Home > Jay Bookman > Archives > 2009 > January > 26 > Entry
DEL.ICIO.USFixin’ to pitch a fit over Wall St. greed
The Atlanta Journal-Constitution
If you’re looking for a place to put the pittance you salvaged from the stock market, I’ve spotted the next hot commodity, the next growth industry. Under these conditions, demand is going to soar for this item, and there’s money to be made.
You ready? I’ll whisper it in your ear, just between us friends:
“Pitchforks.”
Yup, pitchforks. With good solid handles and sharp tines. When the angry mobs start assembling to march on Wall Street and Washington, ready to take out their anger at the greed and excess of the last few years, they’re gonna need pitchforks and torches. We’ll sell ‘em by the thousands, like Obama buttons at the inauguration.
Tar-and-feather futures might not be a bad investment either.
I’m kidding of course, but only sort of. Like a lot of Americans, I’m aggravated and frankly astonished to see the sense of royal entitlement to other people’s money that developed over the years on Wall Street. And nothing seems to shake it.
The story of Bank of America, Merrill Lynch and Merrill’s former CEO John Thain illustrates that sense of entitlement all too well.
Last year, Merrill Lynch lost tens of billions of dollars —- $15 billion in the last quarter alone. Yet even after that performance, Merrill executives felt they were entitled to billions in bonuses paid with stockholders’ money.
It didn’t matter that Merrill’s losses were so bad that in effect the brokerage had to be rescued by taxpayers. It didn’t matter that the U.S. Treasury had to give Bank of America a total of $45 billion in TARP funds to help the bank buy Merrill and save it from bankruptcy.
Not even that was enough to shake the sense of royal entitlement. Late last month, just before the merger was made official and with Bank of America still finalizing the taxpayer subsidy, Merrill executives collected an estimated $3 billion to $4 billion in bonuses. They even accelerated the payment schedule by a month to make sure the money flowed their way before anybody could stop it.
Like I said: Pitchforks.
Thain, Merrill’s CEO, at first tried to include himself in the gravy train, pushing for a $10 million bonus even as the company collapsed. Public outrage prevented that injustice, but it did not stop Thain from pocketing a separate $9.7 million payment triggered by the change of ownership. That was on top of the $15 million bonus he received just for taking the Merrill job just a year earlier.
And as the cherry on the sundae, Thain had also spent an estimated $1.2 million just redecorating his office.
On the scale of threats to the economy, such sums are admittedly almost too minor to notice. Officials in government and on Wall Street are trying to free up the flow of credit; they’re trying to bolster confidence in the banking industry; they’re trying to save the jobs of millions of Americans. And the honest ones admit that they aren’t really sure what will turn things around.
“The answer is nobody knows. The economists don’t know. All you know is you throw everything at it …” Warren Buffett said last week. “What we do know is to stand by and do nothing is a terrible mistake or to follow Hooverlike policies would be a mistake.”
The American people seem to understand that. President Obama said in his inaugural address that it’s time to put away childish things, and most Americans have taken a pretty mature approach to a frightening situation.
However, their support for committing hundreds of billions of additional taxpayer dollars to corporate bailouts hangs on the belief that Wall Street shares their understanding of the gravity of this situation. People have lost half of their life savings, and perhaps their homes and jobs too, and they want some assurance that the greed and excess has ended. They want to know that they’re not being scammed again.
And if government officials aren’t willing or able to provide that assurance —- well, the public probably won’t respond with pitchforks. They’ll just insist the bailout be stopped in its tracks, and it’ll be hard to blame them.
Comments
By AJC/DNC Management
January 26, 2009 6:51 AM | Link to this
I’d rather go after their pushers-
{{{{One of those powerful friends was Rep. Barney Frank (D-Newton), chairman of the House Financial Services Committee. And one of the recipients of a $12 million infusion of federal cash was the troubled OneUnited Bank in Boston - a bank that had already been accused of “unsafe and unsound banking practices.” Its CEO, Kevin Cohee had also been criticized by regulators for “excessive” pay that included a Porsche.
Frank admits he included language in the TARP legislation specifically designed to bail out OneUnited. He also acknowledges contacting officials at the Treasury Department about the bank’s bailout application.-BostonHerald}}}}
Kickbacks instead of pitchforks?
ew
By ByteMe
January 26, 2009 6:53 AM | Link to this
Oversight is coming: TARP IG Letter
Meanwhile, I wonder why a lawsuit hasn’t been filed against ML/BAC (which TheStreet.com reports that BAC was informed about the bonuses in advance)…? Seems like a serious breach of fiduciary duty to the stockholders on the part of the board of ML.
