I sent this letter just now to the New York Times:
Gov. Eliot Spitzer says
that his patronage of prostitutes is a "private matter" ("Spitzer Is
Linked to Prostitution Ring," March 10). He’s correct; that matter is
between himself and his family and is no one else’s business. I wish
only that Mr. Spitzer understood that many of his most famous crusades
- for example, against musical-recording companies aggressively
marketing their products, against banks lending money to lower-income
consumers, and, indeed, even against prostitution rings(!) – were
crusades against behaviors that in each case is a "private matter."
If
Mr. Spitzer wants us to butt out of his private affairs, he should from
here on in set an example by butting out of everyone else’s private
affairs.
Sincerely,
Donald J. Boudreaux
Of course, Spitzer is a professional busy-body, so he’s unlikely to mind only his own business even as he asks us to mind only our own.
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"…against banks lending money to lower-income consumers,…"
Nope…no way… Banks function because of the federal treasury and they have the priveledge of the backing of the the US government.
We are now seeing a financial meltdown because we specifically allowed deregulation of the banking and finance industry. Now millions are being caught in all forms of predatory lending and financial wizadry with the backing of the US government and its tax payers.
What is needed is more oversight not less.
It's not a private matter because it is against the law. Since Spitzer, as Attorney General and then Governor, has been responsible for enforcing the law–that is a serious problem.
If Mr. Spitzer had been opposed to the laws against prostitution, then I might look at his situation a little differently. He would still be a law-breaker, but he would at least not be a hypocrite.
But he has in fact been a vocal supporter of the laws against prostitution. As the Times reprts, "In one such case in 2004, Mr. Spitzer spoke with revulsion and anger after announcing the arrest of 16 people for operating a high-end prostitution ring out of Staten Island."
This says a great deal about Mr. Spitzer's character and his attitude toward the rule of law. It also says that he is not fit to be the governor of New York or any other state. He might fit into Hugo Chavez's government in Venezuela, though.
If Spitzer had not made a career of destroying lives for actions such as this I would feel bad for him (except maybe for the whole having a wife thing). Prostitution may be against the law, but that doesn't make it wrong. However, here it's just a cse of Spitzer being hoisted by his own petard. Whatever that actually means.
I love it whenever any politician or bureaucrat steps in his own trap.
David Hays
Grand Coteau, Louisiana
Spitzer went after anything that moved. He threatened to break people's kneecaps if they didn't pay up so that he could look like a white knight. Not a single case, save Dick Grasso's, went to trial and common legal opinion is that Spitzer wouldn't have won any of them. Only Grasso stood up to Spitzer. Now, it's Cuomo's job to prosecute the Grasso case and, predictably, the state is losing its case.
You'll forgive me if I delight in the downfall of a man who forcibly extracted Billions in "protection" money from shareholders. And I do delight in that sleazy bastard's downfall.
Why is it that politicians can't keep their dicks in their pants? I know of a MN state senate candidate whose mistress caught him with his girlfriend and told his wife.
But muirduck will defend this cretin to the ends of the earth.
I think this is why the Germans invented the word Schadenfreude.
I’m with Methinks.
Guy is a scumbag.
You gotta wonder though, how many Wall Streeters (Dick Grasso?) pooled their money and hired private investigators to tail Spitzer…..
[sarcasm]This is proof that we need more people in government to watch over the other people in government. Then, we can have another layer of people watching the people who are watching the first people. Unemployment will drop to 0% and nobody will ever do anything wrong ever again.[/sarcasm]
Russ Nelson,
That is hysterical.
freedomlover,
judging by Muirgeo's first post, he doesn't even understand the topic.
I'm deeply disappointed in Spitzer. He did a lot of good as AG and evoked remarkable clarity in everything he said. Of course he should resign given his hypocrisy in this matter, particularly if taxpayer funds subsidized any component of of his escapades.
That said, I think Beadreaux's point for private matters is a bit hollow. He prosecuted the behaviors of illegal businesses, not the johns or the music consumers or the financial borrowers.
Also, did he say that we should butt out of his private affairs?
Mesa,
I was wondering the same thing. Not whether or not anyone was tailing him but how many!
