Uh-oh, Russia: Here come the Republicans

David J. Firestein, a career U.S. diplomat who served as deputy spokesman at the U.S. Embassy in Moscow from 1998 to 2001, and is now director of Track 2 Diplomacy at The EastWest Institute, writing in the Moscow Times:

A year ago, when the administration of U.S. President Barack Obama initiated its “reset” of U.S.-Russian relations, two things were clear: First, the U.S. Congress, particularly the Senate, would have an outsized role to play in the process; and, second, the Democrats would likely have a fillibuster-proof 60 votes in the Senate, making the advancement of Obama’s major Russia policy overtures a bit easier than might otherwise be the case. A year later, the first proposition remains true, but Republican Scott Brown’s recent upset victory in the Massachusetts Senate race complicates the second since Democrats no longer have 60 seats in the Senate— the threshold that allows a party to pass legislation on a “fast track” by depriving the opposing party of its ability to filibuster. All of this means that there could be some turbulence in U.S.-Russian relations in 2010.

While the reset was partly about changing the tenor of U.S.-Russian relations, a lot of it was about policy. Congress is a decisive player on much of that policy. The Obama administration’s two major Russia initiatives — the follow-on agreement to the expired Strategic Arms Reduction Treaty, or START, and the Comprehensive Test Ban Treaty, or the CTBT — will require Senate ratification.

START, the flagship arms control agreement between the United States and Russia and the centerpiece of Obama’s reset policy, should be the easier sell in the Senate. There is broad, bipartisan consensus on the basic thrust of the treaty, which seeks to limit nuclear warheads and delivery systems on both sides in a transparent and verifiable manner. The original START agreement passed in 1992 by an overwhelming margin of 93-6, easily exceeding the 67-vote threshold required for ratification.

But things have changed a lot since 1992. The honeymoon of the early and mid-1990s in U.S.-Russian relations is long gone. Russia has backtracked dramatically on democracy and media freedom, to the consternation of many in Congress. And the Eurasian giant has, in the view of many U.S. policymakers, repeatedly bullied smaller neighbors, including a series of provocations aimed at Georgia that played a role in the outbreak of the Russia-Georgia war of 2008.

Perhaps more important, after the polarizing presidencies of Bill Clinton and George W. Bush, both of whom served two four-year terms, U.S. foreign policy has become vastly more politicized than it was a generation ago, during the era of President George H.W. Bush. It used to be that “politics stopped at the water’s edge,” but that principle seems to have stopped at the 20th-century’s edge. When George H.W. Bush called on the Senate to ratify START in 1992, five of the six “nay” votes came from his fellow Republicans; only one Democratic senator balked. Those days of large-scale aisle crossing are gone. Today, virtually every foreign policy issue — from arms control to climate change to even humanitarian assistance to Haiti — seems to be viewed by many members of both parties through the prism of campaign politics.

The upshot is that START ratification is going to be an uphill battle for the Obama administration. Substantively, many Republicans, and some Democrats, have concerns about key provisions of the accord, particularly, those pertaining to verification provisions. In addition, many senators have expressed concerns that START shouldn’t be ratified unless they can secure guarantees that the reduced U.S. nuclear arsenal will be sufficiently modernized. Politically, the Republicans, emboldened by strong state-wide victories in recent months in Virginia, New Jersey and now Massachusetts, will be disinclined to hand Obama a significant foreign policy achievement in advance of midterm elections in the fall.

Getting the CTBT ratified will be even tougher. As a candidate, Obama made the CTBT a major focal point of his foreign policy platform, promising to “build consensus behind ratification of the Comprehensive Test Ban Treaty.” That consensus was elusive in 1999, the last time that the treaty was put to a test in the Senate, and will likely be even more elusive in 2010. In 1999, ratification failed by a margin of 48-51 — well short of the requisite 67 votes. The vote went down largely along party lines, with most Democrats supporting the agreement and most Republicans opposing it. In 2010, the congressional terrain looks equally forbidding for CTBT passage.

