LARRY KUDLOW CALLS OBAMA SOCIALIST FOR HIS FAIR TAX POLICY, YET KUDLOW SUPPORTS NATIONALIZATION OF AMERICAN BANKS

Some thoughts on the comments of several of CNBC's commentators on the crisis with the rating agencies and with the controversy surrounding the 700 billion+ rescue of financial institutions. As to the credit agencies, many observers including myself accuse the agencies, such as Standard & Poors and Moody's, of awarding high ratings to junk bond issues not on the basis of the poor underlying credits but because of the large fees able to be generated.

Larry Kudlow on CNBC's Kudlow & Co. claims that Argentina's president, Cristina Fernandez de Kirchner, is a "socialist" for trying to nationalize private pensions. Has Kudlow ever looked in his mirror and saw himself for what he really is, the "great American socialist" for his support of government ownership of U.S. banks? Kudlow also calls Obama a socialist. Kudlow, the "great American patriot," as he likes to call himself, obviously does not like Obama's sensible tax policy, yet he foolishly supports a multi-billion dollar wasteful government nationalization of AIG and American banks.


As to Michelle Cabruso Cabrera, Kudlow's acolyte, she tries to blame the government for the sins of the rating agencies, claiming that the government is mainly responsible because she claims it has refused to allow new entries into the ratings business, and this lack of competition is what caused the ratings fiasco.

Hey Michelle, please cite chapter and verse to back up this far-out position that the government restricts the number of ratings entities. It turns out that S&P, Moody's, et al., prostituted their role of giving an impartial judgment on the value of credits if they could earn more money. A junk credit could be turned into a golden AAA if enough money were paid to these guys. The whole ratings industry stinks. And you try to deflect blame by saying it is the government's fault.

As to government prevention of competition, I have a test for Cabruso Cabrera. Start your own ratings agency and see how much business you can get. Not a lot I would expect. So much for your silly "the government bears responsibility for not allowing competition" argument.