Faith in Big Government Doomed Corzine, MF Global

BG contributor Charlie Gasparino in The New York Post:

Jon Corzine appears to have committed more than a few sins in the runup to the demise of MF Global, including possibly using client money to pay for the risky trades that forced his brokerage firm into bankruptcy over the weekend. But possibly his biggest sin was his steadfast belief in the power of government.

The former New Jersey governor and Goldman Sachs chief executive went wrong by assuming that a government bailout would somehow turn his firm’s bet on some of the worst investments in the world — the sovereign debt of Italy and Spain — into gold. That absurd faith has doomed many chief executives — Dick Fuld of Lehman Bros. chief among them, just a little more than three years ago.

And, more than any of the other shenanigans that may have taken place during the ill-fated firm’s final hours, it’s what did in Corzine and MF Global.

Corzine is, of course, well known for his love of government both as Goldman CEO (where he supported various left-of-center candidates) and later as a New Jersey politician best known for what he didn’t do — namely, rein in the cancerous growth of the state’s government and its public-sector unions.

I debated him on CNBC in the summer of 2008, while he was still New Jersey governor. He was humping the economic plan of his fellow Democrat, Barack Obama, as the best solution to the looming recession as the housing bust and financial crisis picked up steam.

The “solution” that Corzine so vociferously defended is the economic “plan” we have today: Massive increases in government spending, subsidies for preferred businesses (especially “green” ones) and threats of higher taxes on the wealthy to pay for it all.

My point to him then was that it’s foolhardy to even threaten higher taxes when the country’s heading toward financial crisis and recession. We need people spending money and the private sector to be unburdened by government now more than ever.

Corzine didn’t buy it, and his candidate went on to win the White House. But a year later, Corzine would be forced out as governor — one of the many victims of the disastrous policies he advocated.

Read the whole thing here.