This isn't the first time he's been in trouble since he became governor either. He continued to use his mafia tactics once he got to Albany but they didn't go over as well there and he got a lot of bad press when the story of his coercion broke.
His double standards are truly amazing. If a company aggressively markets a product, that's a felony. If he threatens to break people's kneecaps, that's God's work.
Steve, this guy built a whole career based on being a moral crusader. This is as blatant an example of hypocrisy as you'll ever see.
And God, I hope he did use taxpayer's money to pay for his hookers. It would just make the poetic justice even more so.
He did a lot of good as AG and evoked remarkable clarity in everything he said.
What good things did he do?
He prosecuted the behaviors of illegal businesses
Since when did investment banking, insurance and music become illegal?
Spitzer’s toast.
I would be equally happy if Warren Buffett went away.
I love the smell of karma in the morning….
As they say: "what goes round, comes round." That includes the shit too!
muirduck is a troll because "it" routinely goes off topic into it's pre-canned talking points like the good little Bolshevik it is.
That's too bad about his resignation. I mean, not that I want him sticking around as governor. It's just that it would be so much sweeter if his agony could be prolonged for a few days, or even a week.
"And God, I hope he did use taxpayer's money to pay for his hookers."
As a New York taxpayer, I resent that. I want my tax dollars going to socially useful things that the state of New York provides like… …like… …um…
Oh hell, why not support the hookers.
Adam,
For his prosecutorial achievements, just read a bit…
http://en.wikipedia.org/wiki/Elliott_spitzer#Work_as_Attorney_General
In here, you'll find what's illegal about investment banking, insurance, and music… (securities fraud, conflicts of insurance agent interests, record companies welching on royalties earned by musicians).
In any case, I'm not defending him. I'm just saying that Beaudreaux's privacy reference is off the point.
Steve H.
It was Methinks who said what you credited to Adam. And Methinks is correct. Those businesses are not illegal.
You should not say "He prosecuted the behaviors of illegal businesses." You should have said "He prosecuted businesses who behaved illegally."
Prostitution rings are timely examples of illegal businesses. The Music Industry is not.
We are now seeing a financial meltdown because we specifically allowed deregulation of the banking and finance industry.
Straw man slayer saves the day once again.
The banking and finance industries are unregulated?
Python, point taken on my poor sentence structure, although I was just following Beaudreaux's reference "…crusades against behaviors…"
I stand in my opinion that Spitzer's "crusades" were legitimate prosecutions of illegal activities and in the public interest. I also feel that Spitzer deserves no privacy on the prostitution sting; it is absolutely a public matter because he's a public official who broke the law.
Steve H. above cited Spitzer’s “accomplishments” as AG. He was responsible for what became a witch hunt related to late trading and market timing of mutual funds.
To reveal any more would get into too much detail about what I do. Suffice it to say that the information on Wikipedia is not entirely accurate, nor is the portrayal of events related to that subject.
And yes, Sam, that’s now the dumbest thing ever posted on an economics blog…
Steve H,
Spitzer doesn't have any prosecutorial achievements. There was almost no evidence for most of his accusations. Knowing this, he would call his victims and threaten to ruin them in the court of public opinion. They caved. A former Goldman Sachs partner once publicly stated that he thought Spitzer was overstepping his boundaries. He got a call from Spitzer threatening to destroy him. Cowing people is his only achievement.
As a New Yorker, I watched as he went after my colleagues and competitors. There are definitely practices that I thought should have changed on Wall Street and people that I knew played fast and loose with ethics. We all watched as Grubman and the shareholders of Citigroup took the fall for Sandy Weill, who personally contributed to Spitzer's campaign but who also personally ordered Grubman to work out the unethical deals with WorldCom and AT&T. None of the "offenders" went to prison or even lost their jobs. The rules enforced by the SEC in the aftermath caused nothing but the need for more compliance staff. Nothing got better but shareholders got poorer.
Grasso was the CEO of a private organization which privately decided to pay him an enormous amount of money. Apparently, it's okay for Eliot Spitzer to inherit his billion dollars but it's not okay for Grasso to earn his hundreds of millions. Spitzer tried hard to cow Grasso, but if you've ever been in the company of old-school floor traders, you know those guys don't go down easy. So, Grasso fought back and he's winning in court because – as it turns out – a private organization can pay its officers as they see fit. Who knew? Ugh.
