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The latest Bloomberg National Poll, released today (March 24) indicates Americans overwhelmingly dislike the financial industry, but aren't sure the government could be trusted to sort out the mess. The poll showed that 57% have a very or mostly unfavorable view of Wall Street and only 25% have a favorable opinion. Banks are disliked by 54% and insurance companies by 60%. Almost two-thirds have a low opinion of U.S. business executives -- almost as low as the respondents' 67% negative view of Congress. However, more than 40% of those polled think government has gone too far in trying to fix the financial industry, versus 37% believing it hasn't done enough.

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Comments

Visduh March 24, 2010 @ 3:09 p.m.

Distrust of the government's ability to fix or run anything well is only common sense. Of course, if the government cannot be trusted to put regulatory tools in place to straighten out the financial mess, who can? It is unfortunate that overall business executives are so deeply distrusted. Most of corporate America is not in trouble, not teetering on bankruptcy, and not abusing the public. But the auto industry and the financial mess have resulted all of business being tarred with the same brush. We went through a period of this sort of malaise in the late 60's and early 70's--remember Ralph Nader and his indictment of the auto industry along with other consumer-goods producers?

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Don Bauder March 24, 2010 @ 4:56 p.m.

Response to post #1: I am one who very reluctantly believes in regulation. I used to embrace the Austria/University of Chicago free market approach. No longer. In the last 30 years, American industry -- along with industry in other major industrial nations -- has adopted the philosophy that the stockholder is the board's only constituency. This is embedded in the law in Delaware, where the plurality of companies incorporate. This mentality has led to massive fraud, and destructive economic policies such as American companies sending their manufacturing offshore to low- and slave-wage nations to jack up short term profits and justify outrageous CEO salaries. The essence of white collar fraud is contrived complexity. In the last 30 years, companies -- particularly financial ones -- have stepped up the practice of promiscuous obfuscation. Fraudulent accounting has escalated frighteningly. What do you think derivatives are all about? It's massive obfuscation fraud, practiced by the financial industry. To be sure, regulators aren't smart enough to figure out such highly complex instruments, but at least they could force them to be registered. What we should do is pass rigid criminal fraud laws, and imprison businesspeople who break them. But business lobbyists would thwart that. Just look at the situation today: everybody admits that Wall Street almost drove us to the financial brink, but the Street's lobbyists are thus far successfully fighting a tough reworking of regulation. Best, Don Bauder

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SurfPuppy619 March 24, 2010 @ 6:13 p.m.

I am one who very reluctantly believes in regulation

You need just enough regulation to keep everyone honest, once you have hit that oint everything else takes care of itself.

If we don't clean up Wall Street and the financial services market the entire country is going to collapse. Just like our state has (and our own city).

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Visduh March 24, 2010 @ 7:11 p.m.

Don, Could you just tell us all how you REALLY feel?

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Visduh March 24, 2010 @ 7:12 p.m.

For the readers of the Reader who don't understand, my previous post was satire.

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Don Bauder March 24, 2010 @ 10:53 p.m.

Response to post #3: We need enough regulation to keep everybody less dishonest. Best, Don Bauder

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Don Bauder March 24, 2010 @ 10:55 p.m.

Response to post #4: I didn't even say a fraction of what I intended to say. I have said most of those things already on this blog, though. Best, Don Bauder

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Don Bauder March 24, 2010 @ 10:56 p.m.

Response to post #5: I saw that it was satire right away. No need to point it out. Best, Don Bauder

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MondoGrapes March 25, 2010 @ 7:24 a.m.

Re: Post 2:

I agree with your sentiment Don. But what we have today (and I'm sure there is no need to point this out to you or the very knowledgeable folks who frequent your fine blog) is NOT free market capitalism and I'm not sure that a real free market capitalist society is possible. There is simply too much special interest money involved for that scenario to ever play out.

What we have now is crony capitalism--and I believe we are actually heading more toward a fascist system. If we had a true free market capitalist system, all those banks and car companies would have been allowed to go under. We are working our way to a very American version of fascism (especially when you take into account the frightening erosion of civil liberties in the past decade) and as George Carlin pointed out, when fascism comes to America it will not be wearing jack boots, it will be wearing smiley faces.

That said, I like to think of capitalism as a game. To play a game fairly and properly, there needs to be rules. To make sure that those rules stand and are applied to all who play the game in a fair and equal manner, there need to be umpires or referees or officials with the will and the power to levy punishment if the rules are not followed (fines, suspensions, expulsions, forfeitures). Otherwise, there is no game. Just people running around in an anarchic circle clubbing one another.