By TN Gelding
January 26, 2009 7:04 AM | Link to this
Action should be taken immediately to recover the bonuses paid to ML executives as well as the other bonuses paid under similar circumstances. The fraud, greed, incompetence and lack of government oversight have destroyed capitalism as we knew it. It will take a generation to restore investor confidence.
By South Paw
January 26, 2009 7:18 AM | Link to this
ByteMe,
That “fiduciary responsibility” mantra has been breached by the Wall St thugs and their Republican party enablers so many times that it looks like swiss cheese. Did you read that little exchange that Phil Gramm had over his role in starting this mess. The Republican coward cannot even come outright and admit to his role. Then again, he is a Republican.
By Joey
January 26, 2009 7:19 AM | Link to this
Jay; This little posting falls way short of what is your duty to write.
Are you in denial or are you just unwilling to admit what you must know. Government, including, no, especially top level Democrats, are complicite in this financial travesty. They have reaped the benefits and still do.
People should lose their jobs, including some Senators and Representatives. People should have their wealth confiscated, including some Senators and Representatives. People should go to jail, including some Senators and Representatives.
But you and other news people will not step up. Step up and name the names. Will not do your jobs.
You know many of the politicians who facilitated this mess. It is o.k. with me if you want to throw Bush and Cheney in with them, but please don’t be so dishonest, or cowardly, that you leave the top level Democrat politicians out.
By Bud Wiser
January 26, 2009 7:25 AM | Link to this
Uh, people, just who exactly do you think is giving away our money like these to these corporations and executives?
CONGRESS.
And who is leading the charge, pleading the case. crying the loudest about the need to give these crooks our money, about the need to install a TAX CHEAT as the Secretary of the Treasury as well, because he is so smart?
DEMOCRATS.
Oh the Republicans are right there too; it’s like all of these corporations and their execs are little kids going through the cafeteria lunch line at school, but instead of heaping food onto their platters, behind the counter it is Congress heaping cash instead.
When are We The People going to finally get mad enough to discharge every incumbent from office, recall, or seek to indict these elected criminals who are so reckless with our money?
If there is to be a march on Wall Street with pitchforks and torches, tar and feathers, let it be only after our work is done in Washington first, and the halls of Congress have been sanitized of these vermin.
By Eric
January 26, 2009 7:27 AM | Link to this
With all the decline in financial value on, and confidence in, Wall Street, why are many employees still required to enroll in “mandatory” 401k accounts. Looks like that law would be repealed.
By DB, Gwinnettian
January 26, 2009 7:31 AM | Link to this
Eric @7.27, I’ll admit ignorance about the mandatory 401k enrollments you mentioned; I wasn’t aware that any employees were required to enroll and (presumably) contribute a specific percentage of their income to a company’s 401k.
How widespread is this practice? How many people are affected by this? Who’s leading the charge to change this? Just wondering.
By South Paw
January 26, 2009 7:53 AM | Link to this
It’s long past time for the Republican politicians to quit harping about how the world can be saved if only we eliminate anything that resembles regulation and free up the “markets”. If people like Phil Gramm and Alan Greenspan had not pushed so hard for no regulations on Wall Street, then at least we would have one less Republican mess to clean up.
By Ray
January 26, 2009 8:07 AM | Link to this
Sort of makes Franklin Raines the king of the hill at 190M, doesn’t it? And he even cooked the books to do it. He ought to be in jail.
By Curious Observer
January 26, 2009 8:09 AM | Link to this
When I logged in to check on my Wachovia checking account this morning, I got a welcoming message from the CEO of Wells Fargo. And when I logged in to pay off my Washington Mutual credit card account, I found it had been switched over to JPMorgan Chase; that fits, since I recently received a letter notifying me that if I chose to carry any balance on the card, my rate would be going up.
Who is benefiting from these bailouts and shotgun weddings of financial concerns? Certainly not the customers. And certainly not the small businesses that would be laughed at if they walked in to one of these banks to get a loan. The beneficiaries are none other than stockholders and executives.
I suppose I should be grateful that I’m not a customer of Bank of America. Otherwise, I’m ready to let these huge financial institutions fail. Who can imagine getting a large bonus for running your company into the ground? It would be cheaper to pay for FDIC reimbursement of account holders than to continue to pay billions to prop these failed giants up. If you’re a stockholder in one of these concerns, that’s tough. It’s part of the risk you ran in making your investment. Most taxpayers have had enough.