I realize you're not defending this serpent, but I don't know how any of this can be called prosecutorial success and I don't know how you can claim that he did so much good as AG.
I stand in my opinion that Spitzer's "crusades" were legitimate prosecutions of illegal activities and in the public interest.
Again, he rarely prosecuted anything. He persecuted a lot but rarely prosecuted. What proof was there that these businesses were actually engaged in illegal activity?
Spitzer mostly publicly alleged all manner of BS and filed lawsuits. The businesses settled and paid fines instead of going to the expense of fighting him in court. Mind, if there were actual ILLEGAL activity, the AG would have been OBLIGATED to file criminal charges. How many criminal charges were filed? Exceptionally few because he rarely had evidence for his accusations. What makes you so sure he was actually prosecuting illegal activity and that his actions were in anyone's interest except his own?
A private matter? Really? A governer and former attorney general commiting a crime (whether it should be one or not under Boudreauxian libertarian principals) and setting himself up for blackmail with the organized criminals who by definition, since it is currently illegal, run prostitution rings. Are there no standards for high office? Is there really no connection between how a man treats the contract with his wife and his kids and how he treats his obligation to run the affairs of state (i.e., his contract with the people he represents?
I generally love Mr. Brodeaux's brand of economics, but no wonder economists aren't more popular?
I also ususally don't experience shadenfreude, but I will make an exception here for Mr. Spitzer.
I am sure the apparently innocent Spitzer targets Hank Greenberg, Dick Grasso and many others are celebrating tonight.
A toast is in order all round to the hoped for demise (politically at least) of that hyprotical, market bashing, and opportunistic scoundrel. How wonderful that he go out in a self inflicted spastic fit of seedy hyprocisy.
Voters of New York, congratulations to you, too. You got just what you voted for and as I expected you to get based on his past. I hope it is your junior Senator's turn next. My advice, check em out beforehand next time.
Tom
Tom, adhem, you totally missed the saracasm in the letter. Don was mocking the Times for past past claims of "personal matters" of Chiefs molesting the help.
I bet you don't even know how to say Grankatoe!
Colson,
Great line!
I love the smell of karma in the morning….
Posted by: colson | Mar 10, 2008 7:49:23 PM
Made me laugh, thanks.
M.Hodak,
Well put, I like the style.
"And God, I hope he did use taxpayer's money to pay for his hookers."
As a New York taxpayer, I resent that. I want my tax dollars going to socially useful things that the state of New York provides like… …like… …um…
Oh hell, why not support the hookers.
Posted by: M. Hodak | Mar 10, 2008 7:55:45 PM'
Compared to the other shit they use the money on, hookers seems like a good thing, at least someone gets some satisfaction.
Nope…no way… Banks function because of the federal treasury and they have the priveledge of the backing of the the US government.
We are now seeing a financial meltdown because we specifically allowed deregulation of the banking and finance industry. Now millions are being caught in all forms of predatory lending and financial wizadry with the backing of the US government and its tax payers.
What is needed is more oversight not less.
Posted by: muirgeo | Mar 10, 2008 5:05:59 PM
That's incorrect. Some banks operate without the backing of the FDIC.
First, there is no lending meltdown. Secondly, the subprime mortgage 'crisis' is due specifically to the busy bodies (that Don is talking about) alleged discrimination in lending practices. Thus these busy bodies forced banks to lower their underwriting practices or ignore them altogether. This resulted in… that's right: higher than average default rates.
muirgeo, thanks to people like you being in the government, an unnecessary problem (not crisis) has risen. These same people who created the problem now think they have to solve it. But the solution is easy: butt out!
Hmmm… hitting a few nerves here with mention of Spitzer's prosecutorial acclaim. Again, not the point I was making, but hell, I like banter in any form.
Here's a concise piece that sort of sums up how and why Spitzer was effective and positive as AG.
http://www.slate.com/id/2108509/
True, Spitzer didn't go for convictions, instead preferring to lean on corporate bad boys with tools that prior AGs never thought to use. And as a well-heeled investor himself, there's no doubting his keen sophistication on the workings of the investment industry.
