Hedge Fund Billionaire Gets 11 Years, Romney Raising More Money From Wall Street Than Obama, Republicans Can’t Joke and Shouldn’t Try to, China To Learn Basic Economics the Hard Way

And Other News and Commentary

Hedge Fund Manager Raj Rajaratnam received a sentence of 11 years which is believed to be the longest prison term ever for a conviction on insider trading. 

Judge Richard Holwell handed down the sentence after concluding that Mr Rajaratnam made more than $50m in profits from his illegal trades. “His crimes and the scope of his crimes reflect a virus in our business culture that needs to be eradicated,” he said.

It turns out Mr. Rajaratnam is in poor health

The judge revealed details of Mr Rajaratnam’s medical problems, which had been kept under seal previously. He said that the hedge fund founder probably needed a kidney transplant and suffered from advanced diabetes.

and the Judge has ordered him to prison and will not let him stay out of jail on appeal.  

His lawyers requested Mr Rajaratnam be detained at a medical facility at Butner, in North Carolina – the same location at which the Ponzi scheme creator Bernard Madoff is serving his 150-year sentence. 

The Dismal Political Economist has occasion to drive by that facility several times a year, and his advice to anyone else who also drives that route is to do the same as he does, one hand on the steering wheel, the other hand on the wallet.

The New York Times reports that Mitt Romney has raised substantially more campaign funds from Wall Street than Mr. Obama has done.

Since this spring, Mr. Romney has raised $1.5 million from employees of firms like Morgan Stanley; Highbridge Capital Management, a hedge fund; and Blackstone, a private equity firm. Mr. Obama has raised just over $270,000 from firms that were among his leading sources of campaign cash in 2008.

For undecided voters a good rule to consider is to vote for the candidate that raises the least amount of money from Wall Street.  If you have to ask why, then that rule is ironclad.

Former Arkansas Governor Mike Huckabee jokes about calling voters in Ohio and if they are not willing to vote his way on Issue 2 (a law destroying collective bargaining for public employee unions)

If they say no, well, you just make sure that they don’t go vote.  Let the air out of their tires on election day.  Tell them the election has been moved to a different date.  That’s up to you how you creatively get the job done.”

 Now Mr. Huckabee is known for his sense of humor, in fact he actually has one, but this is not one of his better efforts.  Combined with Herman Cain joking (?) about shooting or electrocuting those crossing the border illegally and Mitt Romney joking about being unemployed (Mitt is worth about a zillion dollars) one strongly urges Republicans to stick to talk on the issues.  Their positions on the economy, taxes, the environment and the rest are funny enough all by themselves.

In Economics one can learn lessons the easy way or the hard way.  China is getting ready to learn a basic lesson the hard way.  China is an export driven economy.  This is great when exports are growing.  But exports grow only when China’s customers have plenty of money to spend on imports from China. In Europe and the U.S. the economic slowdown is reducing demand for Chinese imports.

China's trade growth slumped last month as the world's second-largest economy felt the impact of economic turmoil in its most important trading partners in Europe and the US.

Exports increased by their slowest pace in seven months in September, expanding 17 per cent from a year earlier to just under $170bn, compared with a nearly 25 per cent increase in August, according to customs data released on Thursday.

So China, as much as you would like to think otherwise, you have almost as much at stake in the health of the U. S. and European economies as the residents of those areas do. 

And if you want your economy to continue to export, then you ought to think about opening up your economy to imports from the U. S. and Europe.   Because if your main customers cannot afford to buy your goods and service, they won’t buy your goods and services. 

There, that’s not too difficult a lesson in economics, is it?

Newt Gingrich needs to get into the 21^st Century, because Newt and only Newt and few political junkies know who Nelson Rockefeller was.  To people today he seems like a distant relative of John D., known for that reason but not for any other.  Briefly speaking Mr. Rockefeller was indeed the grandson of John D., Sr and served as Governor of New York. 

He tried to gain the Presidential nomination of the Republican party but was considered to moderate.  When Gerald Ford became President he appointed Nelson Vice President, then jettisoned him to make room for Robert Dole on the ticket.

Newt apparently thinks that everyone knows of Mr. Rockefeller and his failure to ever gain the Republican nomination.  So that’s his attack on Mitt Romney

Former House Speaker Newt Gingrich has a new take on Mitt Romney’s challenge in cementing his status as frontrunner for the GOP presidential nomination. It’s not that he’s a flip flopper. It’s not that he’s a Mormon. It’s his Nelson Rockefeller problem.

Mr. Gingrich, is a long shot GOP candidate himself, said Sunday Mr. Romney, like Mr. Rockefeller, is a “moderate Republican” who may look like a strong general election candidate but who hits a limit in support among GOP primary voters who are looking for more conservative candidates.

“It is the Nelson Rockefeller problem,” said Mr. Gingrich.

Obviously Mr. Gingrich is making an major effort to win the “over 85” voter.