Mike Mayo, finance analyst and author of Exile on Wall Street, has been named on Worth Magazine’s list of the most powerful people in finance. On the Goldstein on Gelt show, Mike talks about the changes that need to be made in the world of finance, the recent world finance crisis, and what’s happening on Wall Street today.

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We wonder about the endlessly volatile markets and also (not often enough) about plainly unequal distributions of national wealth, but are the nation’s official policy responses based on correct views of classical economic theory? In particular, what about Adam Smith and his oft-quoted arguments for “free market capitalism”? More than any other classical theorist, Smith has been embraced by conservatives.

In brief, Smith reasoned, always capably and persuasively, that a system of private property, though naturally unequal, could still permit the poor to live tolerably. Rejecting Jean Jacques Rousseau’s contrary position that in commerce, “the privileged few…gorge themselves with superfluities, while the starving multitude are in want of the bare necessities of life,” Smith saw in capitalism not only an enviably rising productivity, but also the ultimate prerequisite for political liberty.

Adam Smith published his Inquiry into the Nature and Causes of the Wealth of Nations in 1776. A revolutionary book, Wealth did not aim to support the interests of any one class over another, but rather the overall well being of an entire nation. He discovered, as we all know, “an invisible hand,” an unsought convergence whereby “the private interests and passions of men” will lead to “that which is most agreeable to the interest of a whole society.”

Through capitalistic modes of production and exchange, reasoned Smith, an inextinguishable social inequality might still be reconciled with broad human progress.

Significantly, however, today’s conservative defenders of Smith usually ignore, either deliberately or unwittingly, the full depth of his relentlessly complex thought. A system of “perfect liberty,” as Smith called it, could never be based upon any encouragements of needless consumption. Instead, he argued, the laws of the market, driven by competition and a consequent “self-regulation,” strongly demanded a principled disdain for all vanity-driven consumption. “Conspicuous consumption,” a phrase that would be used far more effectively later on by Thorsten Veblen, could therefore never become the proper motor of economic or social improvement.

Adam Smith understood the dynamics of conspicuous consumption, but he disliked them altogether. For him, it was only reasonable that the market regulate both the price and quantity of goods according to the final arbiter of public demand. Yet, he continued, this market ought never to be manipulated by any avaricious interferers. More precisely, Smith excoriated all who would artificially create or encourage contrived demand as mischievously vain meddlers of a “mean rapacity.”

Today, of course, with engineered demand and hyper-Consumption as both permanent and allegedly desirable market features, we have lost all sight of Smith’s “natural liberty.” As a result, we try, foolishly and interminably, to construct our economic recovery and vitality on sand. Below the surface, we still fail to recognize, lurks a truly fundamental problem that is not political, economic, fiscal or financial. Instead, as Adam Smith would have us understand, it is a plainly psychological or human dilemma, one we should acknowledge can never be resolved by either Barack Obama or Mitt Romney.

Wall Street’s persisting fragility is largely a mirror image of Main Street’s insatiable drive toward hyper-consumption. This manipulated drive, so execrable to Adam Smith, has already prompted certain learned economists to warn repeatedly against saving too much. Could any advice be more ironic?

Whether Democrats or Republicans, all voters believe our national economic effort must always be oriented toward buying more. No one seems to ask, Exactly what sort of society can we expect from an economic system based on imitation and conformance?

Contrived demand has not always been a basic driver of our economy. Before television, and before our latest social networking gadgets, such demand could not have had any such overwhelming power and effect.

Writing in the middle of the nineteenth century, the American Transcendentalist philosopher Ralph Waldo Emerson spoke presciently of “self-reliance.” Foolish “reliance upon property,” Emerson had understood, is the unwanted result of “a want of self‑reliance.”

Now, living apprehensively amid a literally delirious collectivism, the ever-fearful American wants, more or less desperately, to project a “successful” image. This projection, in turn, remains founded upon material acquisition of “all the right things.”

In the final analysis, as Adam Smith himself would have understood, it will be the relentlessly conformist call of American mass society that critically undermines our core economy.

The First International Wall Street Downfall Cartoon Festival in Tehran, showcasing caricatures from different countries, awarded first prize to an entry depicting three religious Jews praying in front of a Western Wall that’s been transformed into a Wall Street bank.

The festival didn’t get much attention, because it’s July and most anti-Wall Street zealouts and anti-Semites are at the beach. But then the Anti-Defamation League found out about it and it was off to the races, as it well should be.

First, because the cartoon really is nasty, or as Abraham H. Foxman, ADL National Director, put it: “Once again, Iran takes the prize for promoting anti-Semitism. The winning cartoon takes the most sacred site in Judaism and perverts it into a shrine of greed. It is offensive on so many levels.”

