S. Gensler's Politically-Motivated Attack on Intrade
Michael S. Rozeff
by Michael S. Rozeff: Homegrown
Terrorism and Terrorism by Association
"deep government" runs the government and America. The
deep government consists of government bureaucracies (agencies,
departments, offices, etc.), lobbyists, campaign contributors, political
appointees, influential media figures and companies, academics,
university centers and schools, foundations, key corporate figures,
Gary S. Gensler
is a member of the deep government. He's the head of an agency most
Americans have never heard of, the CFTC or Commodity Futures Trading
Commission. It used to be a sleepy backwater that did very little,
but with the advent of huge amounts of trading in derivatives (futures,
options, swaps), its power has grown. Gensler's
biography raises many questions, while illustrating the corrupt
nature of America's governing institutions. Men and women who, by
their training, their livelihoods, their personal debts to others
as they climb to power, and their positions in deep government,
cannot be impartial. They cannot escape being in the "old boy"
network. They cannot escape having conflicts of interest, as they
move from industry to regulator and back again to industry. This
environment does not produce objective or dedicated public servants
who have the public welfare in mind or heart. Government by experts
is a myth. We have government by people trying to get ahead and
rise to the top, and they will do what they have to do in order
to maintain their positions and look good. They have to learn how
to contend with attacks from their rivals in deep government who
are playing similar games.
a brilliant man who learned finance at Wharton and practiced it
at Goldman Sachs. This qualified him as a plutocrat fit for government
oversight of the financial sector. Parenthetically, Bernanke's route
was through academia, which is another deep government feeder operation.
come under attack by several members of Congress. Bernie Sanders
criticized his position on lax regulation of credit default swaps
and tried to block his appointment to the CFTC by Obama. A year
ago, his ties to Jon Corzine were questioned by the House oversight
committee. Corzine, it will be remembered, is the reckless crook
(embezzler) who headed MF Global, who lied about MF's financial
health while it descended into bankruptcy, and who shifted money
out of customer accounts in a vain attempt to save the company.
That money has never been recovered. Corzine was another Goldman
Sachs alumnus and another player in the deep government.
figures are under attack, their best defense is often offense. Gensler
has brought suit against a perfectly innocent, harmless and very
useful business operation, namely, Intrade. Intrade operates prediction
markets. By doing this, Gensler shows that he is in charge and that
he's not a lax regulator, as Sanders painted him. He overcomes his
bad Corzine press and association by showing that he's tough on
gambling. He reinforces his credentials as a government mercantilist.
matter if the CFTC wins or loses its lawsuit. The case will soon
be tied up in talk and litigation and fade from the headlines. Gensler
will have diverted attention from his troubles and shown himself
to be a man of action who is governing. He will be rebuilding his
reputation within the establishment circles in which he travels.
immediately informed its American customers that they will have
to close down their accounts because of this regulatory attack on
Intrade. American bettors will no longer be serviced by Intrade.
The CFTC has the power to hassle
an Irish company. The CFTC is preventing Americans from trading
with other Americans or with other non-American customers of Intrade.
This is another instance of the conflict pointed out by Gary North
rival camps are divided by rival systems of economic sovereignty.
The gold bugs favor the sovereignty of the free market. The anti-gold
bugs favor the sovereignty of the banking cartel, which is the
joint creation of the federal government (Federal Reserve) and
the states (state bank licensing).
This is a
replay of the arguments of Adam Smith against the arguments of
the mercantilists. It is the logic of widespread, decentralized
private ownership and voluntary contract versus the logic of government
licensing, barriers to entry, and the legal right to counterfeit
for what I believe are political and personal reasons, which cannot
be separated in the case of members of the deep government, stands
for government licensing of prediction markets. The CFTC will enforce
barriers to entry. The behind-the-scenes cartel consists of existing
exchanges which prefer to see all speculation channeled through
their doors, and it consists of regulators anxious to maintain the
power of setting the rules for these exchanges. If Intrade slips
through, it's a challenge to that power. Government stands against
the free market built by Intrade. It stands against voluntary trading.
Government is not the protector of Americans, it is thwarting decentralized
trading. The fundamental reason behind this is to maintain privileges
and power of those in deep government.
S. Rozeff [send him mail]
is a retired Professor of Finance living in East Amherst, New York.
He is the author of the free e-book Essays
on American Empire: Liberty vs. Domination and the free e-book
The U.S. Constitution
and Money: Corruption and Decline.
© 2012 by LewRockwell.com. Permission to reprint in whole or in
part is gladly granted, provided full credit is given.
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