His successes depend on ones perspective. For brokerage investors, mutual fund and insurance customers, and even consumers chasing down squirrely rebate operators, he did a lot of good. Executives and shareholders of greedy, unethical firms maybe not so much.
Perhaps some find it unfair that he would leverage his knowledge and the visibility of the office in the ways he did. The fact is that the firms he went after admitted wrongdoing (in most but not all cases), made restitution, and changed the way they did business in the interests of their customers and the public. (Hardly "witch hunts" when these firms admit guilt, Mesa.)
I'm sure there were a few victims, scapegoats, and vendettas as Methinks describes. Frankly, I'm less worried about them then the small powerless 401k investor getting snaked by Merrill or Janus.
Regardless of what you think about him, it took balls to go after New York finance in New York (to say nothing of going after the Gambinis in NYC) and his noteriety inspired many other states to shore up their own fences. He's a populist, winning his gubernatorial primary with 81% and the general with 69%. He had to have gotten SOMETHING done as AG to garner that kind of support!
Muirgeo, the real question is if banks would make crappy loans if the institutions were not backed by the government? Does the government create moral hazards in bank lending?
We are now seeing a financial meltdown because we specifically allowed deregulation of the banking and finance industry.
Here muirgeo, read this. The beginning should keep you gripped — because you buy into the negativity — but the ending is what I'm hoping you'll truly grasp. Holding my breath would be a stupid move on my part.
Caught a news spot of Hillary defending Spitzer today. She said, "At least he didn't use a cigar to prep 'em".
Remember when banks didn't lend money to people who were bad risks, or if an unknow they loaned money at more stringent standards than a known relaible borrower?
I do.
What happened to those days?
Why are banks now lending to anyone and everyone?
There is an answer.
lcj,
First Alan Greenspan was a cult member of the Objectivist Society and apparently met with Ms. Rand.
I tell you what I agree with her solution more then with what the Fed is doing. The Fed set up the game to these looters likings and now they are bailing them out with more tax payor dollars. The Fed has bowed to the asset holders over and over agian with rate cuts and infusions of massive dollars at everyone elses expense. They always do and then we get to foot the bill. It's the biggest hidden tax in the world. This is nothing new and its preventable with good regulation but that was all scraped starting with Reagan and the Era of Corporate welfare.
It's a Ponzi scheme LCJ…It's a Pyramid scheme. It's not about free markets for these guys its about controling markets by controling the money supply and we all pay for it.
Because of crap like this we now pay $500 billion in interest debt a year that could easily go for Universal Health care and Day care or we could all get huge tax cuts. But no we are funneling money to these wealthy elite paper pushers who often add nothing to productivity but suck it dry like leeches from the working man. Its BULLCRAP!
Again did you see Wall Street crying like big fat babies when Bears-Streans announced its write offs???
These f'ing jack azzas are laisse faire free marketeers during their bubble economies and fricking socialist when their crap hits the fan and the bubbles they make burst. They are dispicable on the level of the worst of politicians.
DEEEP BREATH>>>>>OK I'm better….rasum frasum riickin FRACKEM()&#_) (&*#(* deep breath….slowly……sighhhhhhh….hmmmmmm….rant out…
Does the government create moral hazards in bank lending?
Posted by: mcwop
We didn't used to see such problems when banks could only do simple loans to private individuals. We didn't see huge debt when lenders were held to reasonable usury (?sp) laws.
Damn why do you guys root for the Mr. Potters of the world over George Baileys? Seriously when you watch It's A Wonderful Life do you guys actually walk away thinking what a good guy Mr. Potter is???
True, Spitzer didn't go for convictions, instead preferring to lean on corporate bad boys with tools that prior AGs never thought to use.
Colourful use of language. It's probably true that other AGs didn't think to use mafia style extortion. Define "bad boys".
And as a well-heeled investor himself, there's no doubting his keen sophistication on the workings of the investment industry.
Inheriting money doesn't make you a sophisticated investor.
Perhaps some find it unfair that he would leverage his knowledge and the visibility of the office in the ways he did.
Uh, no. What we find unfair is that he used the power of his office to threaten and extort.
I'm sure there were a few victims, scapegoats, and vendettas as Methinks describes.