He’s right, although I don’t personally believe that anything should be verboten for satire, including, of course, the prophet Muhammad.

Mahmoud Mohammad Tabrizi from Iran won the top prize (5000 euro, a letter of appreciation and the festival’s statue), and Alexi Kostofsky from Ukraine and Farhad Rahim Qara-Maleki from Iran stood the second and the third (4000 euro, a letter of appreciation and the festival’s statue, and 3000 euro, a letter of appreciation and the festival’s statue, respectively).

The 4th to 10th winners each received 500 euro, a letter of appreciation and the festival’s statue. Meantime, all the 70 finalists were granted letters of appreciation.

It’s a crying shame, though, that the Fars news agency, the festival’s co-sponsor, and the judges, couldn’t get over their anti-Semitic impulses, because the rest of the works are fabulous. So I decided to let our readers take a look and appreciate some dirty commie cartoons, in addition to the Nazi one.

Because good art shouldn’t go unwatched…

The ADL reminds us that in 2006, the Iranian government sponsored a Holocaust cartoon contest in which the winning entries used Holocaust images to deride Israel. That one was way nastier.

Is there such a thing as too many metaphors for the triumph of the human spirit packed into one sidewalk, especially such a crowded sidewalk near Wall Street (add that, too, to the mix, wrap in an American flag and call it a day?). But I’m probably being too cynical. It’s actually a heart warming story.

The Daily news reports that the Anne Frank Center USA, on Park Place and Church St., near the Freedom Tower and the Ground Zero Mosque, opened its doors last Thursday to Holocaust survivors, guests and a class of fifth-graders from Public School 43 Jonas Bronck in Mott Haven.

The kids spread across the exhibit, examining the simulation of Anne’s bedroom, family photographs and cites from her diary on the bright orange walls. They read Anne’s diary on iPads, although some of them said they had already read it several times.

Barack Obama’s 2012 New Year’s Resolutions

* Obama will eliminate Welfare by requiring all poor people to move in with rich people.

* Obama will further reduce our military budget to forestall a crisis where he has to curtail his vacations.

* Barack Obama will have a teleprompter installed in his kitchen so he can tell his wife what he wants for breakfast.

* Obama will stimulate the economy by hiring more czars.

* For his next election Obama will choose a running mate who knows more about running the country than he does — like, Nicole “Snooki” Polizzi.

* Obama will push through a bill requiring all Americans with more than three teeth to buy dental insurance. Those who refuse will be fined and get their teeth knocked out.

* To finally put to rest all questions of his eligibility to be president, Obama will make Kenya the 58th State, retroactively. (If you’ll recall from the first time Obama ran for president, he said he campaigned in 57 States. And the media made fun of Dan Quayle for misspelling potato in 1992. Go figure.)

* Obama will increase American productivity and reduce the threat of Chinese competition by initiating a student exchange program with China. Chinese students will teach Americans how to work hard, and American students will teach the Chinese how to smoke crack, curse, use condoms, and then complain about how others are getting rich.

* Obama will make it illegal for law enforcement to search drug dealers who’ve been coming across the Mexican border regularly for at least five years.

* Obama will require all drug runners to get CIA clearance and a background check to make sure they never worked on Wall Street before they are allowed to sell guns to the Mexican drug cartels.

* Obama will hold fund raisers to pay off our national debt. With the money left over he’ll do what he knows the American people want him to do — buy new golf clubs.

Barack Obama is not just the worst president ever in the history of the United States, he is probably the worst human being ever to occupy the White House. His bold faced lies are unparalleled in the annals of our presidencies. Virtually all politician lie. But few do it as shamelessly as Barack Obama.

It does not seem to bother Obama one iota even when he knows we know he’s lying. As long as we cant do anything about it, it seems to sit well with him. This is not just corrupt, this is wicked.

Every now and then you hear people say, “Oh, but he seems like a nice guy.”

A pleasant demeanor alone is not what makes a person. The values and principles behind the facade do. If someone robs a bank with a smile, does that make him a nice guy? Of course not.

The only thing Barack Obama has proven himself to be really good at is catering to the most ignorant of our society who don’t realize when they’re being taken for a ride.

Many of us are scratching our heads trying to make sense of the Occupy Wall Street movement and its sundry clones around the world.

With apologies to the comedian Jeff Foxworthy, who first made a name for himself with the refrain “then you just might be a redneck” (example: “If you have 24 pickup trucks and none of them work, then you just might be a redneck”), let’s examine the Occupy Wall Street phenomenon.

* If you refuse to recognize that every idea of Marx’s was debunked over 160 years ago, then you just might be a Wall Street Occupier.

* If you wear Nike shoes, designer jeans, and carry your smart phone to the demonstrations against capitalism, then you just might be a Wall Street Occupier.