By South Paw
January 26, 2009 8:14 AM | Link to this
Anyone want to bet that the Republican politicians will respond with statements such as “we need less regulation” and “we need to tax these people less so they’ll invest more.” Riiight. I’ll bet that’s precisely what goes through the minds of people like Thain.
By Copyleft
January 26, 2009 8:28 AM | Link to this
Gee, it’s almost like corporate ownership of our legislators is a bad thing!
But what choice do we have? After all, any attempt to reduce the influence of corporate money and lobbyists on our government would be an unconscionable restriction of free speech… or something. “Money talks,” right? Therefore, money = speech.
By gttim
January 26, 2009 8:41 AM | Link to this
This is an agent-principle problem. Stockholders who actually own the company do not control what happens, or how management runs it. I am sure most stockholders would rather see long tern safe growth and nice dividends. However, since the odds of thousands of stockholders getting together to toss management out and replacing them with intelligent managers who will hold spending down, focus on long tern growth and not raid the company for their own pockets is pretty much nil, the current managers have no fear in lining their own pockets. Want change? Quit buying stock. If large corporations’ stock is no longer sought, and it decreases in value, something may happen.
By AmVet
January 26, 2009 8:47 AM | Link to this
It is too late to close the barn door. The cows are all out.
Remember the original bailout that was so urgently pushed through by Mssrs. Bush\McCain\Obama et al?
It contained virtually no teeth whatsoever. In other words there was almost nothing in it to keep this malfeasance from happening again. And again.
It was a fictional fix.
And the ultimate insult to the American people.
Guess how many public hearings there were?
Zero.
Where was the gathering of the best minds possible to find long-term SOLUTIONS.
It never happened.
Who represented a consensus of the taxpayers to protect OUR interests and money?
No one.
It was another Cheney-like closed-door, backroom deal between George W. Bush and Congress. After years of being paid to look the other way.
They shut out and sold out the American people.
Even though Washington had Wall Street over a barrel!
They could have gotten enormous concessions, actual change in the criminal behavior and comprehensive regulation.
And this new president almost certainly will NOT seek widespread prosecutions nor economic justice.
In spite of the rhetoric about hard choices and sacrifice, it would seem he is just another corporate w0re.
By Rascal
January 26, 2009 8:53 AM | Link to this
Jay loves to blame Wall St while ignoring the role government played in it all. If the government wasn’t sucking up $3 trillion in our money to pay for vote buying schemes, then we would never be in this mess. At least Wall St offers products for people to buy, no one shows up with a gun and makes anyone buy the crap. Government is a bit different. They show up with the guns, steal our money and then laugh while wasting it in every imaginable way. All the while, stupid voters put the b******* right back in office. Time for everyone to wake up and put lbertarian minded candidates in office and stop the cash printing presses, stop government fraud and waste and put our liberties first.
By Paul
January 26, 2009 9:09 AM | Link to this
I’m so disgusted with all this - and the possibility of what may happen next (all together now: Repeat the Chorus!) that about all I can offer is a follow-on to AmVet:
[[Guess how many public hearings there were?
Zero.]]
Maybe if we could get a few Congressmen to say and newspaper editorial boards to write “US Citizens Tortured by lax Congressional Oversight, Corporate Malfeasance” just maybe we could get a hearing or two?
Nawwwww.
Saw Sen Mitch McConnell this morning. He noted Spkr Pelosi’s earlier call that the stimulus package be timely and targeted. There’s probably another “t” word in there - she’s into alliteration. Mcconnell noted (as did the Congressional Budget Office) that much of the proposed spending will occur years down the road.
He suggested suspending the payroll tax for one or two years. That’d get the money into the hands of people who will spend it now, where it’ll do the most good to them. It affects 100 percent of people who pay tax, not just income tax ( subject of an earlier thread here) and joins with Pres Obama’s call for a tax cut for 95 percent of Americans.
And since many in Congress have assured us SS is in fine shape, it’s doable.
He also suggested (I like this, not just complaining or attacking, but offering options) the states get loans they’ll have to pay back, not just loans. So if they really want to build that waterpark (Miami) or add sand to that beach (New Jersey) maybe, just maybe, they’ll think harder if it’s their money, not Washington’s courtesy of citizens elsewhere.
Just saw this: Spkr Pelosi wants hundreds of millions in the stimulus package for birth control to reduce expenses to the states. Holy cow, get ready for the explosion from the civil rights, minority, and low income people as Spkr Pelosi doesn’t want them having more kids.
Link: Spkr Pelose Says Birth Control Good for the Economy
They’ll turn on Pelosi. Really. They will….
