Greenberg and Kudlow Get It

RUSH: Audio sound bite time. I said yesterday, you want to fix AIG, go back and get Hank Greenberg in there, Maurice Hank Greenberg, he’s the guy that built it. He showed up with Neil Cavuto yesterday on the Fox News Channel. Question: ‘The argument was as you know that we were too loose with regulation, and that led to all these problems.’

GREENBERG: What is regulation? You can’t replace management with regulation. Management is still responsible in the final analysis. If you do the right risk management and you have the right controls, then regulation is not going to make a difference there. If you have poor management, you can have all the regulation in the world and that’s not going to change anything. And so, you know, my guess is that the problems that have come about have been management problems more than regulatory.

RUSH: Amen! Now, we have to admit he’s got a little axe to grind because they forced him out of there on these bogus charges that Eliot Spitzer drummed up, none of it ever even consummated, but Greenberg was forced out under pressure by Eliot Spitzer while at the same time Eliot Spitzer’s out there making whoopee with the hooker. Nobody knew it at the time. But the point is here, all this regulation can gum up the works. But the point that regulation cannot substitute for poor management, that’s right on the money. And, you know, that gets to one of the central problems that we are facing, and that is that too many American people, too many in our population believe that the government, which, regulation, onerous or otherwise, can fix things simply by telling people how to straighten out their mess or preventing them from doing bad things, when in fact the responsibility goes to people with hands on. You have good management, bad management, bad management screws up, and his point is there’s no regulation that’s going to compensate for bad management. Just isn’t going to happen. Yet everybody thinks, or too many people think that that precisely can be the case, that regulation can prevent any kind of downturn, that regulation can prevent a recession, regulation can prevent the stock market going down too much and so forth. Of course nothing could be further from the truth. Maurice Hank Greenberg, who was the former CEO of AIG. Now, this morning on Joe Scarborough’s show, MSNBC had Larry Kudlow, and Kudlow had this to say about Wall Street and the loan crisis.

KUDLOW: The Community Reinvestment Act, which was passed in the mid-nineties, which was extended in the early 2000s, pushed these lenders to make low-income loans —

SCARBOROUGH: You cannot blame this on low-income people —

KUDLOW: No, I’m —

SCARBOROUGH: — that are getting a house. You say poor people have caused this crisis?

KUDLOW: I didn’t say — listen to what I’m saying. Not poor people. Members of Congress, who are rich people. But their liberal guilt consciences forced banks —

SCARBOROUGH: Okay.

KUDLOW: — and lenders to make lousy substandard loans —

SCARBOROUGH: You’re saying loans to poor people — then let me rephrase —

KUDLOW: Not everybody is — is — can afford a home, Joe, some people —

BRZEZINSKI: And they should be told that.

KUDLOW: Thank you, Mika, thank you.

RUSH: They have to be told that? Joe, what happened to you here on this? Kudlow says he wasn’t indicting poor people. Joe, a good friend of mine, as they say in Washington, and he is, Joe Scarborough, but he fell right into the trap making Kudlow’s point here. Kudlow’s point says that liberal guilt, their consciences — I think it’s a little bit more than that; there’s a lot of guilt here, because there’s also a desire to just screw things up. This is buying votes. This is passing around walking-around money to people who aren’t walking around anymore. They’re stationary. This is another way of passing out walking-around money without having to send Al Sharpton out to the neighborhoods to dole it out. Just came straight from Fannie Mae and Freddie Mac, in the form of a house, for crying out loud. Now, you don’t sit there, you don’t blame them, of course. I mean, talk to a beat cop, anybody in the neighborhood giving something away, you got a mob. We had a mob, we were giving away houses for all intents and purposes. Nobody’s blaming them. It’s the policies that put this into place.