I wonder if there are many sports fans among those who advocate pure free market capitalism. If there are, I wonder if they believe that the games of the NBA, MLB, NHL, NFL or any other league could take place if there weren't very set rules and a firm and effective system, in tandem with a very visible and effective group of enforcers in place to punish those who broke them.

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Don Bauder March 25, 2010 @ 7:51 a.m.

Response to post #9: As you point out, pure capitalism, free enterprise, free markets are all myths that so-called conservatives worship, but hardly practice. Just look at San Diego. The establishment preaches free markets without government intervention, then sucks government dry as it lines up for subsidies for hotels, shopping centers, big box stores, stadiums and ballparks, etc. It's similar nationally: look at the tax breaks, protectionism, and subsidies doled out to various industries while the U.S. Chamber of Commerce sings the praises of free markets, competition, etc. It's a big fraud. Best, Don Bauder

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MondoGrapes March 25, 2010 @ 8:03 a.m.

Response to post 9:

These so-called conservatives and free market capitalists certainly talk out of both sides of their mouths. To keep the conversation recent, the funniest example of it was during the Health Care debate. Many sounded the bell of letting the free market handle health care through competition. But when the proposal to lift the antitrust exemption enjoyed by the insurance companies was floated they all screamed. Competition indeed.

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Visduh March 25, 2010 @ 8:42 a.m.

Gosh, for once these comments are staying on topic. The rise of the huge corporation rendered the notion of free markets rather quaint in the US. That was all the more true when those huge corporations, whether auto producers, banks, or Wall Street firms, grew "too big to fail." Failure is part and parcel of the free market. So I agree that we probably need better enforcement of the rules. I grow impatient with those who advocate total abandonment of the market economy because ours in imperfect though. And I don't see this era of corporate welfare and bailouts as fascism. If it were, it might be more effective, in the short run, than what we've recently experienced!

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Don Bauder March 25, 2010 @ 10:58 a.m.

Response to post #11: Yes, that indeed was a great example. Best, Don Bauder

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Don Bauder March 25, 2010 @ 10:59 a.m.

Response to post #12: Gotcha. Best, Don Bauder

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Don Bauder March 25, 2010 @ 11:02 a.m.

Response to post #13: I don't know how many Western economists want abandonment of the so-called free and definitely imperfect market. Yes, it's full of flaws, but it's still the best we have -- rather like democracy. Best, Don Bauder

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pascal March 25, 2010 @ 2:09 p.m.

Response to post #2 and others: What has also exploded over the last 30 (to 40) years has been governmental intrusion into american industry-- and all other areas of life-- that was never before seen in this country. I don't think we can dismiss this as perhaps THE major instigator of the corporate climate we have today.

American industry now pursues "distructive economic policies" and relies on "promiscuous obfuscation" precisely because of government's futile attempt to now regulate every minutia of commerce, and like you said, also then refuses to then "pass rigid criminal fraud laws, and imprison businesspeople who break them."

You also rightfully point out, there are also the "business lobbyists [who] would thwart that [justice]." But they are also a manifestation of the same problem: government's insertion of itself into business. Surely if government had no power to manipulate the playing field, lobbyists would have no reason to be knocking on that door in the first place either.

It seems that government's total ineptitude has not just allowed for, but driven Wall Street (and the rest of us) to the brink. If they were still alive, I've no doubt that Milt and Rose Friedman would also feel the same way. The Austria/University of Chicago free market approach is not dead. If it had been even remotely followed for the past 4 decades, I doubt this item would be even be a blog post today.

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Don Bauder March 25, 2010 @ 4:18 p.m.

