The Other McCain

"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler

‘We May Be Incompetent, But We Are
All You Have Got’ Is An Increasingly Feckless Argument

Posted on | August 23, 2010 | 8 Comments

by Smitty (h/t Insty)

Conglomerate Blog has a doom-tastic post about how New Jersey is being sued by the SEC for creating a situation where bond

investors were not provided adequate information to evaluate the state’s ability to fund the pensions or assess their impact on the state’s financial condition.

How can this be a bad thing, if NJ joins 46 other States (with Ohio missing data) in blowing off pension funding? The SEC can sue a State, but not the reverse, it turns out.

Like most securities lawsuits, New Jersey’s problems could have been cured with disclosure. That is, the problem from the SEC’s perspective was not that the state doesn’t fund its public pension funds adequately; it is perfectly natural for a public entity to get stuck in this jam of not wanting to raise taxes or slash spending yet still having to honor its contracts. Rather, the problem is that New Jersey failed to tell investors buying its bonds about this underfunding.

Why not simply disclose? There is the usual answer of not wanting to have to offer higher interest rates on bonds, which is no different than the motivation of any private securities issuer. My guess is that the more telling reason is political: what senior state Treasury employee wants to sign off on disclosure that will give ammunition to a Governor’s opponents and unions?

This is just another example of the electorate failing to demand and reward integrity. The country needs to elect 48 more in the McDonnell/Christie mold, and quit chasing the Palins out of office by abusing the legal system.

This is the fruit of a system that says “You can’t handle the truth” and substitutes Federal Reserve-financed bailouts in lieu of accountability. I think we should End the Fed, add 49 more State banks, and require greater accountability from officials.

They may be incompetent, but, when the economy really seizes up, we will see what the alternatives look like.

Category: Weimar America

Comments

8 Responses to “‘We May Be Incompetent, But We Are
All You Have Got’ Is An Increasingly Feckless Argument”

  1. Joe
    August 23rd, 2010 @ 2:01 pm

    Obama approval in swing states. He is hurting, but far from out.

    To change the SEC we need better candidates to run to challenge those in power. Both on the right and the left.

  2. Joe
    August 23rd, 2010 @ 10:01 am

    Obama approval in swing states. He is hurting, but far from out.

    To change the SEC we need better candidates to run to challenge those in power. Both on the right and the left.

  3. richard mcenroe
    August 23rd, 2010 @ 3:08 pm

    Who with half a wit would have looked at the city and state spending at their recent levels and decided those bonds were a good buy?

  4. richard mcenroe
    August 23rd, 2010 @ 11:08 am

    Who with half a wit would have looked at the city and state spending at their recent levels and decided those bonds were a good buy?

  5. republicanmother
    August 23rd, 2010 @ 3:43 pm

    It’s interesting that the people in the SEC have huge ties and interests with the bailout banks.
    Observe
    http://mapper.nndb.com/start/

  6. republicanmother
    August 23rd, 2010 @ 11:43 am

    It’s interesting that the people in the SEC have huge ties and interests with the bailout banks.
    Observe
    http://mapper.nndb.com/start/

  7. republicanmother
    August 23rd, 2010 @ 3:45 pm

    previous link no good-this one links to the visual representation of SEC members past and present.
    http://mapper.nndb.com/maps/599/000010569/

    arrgh, that was so not smooth.

  8. republicanmother
    August 23rd, 2010 @ 11:45 am

    previous link no good-this one links to the visual representation of SEC members past and present.
    http://mapper.nndb.com/maps/599/000010569/

    arrgh, that was so not smooth.