Congress is a major factor on other Russia policy issues as well. Russian accession to the World Trade Organization is a case in point. Congressional action would be required to upgrade Russia, the largest economy not yet represented in the WTO, from the Cold War-era lows of the Jackson-Vanik amendment to establish normal trade relations, which are required to secure U.S. agreement to Russia’s accession to the WTO. Russian WTO accession seems to be on the Obama administration’s congressional to-do list in 2010, but in the current cold trade climate — Russia just banned U.S. poultry imports, valued at $800 million a year — the issue is going to be as contentious as ever. That may be why Russian officials have sent mixed signals as to whether Russia itself will pursue WTO accession aggressively.

Congressional approval would also be required for the United States to enter into a “123” agreement with Russia on civil nuclear cooperation. This important area that had progressed nicely during George W. Bush’s last year in office was put on ice after the eruption of the Russia-Georgia war.

As far as U.S.-Russian relations are concerned, 2010 is truly the “Year of Congress.” It appears less likely, however, that it is going to be the “Year of Results.

44 responses to “Uh-oh, Russia: Here come the Republicans

  1. I know I am stating the obvious, but the Obama administration is toast. No adminstration can recover from a rejection as dramatic as the Brown – Massachusetts event. Everything is now permanently different worldwide.

    • No doubt about that. The fact that Democrats now have only 59 out of 100 Senatirial seats means complete republican control.

      Mark my word – Obama will be out of office in less than 7 years, before he can even close the Guantanamo torture facilities.

      • America is angry. The average voter did not want a Marxist. They wanted a Centrist Clinton type. The Tea Party Patriots will rise up in November and take this country back.

        • Are you from Appalachia?

          • Actually he is talking about the mid term elections, where the democrats are looking to get a hiding.

            Of course you being an enemy of democracy probably don’t know anything about them….

            • Andrew, FYI, the word ‘Appalachia’ has nothing to do with mid-term elections. Appalachia is the heartland of conservative Republican support. It’s your kind f people:


              Appalachia is a term used to describe a cultural region in the eastern United States that stretches from western New York state to northern Alabama, Mississippi, and Georgia


              Hillbilly is a term referring to people who dwell in rural, mountainous areas of the United States, primarily Appalachia and the Ozarks. Due to its strongly stereotypical connotations, the term is frequently considered derogatory, and so is usually offensive to those Americans of Ozarkan and Appalachian heritage. However, the term is also used in celebration of their culture by mountain people themselves.


              Redneck is a disparaging [1] term that refers to a person who is stereotypically Caucasian and of lower social-economic status in the United States, particularly referring to those living in rural areas. Originally limited to the Southern United States,[2] and then to Appalachia,[3] the term has become widely used throughout North America.

              • Of course, the usual Russian sovok mentality of disparaging the views of others.

                How do you stand living in the US Michael, I mean Arthur?

                After all, it is the exact opposite of the hell hole that is neo fascist Russia that you adore so much.

                Why do you live in the US Arthur?

                Surely you would be happier in your dictatorial and racist Russian homeland?

                • [Of course, the usual Russian sovok mentality of disparaging the views of others.]

                  Looks like you are very disparaging of my views, doesn’t it, sovok?

      • Interesting how inmates of Guantanamo who hail from places like Russia would rather stay there, describing it as a holiday resort compared to the sort of treatment they would get from Russians such as yourself, ie real torture, electrocutions, beatings, rape, the sort of thing that Russians like yourself enjoy doing to prisoners.

        “The mothers of the eight Russians held with other prisoners from Afghanistan at the US military base at Guantanamo Bay have begged Washington not to extradite their sons to answer terror charges in Russia, fearing that conditions in their jails and judicial system are even worse than those at Camp Delta.
        “In Guantanamo they treat him humanely and the conditions are fine,” Amina Khasanova, the mother of Andrei Bakhitov, told the newspaper Gazeta. “I am terribly scared for my son in a Russian prison or court system.”

        She said her son wrote to her that conditions were so good in Camp Delta in Cuba that “there is no health resort in Russia that can compare”.

        Camp Delta has been criticised by human rights groups for the “torturous” conditions under which inmates are held awaiting trial by a special military tribunal.