What drivel. The point of the AG's office is to aid in the maintaining rule of law to prevent victims and prosecute criminals, not to CREATE victims and pursue vendettas.
Frankly, I'm less worried about them then the small powerless 401k investor getting snaked by Merrill or Janus.
Perfect. So, justice should not be blind. Every man should not be equal under the law. If the man is in one position, then it's okay to victimize him. If he is in another, then it's not okay to victimize him. I'll bet you think it's not okay to treat black suspects worse than white ones, right? But if we are not equal in the eyes of the law, then why would that be wrong?
Also, what do you mean by poor, helpless 401K holders getting "snaked" by Merrill?
Regardless of what you think about him, it took balls to go after New York finance in New York…
Where have you been? Ever heard of Giuliani and Michael Milken? This has been going on for a long time. The main difference between Spitzer and his predecessors is that Spitzer really took extortion to new heights.
(to say nothing of going after the Gambinis in NYC…
Who do you think runs prostitution rings? Nuns?
Damn why do you guys root for the Mr. Potters of the world over George Baileys? Seriously when you watch It's A Wonderful Life do you guys actually walk away thinking what a good guy Mr. Potter is???
No. Our understanding of the banking industry goes deeper than a Jimmy Stewart movie. Remember, the round peg goes in the round hole and the square peg goes in the square hole.
Muirgeo, we have seen the same problems over and over through history. This time is nothing unique. Do you want to discuss regulations (early nineties) that require marking securities to CMV versus a longer term valuation and how much that has contributed to the problem. Or how accusations of redlining contribute to the sub-prime mess?
Hold on with the valuations, mcwop. Muirgeo is still working out which peg goes into which hole.
The Fed has bowed to the asset holders over and over agian with rate cuts and infusions of massive dollars at everyone elses expense.
You have no idea, zip, zero, nil, none, nada, about what you wrote here.
It's a Ponzi scheme LCJ…
So says the guy who supports Social Safety Nets schemes.
More deep breaths are in order doctor, Doctor. It would help if the burning crack rocks were extinguished in the background prior to those breaths.
Perhaps, Methinks, many of us believe that the scoundrels in the executive suite are worse than the scoundrels in the AG's office. There's certainly a lot more opportunity for greed and in the former, and that's what's driving all of this.
Anyway, you're angry and there's no point in responding to your vitriol. If you really think that Spitzer was creating victims by going after "your colleagues and competitors," there's not much I can say to bring you back to the real world. Enjoy your day of righteousness in Spitzer's fall from grace.
Sorry Steve, not trying to pick a fight here, but this is incorrect:
“For brokerage investors, mutual fund and insurance customers, and even consumers chasing down squirrely rebate operators, he did a lot of good.”
No, he did not. This is a characteristic of the financial industry: the appearance of impropriety is (often) as damaging as actual impropriety.
Spitzer functioned largely on innuendo, backed by bully tactics. Much of it was substanceless.
I cannot get into details, but I personally know people who lost their jobs because Spitzer opened his mouth, effectively creating false accusations.
You (and most others) are incorrectly ascribing noble intentions to this person: his intent was not to "clean up" Wall Street (or any other street). His intent was to gain power for himself.
Well, Ken, I suppose that any response to drivel would be called vitriol by the author of the drivel. It's a cute way to sidestep when you have issues with basic logic.
many of us believe that the scoundrels in the executive suite are worse than the scoundrels in the AG's office.
Brilliant. It's better to have corrupt officers of the law with the full coercive power of the state behind them than it is to have corrupt businessmen.
Mesa, I believe Ken has just told us he's okay with false accusations and victimizing innocent people as long as they belonged to a certain group. 'nuff said.
G'night.
"Perhaps, Methinks, many of us believe that the scoundrels in the executive suite are worse than the scoundrels in the AG's office."
I haven't met a scoundrel in an executive suite that can falsely prosecute a man and have him put in prison. Personally, I think the scoundrel with the police force, and the billions of dollars of government behind him is the far bigger threat.
"There's certainly a lot more opportunity for greed and in the former, and that's what's driving all of this."
More opportunity for greed in executive suites than in elected office? That's funny. Methinks writes much better than I, so I'll leave the rest of the rebuttal of that point to her.