Merv's Politically Incorrect Audio Blog

Yeah, we need to start over. I was in banking decades ago. Banks (including CUs and S&Ls) are regulated by a hodgepodge of agencies depending upon their charter: 1] Federal Reserve; 2] FDIC (you may have heard of them; 3] OCC (part of the treasury / secret service); 4] NUCA (for CUs); 5] OTS or Office of Thrift Supervision. (And now add bonus CFPB, created in 2011).**

The best one is the OCC. Those guys were tough, but fair. The last one, the OTS, fucked up during the mortgage crisis. Evidently the OTS didn't learn during the S&L scandal of the 1980s that implicated five US Senators for corruption (taking bribes), three of whom had their political careers ruined (today it probably wouldn't matter), two of them smart enough to escape it. https://en.wikipedia.org/wiki/Keating_Five

The OTS eventually got rolled into the OCC. FWIW, I worked as an independent auditor working alongside the Feds. OTS was a joke. We always knew that it was a joke so the lack of oversight on the part of the OTS that would have been the first stopgap to bad mortgage loans* was not unexpected. Some of the blame can be laid to the unholy alliance among GWB, Maxine Waters, et. al. that "all Americans should realize the American dream and be homeowners". That's like saying all Americans should able be to kick a 30 yard field goal.

What's worse, California also had their DFI, Department of Financial Institutions. They did completely nothing. All they did was shadow the Feds. In some instances I witnessed, they didn't even show up to audits. Conducted them remotely via email. This was in the 2000s, not post COVID! The DFI just looked like a farm for politically connected friends to hire friends and relatives. If the OTS wasn't very good, the DFI was downright incompetent. I imagine they still are because their existence is completely unnecessary and colossal waste of money for California taxpayers.

A radical school of thought - since we are on the downsizing agenda:

I've always wondered what would happen if the banks didn't have the Feds to bail them out, give them advice, push them in certain directions. Can you imagine bank CFOs (big or small) going to work everyday almost shitting in their pants, worrying about macro economic conditions and micro economics conditions (the bank's loans and deposits)? That would be great right? The CFOs would be truly earning their pay as opposed to being fancy accountants. The fact is, most medium and small bank CFOs suck, at least with respect to understanding broader risks. This is why SillyCon Valley Bank failed. (The execs at SillyCon Valley Bank did have an ironically great excuse: we did exactly what the Feds encouraged us to do, buy treasuries and mortgage bonds!)

Some level of regulation is good, but what I've described of what we have now is too messy, too redundant, too inconsistent, and too easily (badly) influenced by the Executive and Legislative branches.

In the meantime, the EEOC is suing small business Meathead Movers in California (they hire student athletes) for age discrimination. $15 million! And I walked by a Hooters at the San Antonio Riverwalk this weekend. Paywall, but read about it here from a respectable news organization: https://www.wsj.com/economy/jobs/a-...rs-feds-say-thats-age-discrimination-c50a773c

And don't get me started on Frank-Dodd and banks being "too big to fail". All we got now are banks "too big to fail" because of the legislation designed to guard against that.

And in the meantime, I read that Germany has like twenty tanks and enough artillery shells to last for two days. I don't even know why we bother protecting the EU. Not a Putin fan, totally feel for Ukraine, but the EU has to stop leeching off Americans (who basically work 40+ hours every week and never take vacations) for their defense. Stuff like this needs serious debate instead of blank cheques.

* When I was an auditor, I'd take a sneak peek into disciplines that were not my specialty. Let's say that lying on income for mortgage loans in the 2000s was rampant, and no one did a thing. In fact, I suspect the OTS encouraged it because the goal of politicians back then was to increase home "ownership".

** The proper approach would be to combine more of the agencies, but you know, inter-agency rivalries, turf, etc. The CFPB function should have been formally assigned to one the existing agencies, the FDIC would have been the best choice, with their charter modified very slightly to make the consumer aspect more explicit. The FDIC had this responsibility anyway. Oh wait, I'm thinking about how to run a tight ship, a real business. Nevermind.

 

It's actually not that tough. It's the result of years of disagreement between the two parties on developing a cogent policy as well as missteps in messaging to potential illegal immigrants hoping to get past the border. A lot of people who blame the left on illegal immigration don't realize that Obama was nick-named "Deporter-in-Chief". Deportations hit a nadir under Trump in 2017, but gradually went back up.

The United States is HUGE geographically, something that I am always reminded of when I am in the UK or EU. Texas itself is a large state. Add the New Mexico, Arizona, and California borders with Mexico. This makes it's practically impossible to build a wall or militarize the border. I don't want to single dollar of my taxes going to a wall because it would be just decoration.

The problem is like piracy with movies. The solution is to make it easier to buy than to steal. Or make legal immigration easier, that is a guest worker program, where they are allowed to work here for X period of time, but then go home for Y period. And then make it really clear publicly in no uncertain terms: no illegal immigration.

The fact is, we absolutely need many of those illegal immigrants. The vast majority are law abiding, extremely hard working, and take jobs Americans don't want. The problem is that left dislikes guest worker programs because this would be: 1) against the interests of their constituency, that is unions or lower-paid disadvantaged Americans; 2) creates a guest subclass which runs counter to the left's egalitarian principles. And the right dislikes them because of cultural issues, supposed crime, the fear of different, e.g. white-replacement theory. This being utterly ridiculous because where I live in South Texas, there are ton Mexican Americans who are the first in their families to attend college. (My daughter has two such friends from high school). Their parents came here as laborers hoping to give their children a better life. Their children end up as pure-blooded Americans (not speaking Spanish very well, LOL!), attending college, and pursuing the American dream. With respect to crime, it's well documented that illegal immigrants commit crimes at significantly lower rates than native-born Americans. Think about it - why would they risk getting sent back to Honduras, El Salvador, etc.