        They are held in solitary confinement for 23 hours a day, and occasionally subjected to “sensory deprivation techniques” involving goggles, gloves and mufflers which impede their senses. Lights are left on in cells during the night.

        There have been 28 suicide attempts among the 612 prisoners at the facility.

        Russian jails, where inmates may be held 20 to a cell, tuberculosis is rampant and hygiene minimal, have been condemned as “deadly”.

        Although the death penalty has been abolished in Russia, Muslim prisoners held on “terrorism” charges may be persecuted by fellow prisoners and prison staff angered by the terrorist attacks on civilians by Chechen rebels.

        Allegations of torture and beating in remand custody are commonplace. By contrast, Mr Bakhitov told his mother that in Guantanamo “everything is fine with me”.

        “They give me books here and I am held in a clean place. The food is tasty. I want for nothing but freedom. Good people are sat around me.”

        Mrs Khasanova said her son was an innocent victim of circumstances. He was arrested after he went to Chechnya in 1999, “to visit a renowned Islamic institute”. He fled from Russia to Tajikistan, and from there to Afghanistan, where he was arrested by the Taliban as a suspected KGB agent.

        “The [Russian authorities] have failed to prove he participated in any military actions [in Chechnya]. He ran from Russia because he spent two and a half months in jail.”

        Ms Khasanova is not the first mother of a Russian in Guantanamo to plead with Washington not to extradite her son to face Russian justice.

        Earlier this year Nina Odizheva, the mother of Ruslan, 29, from Kabardino-Balkaria, wrote several times to the US ambassador, Alexander Vershbow, begging Washington to resist Moscow’s calls for extradition. She said she had not heard from her son for 18 months when the Russian prosecutor contacted her to say he was suspected of being a member of the Taliban.

        Ruslan wrote to his mother that at Camp Delta “what we see around us is a complete miracle”.”


        Try again you retarded Russian dwarf.

  2. I am not advocating that I want a Centrist Clinton Type. That is preferable to a Marxist. I am just looking for a strong conservative type that can give Putin and Medvedev a spanking, like in the Cold War days.

    • What difference does it make who’s in power in Washington. The Cold War with Russia makes less sense than washing dishes while the Titanic is sinking.

      With the US economy held hostage by Wall Street, with the unsolvable mess in Iraq and Afghanistan, and with Iran building nukes – there is absolutely no need nor room to create artificial enemies like Russia.

      • I want to be friends with Russia and solve the world’s problems together in a free Capitalist Democratic societies, where people themselves, the governments can decide who they want to be.

        But this dream is not to be. Putin has does not want to be friends with the US. He believes that there can only be one Superpower. Putin wants the Russia to be it. His objective is to control the world energy supplies. He believes that he can hold the US and China hostage with his plan like he does Ukraine.

        • [where people themselves, the governments can decide who they want to be. ]

          Is there a word missing here?

        • Meanwhile a Savokian Superpower on the Ukrainian border has decided that Ukraine should not get the wrong idea during the presidential election. Savokian RaSSiya has closed the Luekoil refinery!

          “KIEV, Jan. 27 – Russian oil major Lukoil will shut down its Ukrainian oil refinery on Thursday for a 1.5-month scheduled maintenance, the company announced on Wednesday. This is the second time that Lukoil shuts down its Lukoil-Odessa oil refinery over the past four months. The refinery was out of operation in October 2009 due to a dispute with the Ukrainian oil pipeline authority.”

          Rasha also does price gouging during Ukraine’s spring planting. Monopolist Moscali charging higher prices for gas and oil than in Europe, and that is before it is even shipped, while claiming market prices and accusing Ukrainians of stealing.

          Filthy Rasha surrounded by enemies will always remain that way. America knows too well Moscovy is surrounded, and is tightening the noose. Not much more needs to be done but wait for the inevitable end of Savok once more. The reason Arthur is in USA to slobber on us.

          • Georg,

            I went to my Costco outlet the other day. The doors are closed. They are closed for renovation.

            Could you please write something angry at Costco. What right do they have to run their business the way they see fit and to renovate their facilities?!

      • Ah, lovely, another flat Earther.

