MEET THE THREE ECONOMIC STOOGES (Dizzy in High Places)

BANZAI7 REPORT--U.K. Prime Minister Gordon Brown told a meeting of finance chiefs in St. Andrews, Scotland yesterday that a "Tobin Tax" on speculative trading could prevent excessive risk taking and fund future bank rescues, adding momentum to a debate begun by France.

U.S. Treasury Secretary Timothy Geithner said a “day-by-day” tax on speculation is “not something we’re prepared to support.”

PAUSE.......

A Tobin Tax may or may not be the solution. But one thing is certain. In Europe policy makers and politicians seem to be genuinely struggling to do something about the ignoble industry that brought the world economy to its knees roughly one year ago. They are clamoring about bonus caps, dismantling systemically risky financial giants (remember Glass Steagall?) and outlawing certain kinds of dubious activity.

Meanwhile, back at subprime ground zero, the three economic stooges (Messrs. Summers, Geithner and Bernanke) are too busy stimulating Wall Street bonuses to come up with anything that remotely resembles a regulatory solution with teeth.

These butlers, puppets and bag men for their Wall Street masters have so far suggested a special council of regulators to make decisions about how to do what Hank Paulsen managed to do last fall the next time we are faced with systemic hydrogen bomb like A.I.G. It won't be necessary to worry about how to prevent such a bomb from developing since in their view, voluntary guidelines for banker compensation will balance risk incentives.

Meanwhile, Paul Volcker, who is advocating a big bank bust up a la Glass Steagall, is politely waved off as a crusty old curmudgeon.

The plain truth is no one, let alone a council of idiots, will have the foresight or political will to call the next bubble (which BTW has already arrived). That is why laws like the Glass Steagall Act were passed many bubbles and crashes ago? Regulatory prophylactics is what it is called. It seemed to be working fine until the Free market Taliban had their way. Now all we are left with the regulatory version of the rhythm method.

Now it is time to decide. Do we want to risk another explosion that will make September 2008 look like a Pee Wee Herman episode, or do we want to throw out the three stooges and start fresh.

Unfortunately, it seems apparent what is going to happen. Mr. Obama and his party of fools will have a tough time next year. They are going to wind up needlessly fencing with the kooks and morons led by Limbaugh and Palin.