* If you think the United States controls an empire, even though you cannot think of any colonies it owns, then you just might be a Wall Street Occupier.

* If you think other people must always be required to relinquish their material things so that you can pursue social justice and feel idealistic and righteous, then you just might be a Wall Street Occupier.

* If you consider your own property to be sacred while other people’s property should be used for social engineering, then you just might be a Wall Street Occupier.

* If you favor academic departments in which only enlightened leftist opinion can be expressed and where there is no room for non-leftist dissenting opinion to be heard, then you just might be a Wall Street Occupier.

* If you use the term Islamophobia often but never use the term Islamofascism, then you just might be a Wall Street Occupier.

* If you believe everything wrong with the world is because of the United States, then you just might be a Wall Street Occupier.

* If you think there is nothing useful to be learned from the fact that Cuba used to be the richest country in Latin America and today is the poorest country in Latin America, then you just might be a Wall Street Occupier.

* If you are not aware of the fact that Cubans steal boats to sneak into the U.S. but no low-income Americans steal boats to sneak into Cuba, then you just might be a Wall Street Occupier.

* If you think there is nothing we can learn from comparing the histories of East Germany with West Germany before the unification, or North Korea with South Korea, then you just might be a Wall Street Occupier.

* If you think all arguments can be settled by telling a non-leftist he
reminds you of Rush Limbaugh or Glenn Beck, then you just might be a Wall Street Occupier.

* If you support proposals that make real problems of the world worse, just as long as advocating them makes you feel caring and righteous, then you just might be a Wall Street Occupier.

* If you prefer that poor people in the Third World starve rather than embrace capitalism and live like you do, then you just might be a Wall Street Occupier.

* If you believe terrorism is caused by poverty, then you just might be a Wall Street Occupier.

* If you believe SUVs threaten life on earth, and more generally that the planet is in imminent danger of destruction unless everyone does what you want them to do, then you just might be a Wall Street Occupier.

* If you believe one country is rich and another poor because the rich country stole wealth from the poor country, then you just might be a Wall Street Occupier.

* If you demand social justice but have no idea how to define what it means or explain how to achieve it, then you just might be a Wall Street Occupier.

            Steven Plaut is a professor at the University of Haifa. He can be contacted at steveneplaut@yahoo.com.

Like many other families this past Sukkos, my husband and I took the kids to the park over Chol Hamoed. But we left our mitts and bats in the car when we arrived. This was a trip to Manhattan’s Zuccotti Park.

We were curious to see the much publicized protestors of Occupy Wall Street, and I wanted our kids to get a taste of “history” in the making. And, rest assured, this is a piece of history my kids will remember.

The first thing that greeted us as we parked our car several blocks away and got closer to the police barricades surrounding the park was the odor. It was a terrible stench that crept up on us and, both physically and figuratively, never left us until we moved out of the Wall Street area the protesters now claim as their own.

I repeatedly warned my kids not to touch anything as we navigated our way through clusters of sprawling protesters on grounds littered with empty food plates, grimy tarps propped up by poles to cover sleeping bags, and a distinctly strong smell of marijuana. It was dark when we arrived at the park and a large group of protesters were loudly and almost absurdly communicating via their “mic-check” system.

These Occupy Wall Street protesters were predominantly young and white. Most of them looked like college students from universities like the New School or residents of the Village. They did not exactly impress me as being “disenfranchised.” Indeed, the only truly poor people I was able to make out were a couple of homeless men eating donated food from a makeshift open kitchen, surely blessing their luck and hoping the supply won’t run out anytime soon.

I stopped some protesters and asked them what they hoped to achieve. I was dumbfounded. Apparently the caricature of brain-dead college kids hanging out in the park is not an exaggeration. The first several protesters gave answers in an inane and almost adolescent tone: “We want a better world.” “We want equality.” “We’re here for a better planet.”

Though we finally did strike up a conversation with one hardcore opponent of the capitalist order – a young psychology teacher with no real working knowledge of finance – most of the protesters simply struck me as Woodstock wannabes.

I was relieved when we left the park. Relieved to end a conversation with one of the protesters, a teacher who told us how proud he was to be part of “the 99%” – the protesters’ phrase for the percentage of Americans supposedly united against the one percent of our country’s top earners. It wasn’t “fair,” he claimed, for so few people to have so much wealth – never mind that many of them worked hard to earn it – and it was only “fair” to demand the government tax them further to ensure that everyone shares in that wealth.

What a difference from the last protest I took my daughter to – a Tea Party rally in midtown Manhattan. Besides the common bond of a shared philosophical affinity, there’s something comforting in taking your child to a gathering where you see a patriotic man dressed up as a founding father rather than a man holding a sign proclaiming “Queers love the 99%.”
The Tea Party rally was a G-rated event to which you could bring the whole family. It promoted family values over vulgarity, work ethics over entitlements, and independence rather than dependence for 100 percent of Americans.