        “With the US economy held hostage by Wall Street,”

        Which hasn’t changed much in the past two centuries, and we have survived.

        “with the unsolvable mess in Iraq and Afghanistan,”

        By definition, there is no such thing as an unsolvable mess militarily. Some just require absolutely unrealistic preformances to solve (such as Berlin 1945). Iraq and Afghanistan are hardly that.

        “and with Iran building nukes”

        A. With help from our dear friends in Moscow.

        B. They haven’t built them yet, as far as anyone on this side of the barbed wire knows, so there may be time enough to stop them.

        “there is absolutely no need nor room to create artificial enemies like Russia.”

        Wonderful. Now will you please tell PUTIN and his cadres that before they do something stupid!

  3. I do not think it will be “cold” war like in 1945. In those days the soviet union exploited 100 million slaves that FDR (a democrat) allowed to develop after the defeat of Hitler. Those peoples were in eastern Europe, but are now free. Putin has no one to exploit except Russians. Therefore Russia is not our main problem at all.

    Of course a bunch of furious Republicans will not be fun for Putin.

  4. Another political factor is that the democrats themselves have moved right under Obama’s programs.

    Obama knows how to manufacture conservatives by the million.

    • You keep on talking about “Obama programs”. Other than the medical insurance reform, which went nowhere, what other “programs” has he enacted? AFAIK, he has done nothing, except for making that Nobel Lecture speech.

  5. Hi Arthur:

    The only program they got thru was a ruinous “stimulous” budget that mostly went to the bank accounts of left wing groups.

    If it had gone to fix bridges and roads it would have been actually stimulating to the economy (still a bad idea).

    Huge debt has always resulted in reduced economic activity and unemployment.

    Obama administration programs did fail. This was primarily because they enraged the political opposition.

    Now I managed to wander off subject.

    • Ron,

      You are forgetting that the vast majority of various “economic” measures ($hundreds of billions) went to Wall Street, and most of that went to pay bonuses to the greedy bastards that created this World-wide economic crisis. Moreover, most these measures came about while Bush was still in power.

      Face it – from the $trillions wasted on the military spending to the bonuses to the Wall Street executives to the subsidies to the agro-business — USA has a socialist anti-free-market welfare system for the rich. We are the Robin Hoods in reverse: we rob the middle class and give to the rich.

      And Obama is no different from Bush on that. The problem is not the personalities. The problem is the reality that wealthy special interest lobbies govern our elected officials.

      • Actually Arthuretta, the majority of the spending package came about under Obama, and he is massively outspending Bush.

        You are as usual showing your complete stupidity and ignorance Arthuretta.

        “Obama’s trillions dwarf Bush’s ‘dangerous’ spending
        By: Byron York
        Chief Political Correspondent
        February 24, 2009

        Pelosi and Reid called Bush’s budgets “dangerous” and “unpatriotic,” but with Obama, they’ve changed their tune

        Back in 2006, when Democrats were hoping to win control of the House and Senate, party leaders worked themselves into a righteous outrage over the issue of out-of-control federal spending. Rep. Nancy Pelosi, D-Calif., called the Republican budget “irresponsible” and “unpatriotic” because it increased the amount of U.S. debt held by foreign countries. Sen. Harry Reid, D-Nev., accused Republicans of going on “an unprecedented and dangerous borrowing spree” and declared GOP leadership “the most fiscally irresponsible in the history of our country … no other president or Congress even comes close.”

        You won’t find too many defenders of George W. Bush’s record on spending these days, even among Republicans. But a check of historical tables compiled by the Office of Management and Budget shows that the spending that so distressed Pelosi and Reid seems downright modest today. After beginning with a Clinton-era surplus of $128 billion in fiscal year 2001, the Bush administration racked up deficits of $158 billion in 2002, $378 billion in 2003, $413 billion in 2004, $318 billion in 2005, $248 billion in 2006, $162 billion in 2007, and $410 billion in 2008.

        The current administration would kill to have such small numbers. President Barack Obama is unveiling his budget this week, and, in addition to the inherited Bush deficit, he’s adding his own spending at an astonishing pace, projecting annual deficits well beyond $1 trillion in the near future, and, in the rosiest possible scenario, a $533 billion deficit in fiscal year 2013, the last year of Obama’s first term.