I just had a deck built in my backyard by a reputable company recommended by neighbors. Guess what, the five working bees didn't speak a word of English. I had to reconfigure my brain to get out a few words of Spanish to tell them that lunch and refreshments was on me. There's so much of this (laborer shortage) in almost every state in the USA.

In respect to shutting down illegal immigration there is actually a great method: crack down on employers. The fact is, this will never happen. Despite the right saying certain things, most politicians in that party secretly want illegal immigrants. This is because they provide cheap labor for meat factories and farms in the South and Midwest. Sure there are the occasional busts at the factories, but the owners just get a slap on the wrist. Start putting employers of illegal immigrants in jail or fining them in a way that truly hurts, and illegal immigration would come to an end. However, again, this just ain't commercially feasible. We Americans like our chicken, lettuce, and strawberries cheap.

Me personally, I'm all for a guest worker program. Get them on record so they can pay taxes. The cream of the guest workers can have a path to permanent residence and citizenship. Meritocracy. Nothing more American than that. (Besides we need the people to keep our population pyramid looking rectangular).

As for as fentanyl and drugs, I can't blame Mexico or China for that. Oh, I'm sure the China Communists under Xi are more than happy to send fentanyl precursor chemicals to Mexico as part of their plan to f**k us up, but the fact is, the USA is a rich country, the richest in the world, and this facilitates recreational drug use. Addiction is powerful and impossible to escape from for certain people. In a prior life, I had a friend die in the bathroom because of his addiction. Hid his drug shit in the laundry, inside socks. Nothing I could do to get him to stop. Got mad at him, called him a druggie, and he said that was a cheap shot. He was so desperate that he stole a watch my grandmother had given me as a gift to remember her by after she died. When he died, his family or I didn't blame Columbia, the Golden Triangle in Asia, or Bill getting blow jobs in the Oval Office. We all knew it was on to him. We all knew he didn't want to take personal responsibility. Heck, we weren't even sure it was him, because this is what addiction does to people.

The best way of out the fentanyl crisis is harsh punishment coupled with treatment programs. The left hates harsh punishment (too inhumane, targets disadvantaged peoples). The right hates treatment programs (too expensive, high relapse, just say no).

 

Ah ha! This is an excellent train of thought!

My answer to that is NOT AT ALL! There are cities where literally 90% are immigrants, where English isn't their first language, where most only speak broken English, yet somehow, they are Americans at heart.

• As others pointed out, the United States has always been a nation of immigrants. The Pilgrim Fathers came because England didn't f'ing want them and were hunting them down. Same deal with the Puritans. Quakers. A bit later on came the Catholics (Irish and Italian) - and Catholic was not a good word! Then a smattering of Germans and Eastern Europeans. Stopped for while until the late 20th century during the Latin America and Asian invasion (LOL).
• The United States isn't homogeneous like Japan, South Korea, Taiwan, Norway, Finland where everybody dresses, thinks, and writes exactly the same, so waves of immigration doesn't cause a "disturbance in the force". Funny anecdote: English cursive writing from my mom's generation in Taiwan looks exactly the same from person to person.
• What @YMO said, culturally the USA is somewhere between a salad bowl and melting pot, or one of them depending upon the specific context. It's said that the USA doesn't have a culture. This is true in that the USA is still a young country. However, it's untrue in that the culture of the USA has and is still evolving. I mean, I get 90% of USA SBAF readers know what Bi Bim Bop is. 80% Koobideh. 95% Xiao Long Bao. 70% Nihari.
• The USA being a young country with a lot of arable land (no food concerns) and natural resources (including from Canada) provides for a strong foundation for growth, meritocracy, and risk taking. Elon Musk (although he's probably now insane), Bozos, Gates, Huang (NVIDIA), Page and Brin, that these guys were incubated in the USA is no accident. It'd say that it's this American spirit that molds immigrants into Americans.
• By far and large, the people the USA has let in (legally or illegally) have cultures compatible with American culture, which is entrepreneurial. People who want to come here are usually uncomfortable in their home countries for whatever reason, and willing to be risk takers, eat shit, swallow bitter (Chinese phrase). Sure, we are going to get immigrants where their kids will say stuff like "no way my dad would let me date someone outside the community, black, white, etc.), but by the time the second generation comes around, these attitudes disappear (and the old school parents just need to deal with it).
• The United States is a f'ing big big big country geographically with beautiful land. North, South, East, West, and everywhere in between. It's all beautiful especially if you love the outdoors. Forests, mountains, hills, rivers, lakes, plains, deserts. No swaths of frozen tundra or impenetrable rock. It takes weeks to take a cross country trip. I think of 20th century American classical music with the long lines and hopefulness. There's definitely something about the geography that accounts for the American spirit!

Yeah, I bitch about bad policy decisions, but this is the nature of the representative democratic system. It totally sucks. But it's better than all other systems. Arguably enlightened dictatorship like in Singapore could be better, but that has downsides too (it's not like Singapore had a choice - they could have just as easily ended up like Gaza if they played their cards wrong).

If I sound like an optimist, it's because I am. Grievance doesn't get one anywhere. For all our troubles, I'm in the AIG camp. America Is Great.

 

Yes, and our government is actually very very good at collecting data. Tons of it. Even more if you know where to look. All gathered by career numbers people. Money supply, inflation, drug usage, drug deaths, crimes, deaths vs expected deaths, bad loans, etc.