As an Orthodox Jew I not only felt welcome but validated. Tea Party goers waved Israeli flags along with American ones, while Occupy Wall Street protests are laced with signs that read “Hitler’s Bankers,” “Gaza Supports the Occupation of Wall Street.” and “Congress Should Print the Money, Not the Zionist Jews.”

The difference between Occupy Wall Street protesters and Tea Party rally-goers is greater than just one group wanting more government intervention and one wanting less. It’s more than a difference between one group contesting American capitalism and one wanting to restore that capitalism to its earlier glory. It is an intrinsic conflict between two peoples and two social ideologies, between protesters with no real message who want to continue on the downward moral spiral that began in the 1960s and rally-goers yearning for the bygone era of “Leave it to Beaver.”

One cannot separate fiscal and moral values. They are intrinsically intertwined. Work ethics and work go hand in hand. Internalized values that restrict misbehavior and encourage good behavior cut across the spectrum of our daily lives. And caps set in place to govern social conduct and prevent misconduct are similar to caps erected to govern monetary behavior and prevent financial liability. Those bent on an agenda of accepting monetary entitlements and forcing others to grant them look for entitlements in other areas of life as well.

I didn’t just sense the difference between the rally at Zuccotti Park and the Tea Party. I felt it. And I resent the Wall Street protesters co-opting percentages of fellow citizens in their quest to collapse our existing capitalist and social structure. No – alas – I am not one of the “millionaires and billionaires.” But don’t lump me together with the anarchists in “the 99%.”

Sara Lehmann is a freelance writer and editor living in Brooklyn.

Like many other families this past Sukkos, my husband and I took the kids to the park over Chol Hamoed. But we left our mitts and bats in the car when we arrived. This was a trip to Manhattan’s Zuccotti Park.

We were curious to see the much publicized protestors of Occupy Wall Street, and I wanted our kids to get a taste of “history” in the making. And, rest assured, this is a piece of history my kids will remember.

The first thing that greeted us as we parked our car several blocks away and got closer to the police barricades surrounding the park was the odor. It was a terrible stench that crept up on us and, both physically and figuratively, never left us until we moved out of the Wall Street area the protesters now claim as their own.

I repeatedly warned my kids not to touch anything as we navigated our way through clusters of sprawling protesters on grounds littered with empty food plates, grimy tarps propped up by poles to cover sleeping bags, and a distinctly strong smell of marijuana. It was dark when we arrived at the park and a large group of protesters were loudly and almost absurdly communicating via their “mic-check” system.

These Occupy Wall Street protesters were predominantly young and white. Most of them looked like college students from universities like the New School or residents of the Village. They did not exactly impress me as being “disenfranchised.” Indeed, the only truly poor people I was able to make out were a couple of homeless men eating donated food from a makeshift open kitchen, surely blessing their luck and hoping the supply won’t run out anytime soon.

I stopped some protesters and asked them what they hoped to achieve. I was dumbfounded. Apparently the caricature of brain-dead college kids hanging out in the park is not an exaggeration. The first several protesters gave answers in an inane and almost adolescent tone: “We want a better world.” “We want equality.” “We’re here for a better planet.”

Though we finally did strike up a conversation with one hardcore opponent of the capitalist order – a young psychology teacher with no real working knowledge of finance – most of the protesters simply struck me as Woodstock wannabes.

I was relieved when we left the park. Relieved to end a conversation with one of the protesters, a teacher who told us how proud he was to be part of “the 99%” – the protesters’ phrase for the percentage of Americans supposedly united against the one percent of our country’s top earners. It wasn’t “fair,” he claimed, for so few people to have so much wealth – never mind that many of them worked hard to earn it – and it was only “fair” to demand the government tax them further to ensure that everyone shares in that wealth.

What a difference from the last protest I took my daughter to – a Tea Party rally in midtown Manhattan. Besides the common bond of a shared philosophical affinity, there’s something comforting in taking your child to a gathering where you see a patriotic man dressed up as a founding father rather than a man holding a sign proclaiming “Queers love the 99%.”

The Tea Party rally was a G-rated event to which you could bring the whole family. It promoted family values over vulgarity, work ethics over entitlements, and independence rather than dependence for 100 percent of Americans.

As an Orthodox Jew I not only felt welcome but validated. Tea Party goers waved Israeli flags along with American ones, while Occupy Wall Street protests are laced with signs that read “Hitler’s Bankers,” “Gaza Supports the Occupation of Wall Street.” and “Congress Should Print the Money, Not the Zionist Jews.”