        And what about the national debt? It increased from $5 trillion to $10 trillion in the Bush years, leading to dramatically higher interest costs. “We pay in interest four times more than we spend on education and four times what it will cost to cover 10 million children with health insurance for five years,” Pelosi said in 2007. “That’s fiscal irresponsibility.”

        Now, under Obama, the national debt — and the interest payments — will increase at a far faster rate than during the Bush years.

        “We thought the Bush deficits were big at the time,” Senate Minority Leader Mitch McConnell, told me this week as he prepared to attend Obama’s Fiscal Responsibility Summit. “But this is going to make the previous administration look like rank amateurs. We could be adding multiple trillions to the national debt in the first year.”

        At some point last week, the sheer velocity of Obama’s spending proposals began to overwhelm even experienced Washington hands. In the span of four days, we saw the signing of the $787 billion stimulus bill, the rollout of a $275 billion housing proposal, discussion of Congress’s remaining appropriations bills (about $400 billion) and word of a vaguely-defined financial stabilization plan that could ultimately cost $2 trillion. When representatives of GM and Chrysler said they might need $21 billion more to survive, it seemed like small beer.

        The numbers are so dizzying that McConnell and his fellow Republicans are trying to “connect the dots” — that is, to explain to the public how all of those discrete spending initiatives add up to a previously unthinkable total. Obama’s current spending proposals, Republicans point out, will cost more than the United States spent on the wars in Iraq and Afghanistan, the general war on terror and Hurricane Katrina in the last seven years. And that’s before you throw in the $2 trillion fiscal stabilization plan.

        “This is big government, man,” McConnell exclaimed, his matter-of-fact manner giving way to sheer amazement. “It makes previous attempts at big government pale in comparison — they’re going to go beyond the New Deal and the Great Society by far.”

        The new spending guarantees that the problems that so disturbed Pelosi and Reid just a couple of years ago — high interest payments and an increasing number of foreign debt-holders — will get worse. Yet so far, the Democratic leaders have refrained from using words like unpatriotic, irresponsible and dangerous to describe Obama’s budget.

        Of course, they would never use such phrases to attack their own team. But the most important thing to understand about Pelosi and Reid is that while their rhetoric has changed, their substance hasn’t. Back in the Bush days, when they were denouncing Republican over-spending, they were also pushing the congressional leadership to spend more, not less, on just about everything. Now, returned to power, they’re doing the same thing. Only bigger.”


  6. Arthur:

    I disagree with you about Wall Street. These people produce profits which are vital to a family, business or nation. Excess profits do not last as competion moves in.

    It is unions, government people, etc. that are a drag because they do not produce a profit.

    Also wall street business types tend to be honast or their influence will sink to zero. Lefties cannot grasp this last.

    I believe in a completely free economy with a strong antitrust component.

    I believe in conservatism with government (not libertarianism). In other words I believe in what made America great.

    The cost of big government lays on the back of the laboring man and cuts his income.

    Somebody has to pay this cost and it is all the people including you and me.

    • I must agree with you there Ron.

      The USA became the world leader it is by unlocking the innovation and productivity of its people, not by shackling them with huge taxes.

    • Ron wrote:
      [I disagree with you about Wall Street. These people produce profits which are vital to a family, business or nation. Excess profits do not last as competion moves in.]

      Ron, of course, getting $200 million in bonuses are vital for the Wall Street executives’ families. I am happy for them, but I don’t understand why I had to pay for their happiness.

      What I wonder is why the US government forces poor teachers, shopkeepers, plumbers, who make #80,000 per year, to bail out these Wall Street firms and their executives with taxpayers’ money, which in turn take this money and pay themselves and their Wall Street subordinates tens of billions in bonuses.

      Are you saying that the $20,000 that a teacher is forced to pay in federal taxes is not “vital” to his family, and that it is better used when redistributed as $100 million bonuses to Wall Street executives?

      [I believe in conservatism with government]

      What you believe in is Big Brother’s redistribution of income: robbing the poor to pay the bonuses to Wall Street executives.

