Thursday, April 28, 2011

Can Paul and Johnson Save the GOP?

In recent days Congressman Ron Paul (R-T) announced that he is establishing an exploratory committee for his presidential bid and Governor Gary Johnson (R-NM) announced his own candidacy. These two reformers, who advocate elimination of Fed power or its reduction, have to contend with Wall Street Progressivism, which is likely to defeat them within the GOP.

Two days ago, The Wall Street Journal carried a front page story announcing "Financiers Switch to GOP." Three years ago I had suspected that Wall Street, which had heavily supported Obama, would dump Obama after his granting them trillions in subsidies and his supporting Fed policies that will, over time, cause inflation and ever greater transfers of wealth from people who work and are on retirement pensions to hedge fund managers and America's non-productive financial class. During 2008, Wall Street supported Obama because a Republican could not have achieved the massive wealth transfers that they required, for the Republicans by then had been associated with excessive support for the super-rich. To obtain the massive subsidization Wall Street required the left's support. Obama presented the image of a Black activist, a "progressive" socialist who would fight the rich. Many Republicans naively believed this. In fact, Wall Street had contributed to Obama two to one over McCain, who was associated with Bush.

Obama's supporters, New York Times readers and college students, believed that Obama would redistribute wealth from the wealthy to the poor. Obama's opponents believed that Obama would redistribute wealth from the middle class to the poor. In fact, Obama has redistributed wealth from the poor and middle class to the wealthy.

He has done his job well. During Obama's administration the transfers from the Federal Reserve and the US Treasury to banks and global financial institutions amounted to $12.8 trillion according to Bloomberg, but are likely much more. Three years ago I predicted that by now Wall Street would have thrown Obama under the bus because he would no longer be needed. His alliance with the left is inconvenient to Wall Street. The progressive left will continue to attack Wall Street while Republican Progressives will not. Thus, The Wall Street Journal reports that hedge fund managers, "who made a big bet on Barack Obama...have turned their backs...and are actively supporting Republicans." The article cites Daniel Loeb, who had raised $200,000 for Obama and who, Democratic reports, earned $250 million in 2007 alone. The Journal reports that Loeb is a long time Democratic Party supporter, but he has switched to the GOP this year.

The Journal reported a few weeks ago that Mitt Romney had met with 100 Wall Street bigwigs to obtain financing and to offer to do their bidding. Clearly, Wall Street will aim to push for a Progressive GOP in 2012. If rank-and-file GOP members go along with it, they will elect another George W. Bush, probably worse.

There are three strategies for pro-freedom Republicans. The first is to vote for Paul or Johnson in the primaries. If they lose, option two is to support a third party. Option three would be to support Obama as the lesser of two evils in 2012.

1 comment:

Doug Plumb said...

$250 million sounds like chump change. Maybe this guy doesn't have the genetics to cut it in the big arena of hedge fund managers.

The average wage is around a billion for the top guys, see