This is what FDR said on August 14, 1935, when he signed the Social Security Act of 1934–it’s rather ironic now, isn’t it?

“This law, too, represents a cornerstone in a structure which is being built but is by no means complete. It is a structure intended to lessen the force of possible future depressions. It will act as a protection to future Administrations against the necessity of going deeply into debt to furnish relief to the needy. The law will flatten out the peaks and valleys of deflation and of inflation. It is, in short, a law that will take care of human needs and at the same time provide for the United States an economic structure of vastly greater soundness.”

Is any of that true? Our November cover story (”Promises Will Be Broken: A retirement crisis loom–but not because of the market’s meltdown. It’s worse than a temporary swoon.”) described the situation we’re in: the present value of the U.S.’s entitlement programs is already more than $56 trillion. Sure makes FDR’s speech look silly.

The blog of Roger Kimball, editor of The New Criterion, an excellent monthly magazine focusing on arts, literature and culture but also espousing the virtues of limited government and personal liberty, has an interesting trivia quiz on Social Security.

Ron Paul, an obstetrics/gynecology specialist, is a Congressman for Texas’ 14th district. Dr. Paul is also a great American: He believes that the government exists to protect liberty and not to redistribute wealth or to grant special privileges. He is also the chief sponsor of HR 1207, a bill that seeks to audit the Federal Reserve and then — get this — end it. Dr. Paul argues that the Fed is political, meddles in free markets and in general has undermined the stability of the economy and NOT stablized it as it purports to do.

Richard Bove, the outspoken analyst of Rochdale Research, issued a short note yesterday, titled, “The Government’s Not So Invisible Hand.” Bove paints a gloomy picture for the U.S. economy, essentially saying we’re on a road to high inflation. more

Can a rank-and-file Series 7 holder who works for a major national broker/dealer ever truly work as a fiduciary? It’s a fair question.

Now that FINRA Chairman Richard Ketchum supposedly urged the SEC to convert all “financial advisors” to a fiduciary status (oh, and with FINRA as the SRO in charge!), let the debate begin. We’ve always argued for that, especially during the brouhaha around the so-called Merrill Lynch exemption. (Not sure about FINRA’s role, though.) more

Yesterday, the WSJ reported that the Obama administration would like to dictate how financial institutions compensate their employees — even those banks that have not received a dime in federal bailout money. Of course, the politicians are just trying to protect us from those beastly, greedy bankers who blew up the financial system for their own personal gain. (Oh, brother.) Still, it’s a scary indication of this administration’s ambition to centrally plan American society. more

When it comes to taxes, much hyperbole is thrown around from various ideological groups. Corporations should be taxed out of some definition of “fairness,” says the left; high corporate taxes are unfair, say conservatives and liberarians, because, well, it amounts to double taxation. A post from yesterday on RealClearMarkets.com seems sensible enough–as in attempting to avoid ideology, sticking instead to econ 101.

Among the author’s points (John Tamny, an editor of RealClearMarkets, and a senior economic advisor for H.C. Wainwright Economics, among other things) is this neat truth that the Democrats and the Left simply ignore:

“But more than customers, enterprising individuals are arguably harmed most by the corporate tax in the same way that high levies on the rich ultimately hit the non-rich most acutely. When governments succeed in expropriating the earnings of the rich, they reduce the amount of capital in the private sector that would otherwise be available to fund economic growth. Along those lines, it can’t be stressed enough that without capital, there are no wages.”

The Daily Beast reports today that Bernie Madoff’s relatives and close associates must have known he was a fraud, since “in the 90 days leading to the collapse of Bernard L. Madoff Investment Securities, $735 million was withdrawn from accounts controlled by Madoff’s relatives, employees, and their relatives, and by people who fed billions of dollars of investors’ money to Madoff.”

Clearly, there are some in Greenwich who believe Bernie couldn’t have pulled his massive Ponzi off by himself. Guest of a Guest reports that the Round Hill Club of Greenwich has revoked Walter Noel’s membership. You remember Noel? He ran the Fairfield Group, a fund of funds that fed $7.5 billion to Madoff.

In the New York Times, “Your Money” reporter Ron Lieber puts forth this hypothetical:

“Here’s a nightmare for you: Imagine waking up one morning to discover that your employer is bankrupt and the money you have set aside in your deferred compensation plan belongs to the company’s creditors.”

If you are a financial advisor at, say, Merril Lynch or Smith Barney, this was a nightmare alright, one you lived. Indeed, you might regret having participated in your deferred comp plans — which featured company stock. You might forward this article to clients, but without mentioning your own real-life nightmare.

That would be a bad thing. It’s hard to believe that anyone could argue that the New Deal did anything but help turn a recession into a depression. (See here for a prior blog comparing Obama to FDR.)

And a friend brought this intersting bit to my attention from yesterday’s Wall Street Journal (subscription required) more

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