      Government’s bail-out of failed Wall Street and Detroit corporations is anti-free-market socialism, based on the idea that the corporation executives are entitled to $billions in bonuses even if they drive their companies bankrupt, while the middle class are required to pay for these bonuses with their hard-earned money.

      What the taxpayers are forced to do is to write out a free trillion dollar option to Wall Street: when the going is good, the Wall Street makes tons of money, and pays most of it out as bonuses to themselves. But when they lose all their money, the government steps in, bails them out, and lets them pay the same bonuses to themselves anyway, even though they had gambled away.

      To repeat: government bail-outs of corporations and corporate gamblers with taxpayers’ money is anti-free-market communism. And you are an anti-free-market communist.

      • Ron,

        Sorry for being overly verbose.

        Just explain to me: why do you think that middle class’ taxes should be used to pay bonuses to Wall Street executives, who had driven their companies to bankruptcies?

        • Ron,

          Also sorry for calling you a “communist”. I get exasperated when I see somebody, who otherwise advocates the free market, approves that incompetent executives pay themselves bonuses from bail-outs funded by the taxpayers. This is a travesty.

    • Actually Ron, it may be people like you and me, but don’t include Arthur with us. He accidentally admitted he is a Russian

  7. Also Arthur:

    Don’t argue with Andrew. He will lay both of us low.

    • Ron,

      You exaggerate Andrew’s skills. At a first glance, his ability to post thousands of lines of text seems impressive. But it would be impressive only if he read all the text he cut-and-pastes. But he doesn’t. He just reads the first few lines, that’s all.

      His purpose is to flood the threads with his spam, so that the readers would not be able to follow meaningful discussions. LR thinks that because he is a russophobe, he should be allowed to do whatever he wants. But the fact is that Andrew’s spam turns many people away from reading and commenting on this blog, and his spam often drowns out a lot of anti-Russian rhetoric.

      In fact, here is what russophiles can do. Say, there is a thread that exposes Russia in a bad light. A russophile can post a little 2-line article, saying something like “Georgia, New Zealand and England are terrible countries”, and Andrew will dump a 1,500 line spam, shutting down this thread to a screeching halt. Very convenient.

      • Actually I do read it Arthurina.

        I post the articles in entirety so that I can;t be accused of selective editing (selective editing is something Russophile scum such as yourself do with malice aforethought).

        Of course, you are unable to support your opinions with anything other than Pravda or RT propaganda, so I can understand why you get a little upset when FACTS destroy your assinine arguments.

    • Ron wrote:
      [Don’t argue with Andrew. He will lay both of us low.]

      Andrew is a little child who has to put in his word into every conversation between adults around him. The more adults there are around, the more he has to run around in order to budge in on and spoil every single conversation going on.

  8. Andrew,

    Give me a break. Don’t pretend to be even more stupid than you are. Numerous people have pointed out to you that if you post the URL link, the people, who want to read the article in its entirety can do so simply by clicking on it.

    But few, if any, do that. Imagine that you want to provide a reference for, say, the number of Germans killed in WW2. So, you find a book that deals with these numbers. Now what do I, as a reader, would want to see from you? The sentences that give the relevant numbers and the URL link for me to explore the context if I wished so. But you, instead, cut-and-paste the entire book from cover to cover. First, this floods the blog. Second, you don’t even tell the reader where to find the exact sentence that you want to quote. So, the reader has to read the entire book, pasted by you, and to guess for himself which particular sentence you wanted to him to see.

    Does anybody read the books pasted by you? I doubt it. I personally skim your posts for 15 seconds to see if anything curious strikes me. And then I respond to that one thing that popped out. And I bet most readers read even less of your spam than I do.

    Do you yourself read the volumes that you paste here? No. As I observed a couple of days ago, you paste everything from that web page without reading, including ads and links like “For other topics see this and that” “Share with a friend”, etc, etc. You don’t read the texts that you yourself post. So, do you really think that anybody else does?

    Why do you do this? Why do you not give a damn that you are destroying LR’s blog? I am not sure. My guess is that it stems from your personality” you are a childish, infantile and selfish being, who doesn’t give a damn about anybody but yourself and your base needs.