Response to post #17: I must strongly disagree with your analysis. The greed that is destroying us basically started around 1980. That was the year Ronald Reagan was elected. It was during this period that the nation went strongly for deregulation, although the movement had begun earlier. It was in the 1990s that the government did away with Glass-Steagall and basically let the financial institutions run rampant. It was during this post-1980 period that companies rapidly stepped up the placing of their plants overseas to take advantage of zero- and slave-level wages. It was during this period that the law seemed to embrace the idea that the only constituency of a board of directors is the shareholders. It was during this period that accounting abuses ran rampant, partly because all top management cared about was attaining short term profits that would please Wall Street. Actually, the greed that we have seen over the past 30 years came as the government was loosening regulation and control over business and financial institutions, not the other way around. Unfortunately, business and Wall Street proved conclusively that they could not handle getting more freedom from government. I say this humbly. I was an Austrian School/U of Chicago believer who felt that loosening of control over the private sector would lead to a more stable, creative and flourishing society. I interviewed Milton Friedman regularly; I was one of his favorites. But by the late 1980s I began to realize that rather than unleashing entrepreneurial vigor, the movement away from regulation was simply unleashing intolerable greed. I had been wrong, and I began to see that ever more clearly in the 1990s. My columns took on a different tone, although I remained a registered Republican until 2004. But I never voted for George W. Bush. Today, many of my interviewees are arch-conservatives; I respect their views. But I have reluctantly come to the conclusion that neither business nor Wall Street can be trusted with the freedom they desire (except when they need government handouts to survive.) Best, Don Bauder

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SurfPuppy619 March 25, 2010 @ 10:03 p.m.

The rise of the huge corporation rendered the notion of free markets rather quaint in the US.

And Roberts et al on the SCOTUS giving these billion and trillion dollar firms free reign to spend as much in election ads as it takes to elect their puppets sure isn't going to help matters.

America has gone from the most intellectually advanced, biggest creditor nation in the world to the largest debtor country supported by service sector jobs-all in basically one generation.

God help us!

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SurfPuppy619 March 25, 2010 @ 10:12 p.m.

Response to post #17

Don, that was the BEST post I have ever read regarding policy and regulation of Big Business.

A fitting summary of everything you have said since I have been reading your columns. I am behind everything you stated 100%, as I am sure the majority of Americans are.

That post is why you are one of the smartest business writers I have come across. I am glad you have kept it up-even in your "retirement".

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Don Bauder March 26, 2010 @ 7:52 a.m.

Response to post #19: Good point: we have gone from creditor nation to debtor nation. In the last few days we have seen weakness in the U.S. bond market. Is it significant? It's too early to say. But it's something to watch. Best, Don Bauder

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Don Bauder March 26, 2010 @ 7:59 a.m.

Response to post #20: It's not much of a retirement. Check the number of columns and blog entries and responses to those who write in. I'm behind the computer most of each day. I'll be 74 in May. But I wouldn't do this if I weren't enjoying myself greatly. I've now been with the Reader for seven years and they have been very satisfactory years. Best, Don Bauder

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pascal March 26, 2010 @ 5:37 p.m.

Response to post #18: In Mr. Reagan’s best intonation: “Well”… First, I’m pretty sure “greed” pre-dates our 40th President. Looking out for one’s self-interest (even to ugly extremes), has been around since the dawn of time. And that “the nation went strongly for deregulation” in the 1980’s was a good start, but unfortunately what resulted was a morass created by industries being partially deregulated and partially still under government control. Anyone else remember the debacle resulting from deregulation of the airlines, while keeping the federally-run airports under firm governmental control? Political climates changed and we stopped well short of anything even resembling true deregulation.

I’d have to check my dates, but I believe Glass-Steagall was initiated in the late 19-teens as a direct response to a financial crisis, to strictly separate commercial and investment banking. But some, including Friedman, have written convincingly about its likely contributions to the decade-later much larger stock market crash and resulting economic meltdown known as the “Great Depression.” Where we’d be today if G-S had never been enacted in the first place would be an interesting study, I think. In contrast, the “recent” undoing of G-S by the Gramm-Leach-Bliley Act, passed by a Democratic congress (by that time) and signed into law by Bill Clinton in 1999, was not a reaction to any similar financial “crisis,” but a FAVOR to banking interests. The (now) obvious result of that was just another inglorious example of how government actions inevitably induce both intended and unintended negative consequences. And, to say that “business and Wall Street proved conclusively that they could not handle getting more freedom from government,” paints way too broad of a brush-stroke, considering how many companies still behaved responsibly and continue to do so.

The answer is not to get government ever more involved, but to remove them almost completely, save their legitimate role of punishing criminal offenders (which I wholeheartedly agree they should do, instead of propping them up with subsidies or bailouts). And truly free markets will also punish malfeasant businesses without the inevitable adverse side-effects. Cleary I’m not alone in seeing this. Interesting that you entitled your item here “Americans Distrust Wall Street, but Not Sure about Government,” yet the poll you cite actually says people view government even more negatively (67%) than they do Wall Street (57%). While you maintain that “neither business nor Wall Street can be trusted with the freedom they desire,” our larger fear should be that government can’t be trusted with the power they can give themselves.

