DeMint, Jerry Moran, Patrick Toomey and Tom Coburn in earlier posts.  What I have seen is not encouraging.  There is not the number, seniority or commitment necessary to continue anything but legislative business as usual.  There appear to be only eight Senators that are regularly identified as "Tea Party" Senators.  Only four of those have Conscious Conservative leanings and one of those has already began to distance himself from the movement.  29 House members joined the House Tea Party Caucus.  It is unsure how many of these can truly be considered a Conscious Conservative.

Of the eight "Tea Party" Senators, Rand Paul (KY), Jim DeMint (SC), and Mike Lee (UT) appear to be Conscious Conservatives, strongly in favor of smaller government and individual rights.  Ron Johnson (WI) appears to be A Conscious Conservative, but has started distancing himself from the others by not joining the Senate Tea Party Caucus.  Jerry Moran (KS)  joined the Caucus, but appears to lean Unconscious Conservative or even Socialist/Liberal compared to the other members.  Marco Rubio (FL), Patrick Toomey (PA) and Tom Coburn (OK) all seem to be Unconscious Conservatives with Rubio leaning slightly Conscious Conservative and Toomey/Coburn leaning slightly Socialist/Liberal.

Similar results are expected from the 29 members of the House Tea Party Caucus.  One of the members, Mike Pence (IN), brags on his web site about helping to write the Patriot Act.  Michele Bachman (MN), a Tea Party Caucus Leader, states that the Patriot Act should be extended.  The Patriot Act is one of the most egregious laws ever written from the viewpoint of small government and Conscious Conservatism.
One or more of several factors must exist for making a real Conscious Conservative change in the legislative process.  Eight of 100 Senators and 29 of 435 Congress members are not enough to push an agenda.  This might be overcome if some Members were committed Senior Members and Committee Chairs.  That isn't happening.  A final chance for a Conscious Conservative change would be if  all Tea Party supported Legislators were staunchly Conscious Conservative.  That isn't happening, either.  Many are either Unconscious Conservative or Socialist/Liberal "RINO's" that jumped on the Tea Party bandwagon for votes and will ride it until they get kicked off or find more luxurious transportation. 

I began writing this series of articles before the current legislative session started.  Now that it has started, I find what I had worried about all along.  Republicans and Democrats are playing the old "he said," "she said" game while spending away the childrens' futures.  Unconscious Conservative Republicans are crowing about some grain of sand on the beach earmark they've been able to cut and pretending that they are protecting America.  Although the Tea Party movement sounds good in theory, in practice there are too many Party Poopers.