    • Of course, its OK for you to post screeds of unrelated rubbush or childish Russian propaganda from RT & Pravda.

      Really Arthur, you have all the hallmarks of the spoiled Russian brat.

      Of course, Russians are not known for charity, hospitality, or helping others in need.

      They are good at taking from others however, taking away life, liberty, and the pursuit of happiness from others seems to be the Russian national passtime.

      Why are you so angry? Did Daddy lose his party job when the USSR collapsed?

  9. Arthur:

    Middle class taxes do not go to corporate executives.

    The stockholders via the board of directors willingly pay the management team huge money because they believe the management team will come through. There is extreme competition for the most skilled managers because such managers are in such short supply.

    Take second best and presto earnings fall off and the dividend is cut.

    • Ron,

      Look, Ron, your argument above applies only to situations when we have free markets. Free markets are great.

      But the US government is ANTI-free market.

      Free market means that companies, that perform great, prosper; companies that fail – disappear.

      So, why is it that when Wall Street companies fail, the government bails them out? This is pure socialism.

      The truth is that it doesn’t matter one bit if the executives of Wall Street companies are wise honest men or irresponsible gamblers. Actually, it is better, in mathematical expectation, for the Wall Street revenues if the executives are irresponsible gamblers.

      Imagine that you are an investor with 1 billion to invest. You have 2 alternatives:

      1. Buy government bonds and make 3% in a year with probability 100%. You will make 20 million.

      2. Invest you money giving mortgage loans to bankrupt jobless individuals at 10%. With probability 5%, you will collect your 10%. With probability 95%, you will lose all your money, and the government will bail you out by paying you 1.1 billion.

      Which course will you choose? Invest responsibly in government bonds or gamble your money giving loans to bankrupts? Of course you will choose the latter. Because you are not gambling with YOUR money. You are gambling with TAXPAYERS’ money. You yourself are guaranteed to keep your principal and make 100 million no matter what.

      When the government guarantees Wall Street profits no matter what they do, the stockholders will be electing the most irresponsible gamblers to head these companies. What’s the risk? When the gamble fails, the taxpayer will compensate the company for the loss.

  10. Ron,

    Tell me, if I start my own business and fail, should the government bail me out?

  11. Ron wrote:
    [Middle class taxes do not go to corporate executives.]

    Are you serious?! Here is how it goes:

    A middle class person paid his taxes. These taxes went into the Federal budget. Out of this budget, several hundred billions were given to Wall Street companies. Thanks to this, Wall Street companies make profit. But instead of using these profits to repay the taxpayers, the Wall Street executives paid themselves close to 100 billion in bonuses.

    So, how is it that the middle class taxes did NOT go to corporate executives?

  12. The actions of nutso Obama does not count.

    Only one or two companies received that kind of money from the wacko ding-a-ling occupying the White House.

  13. Ron,

    Now you are acting silly.

    The amount of bail-out – $hundreds of billions – is enormous.

    In any case, had AIG been allowed to fail, each and every other major Wall Street firm – including Goldman Sachs – would have gone bankrupt as well, because they were stupid enough to enter into multi-trillion over-the-counter deals AIG as a counter-party.

    Bottom line – the bail-out was huge, it was anti-free-market in nature, and its essence was to re-distribute income by robbing the average Americans and giving their money to financiers.

    To prevent this, we need to establish something like FDIC insurance, in which Wall Street firms are required to pay huge insurance premiums in profitable years, to be paid out to them in loss years, at the points when they face bankruptcy.

  14. Arthur:

    Prove that “Wall Street” got that money. Don’t just say it. Prove it.

    Pelosi did the whole budget in the middle of the night. The democrats stole the money when they had the chance. They decided to do it and tough out the consequences.

    The Pelosi – Obama crowd are destroying the democratic party. Which is the only good thing coming out of all this.

  15. Arthur said, “Tell me, if I start my own business and fail, should the government bail me out”?

    No bail outs, Arthur (now I see where you are coming from)

    We let everybody sink. All the people (or business) deserve is freedom and low taxes.

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