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Don Bauder March 26, 2010 @ 6:39 p.m.

Response to post #23: OK, suppose we remove government almost completely. That means no bailout for financial institutions on the ground that they are too interconnected to fail or too big to fail. (Both Republicans and Democrats say that if we had not rescued Fannie, Freddie, AIG, Citigroup, etc. the system would have crashed. I am not saying that I agree with that -- just saying it is the conventional wisdom.) If government gets almost completely out of business, then the massive number of tax breaks for businesses disappear. Ditto for the trade protectionism. Profits shrink. I don't think you realize how totally dependent big corporations are on government largesse. If the U.S. removed its tax and protectionist breaks, the U.S. would be far less competitive with countries that have such breaks. I appreciate your idealism, but I don't think it's practical. Best, Don Bauder

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SurfPuppy619 March 27, 2010 @ 8:07 a.m.

And, to say that “business and Wall Street proved conclusively that they could not handle getting more freedom from government,” paints way too broad of a brush-stroke, considering how many companies still behaved responsibly and continue to do so.

With all due respect pascal, there would NOT be a single major investment bank left standing today if not for the TARP bailout (with taxpayer money).

All 6 would have failed (instead of just 1)-with Goldman leading the way.

Glass-Steagall was a direct response to the abuses that created the Great Depression, it was enacted in 1933 after the country belly flopped from the "Roaring 20's. G-S should have NEVER been repealed.

When Big Business starts throwing money around to get favors-that is when the poor and middle class need to grab their wallets.

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SurfPuppy619 March 27, 2010 @ 8:12 a.m.

The answer is not to get government ever more involved, but to remove them almost completely,

The problem is then you get what we just received in 2008-privatized profits for Big Business and sopcialized losses of Big Business passed on to the poor and mddle class when their wild bets don't pay off.

I am with Don, Big Business gets 1,000's of more breaks than the poor and middle class do, they don't need anymore.

There are currently 43K registered lobbyists in Washington DC, for 535 members of the Congress. That number says it all. 80-1.

Those 43K registered lobbyists in Washington DC have one boss-and it is not the poor or middle class.

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Don Bauder March 27, 2010 @ 1:01 p.m.

Response to post #25: I agree with you: the big Wall Street houses would have failed -- including Goldman Sachs. The AIG bailout was essentially a rescue of Goldman. The fact that Goldman and Morgan Stanley were permitted to change their charters to become commercial banks instead of investment banks was one of the great disgraces of the 2008-2009 period, which we are not yet through. These are INVESTMENT banks; people put in money expecting higher returns and knowing that they could lose. That was the way it used to be. Now these big banks not only get bailed out, they can borrow from the Fed at zero percent interest. Best, Don Bauder

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Don Bauder March 27, 2010 @ 1:06 p.m.

Response to post #26: Well said. Business gets multiple subsidies, tax breaks, protectionist legislation, bailouts, you name it. This is hardly what Adam Smith envisioned. In fact, it is hardly capitalism. And it was the business sector that destroyed capitalism by going hat in hand to Washington. We have a system of corporate socialism, and it was manufactured by corporations. Best, Don Bauder

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SurfPuppy619 March 27, 2010 @ 11:29 p.m.

But what we have today (and I'm sure there is no need to point this out to you or the very knowledgeable folks who frequent your fine blog) is NOT free market capitalism and I'm not sure that a real free market capitalist society is possible. There is simply too much special interest money involved for that scenario to ever play out.

What we have now is crony capitalism--and I believe we are actually heading more toward a fascist system. If we had a true free market capitalist system, all those banks and car companies would have been allowed to go under.

By MondoGrapes 7:24 a.m

Good post-I missed it the first time around. I think it is very accurate and on the money.

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Don Bauder March 28, 2010 @ 8:20 a.m.

Response to post #29: Agreed. We have crony capitalism. Corporate socialism. Capitalism for the poor and socialism for the rich. Privatization of the gain and socialization of the risk. The idea of free market, free enterprise, rugged individualistic capitalism is an abstraction that some people worship, but it probably never really existed. Example: look at the railroads in the 19th century. The government gave them the West. All the while, like so-called capitalists today, the railroad robber barons talked about freedom from government interference. If they had been free from government, they would have gone broke. Best, Don Bauder

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