Nawwww.
Whew.
By AmVet
January 26, 2009 9:23 AM | Link to this
gittim is absolutely correct.
These modern day robber barons and their paid-off, elected co-conspirators conveniently forgot the three principles of capitalism:
1) If you own it, you control it. But not so in corporate America. The shareholders and investors have virtually NO say.
2) You are free to fail. Unless of course, you are big enough, then the socialists will bail you out.
3) Capitalism should never be allowed to use the government’s powers to essentially give away the resources and assets that belong to the sovereign people.
This appears to be little more that a bailout of the two party system that enabled the criminals in these multi-nationals who have no allegiance to this nation.
90% of Americans think this country is in decline.
75% think corporations have too much power.
60% think the two parties are failing us.
And every time I see that giant American flag on that building on Wall Street, I want to puke.
The modern day patriots.
Yes, Jay, it’s time to storm the financial Bastille…
By AJC/DNC Management
January 26, 2009 9:36 AM | Link to this
I told y’all you were going to hate Fitzgerald before this was through-
{{{{Sweeping federal subpoenas of Illinois Gov. Rod Blagojevich’s administration include requests for records involving David Axelrod and Valerie Jarrett, senior advisers to President Barack Obama.
Among 43 subpoenas released by the Blagojevich administration Friday, one from Dec. 8 seeks notes, calendars, correspondence and any other data that relate to Axelrod, Jarrett and 32 other people and organizations.-PMSNBC}}}}
This whole corrupt house of cards is fixing to come down.
ew
By getalife
January 26, 2009 9:47 AM | Link to this
I think the term lemon socialism is a good term. We buy the lemons, there still is no accountability and business as usual like nothing happened.
It is the one issue that outraged both sides but they toss out distractions like where to put Gitmo and the people let it go.
By Davo
January 26, 2009 9:51 AM | Link to this
Pitchforks? Hmmm, I think I’ll stick to my guns; literally.
The entirety of your opinion can be summed up by one word…revolution. You make fun of storming the castle when in fact it is probably more likely to happen now then in any point in recent history. When the great Keynsian bailout fails, which it will, and we end up in a world depression, do you think the people will just stand by?
My investment advise? Guns, ammo, canned goods.
By Paul
January 26, 2009 9:57 AM | Link to this
AJC/DNC Management
I’m kinda looking forward to the immense entertainment value that would be provided in the “war crimes” trial for the Bush Administration. A special prosecutor would have to investigate, or Congressional committees would have to subpoena, Spkr Pelosi and Sen Rockefeller for their role in acquiescing to, or promoting, waterboarding and encouraging other forms of torture, when they were briefed on it back about 2002.
But maybe that “Oops” realization will cause the issue to be forgotten… or, I mean “we have a severe economic crisis caused by the previous Bush Administration that requires our full and undivided attention” (press release from the House Speaker’s office).
By getalife
January 26, 2009 9:57 AM | Link to this
Since they are sticking the kids with the bill, perhap a march with your kids holding signs saying, stop stealing from me.
By john c
January 26, 2009 10:03 AM | Link to this
Bailouts! Our congress and government caused this country and world’s economic disaster and are responsible for the stockmarker selloffs. Why then shouldn’t stockholders be given a tax credit of say 50% of their losses from the Oct. 07 high? Stockholders deserve a bailout and it would be an expedient way to return money back into the economy in a fair way. It would return money to taxpayer’s IRAs and savings accounts. Average people had no control or knowledge of what was in store and didn’t know how to react to this. This would return money and part of their wealth back to those who lost it in the 1st place. These are the people who buy homes, second homes, small businesses etc. This will stimulate our economy in a very positive way
By CommunistAJC
January 26, 2009 10:06 AM | Link to this
Jay, Wall Street didn’t lend out money to idiots who could not afford to pay their bills. Wall Street is there for people to make money. Yeah, it’s a gamble but so is everything else. I’d rather take my pitchfork and go after congress. Harry Reid, Barney Frank, Nancy “we need more contraceptives” Pelosi and Chris Dodd would be the first.
By Paul
January 26, 2009 10:09 AM | Link to this
getalife
Buttons. Kids should wear buttons with your slogan on it. That way, every time parents look at their kids, or other people see kids, they’d face their responsibility in this mess.
What we have burdened them with is a travesty. If it means we have a decade or two of sacrifice, so be it. Karma.
By getalife
January 26, 2009 10:41 AM | Link to this
Great idea Paul.
See what happens when we work together instead of arguing.
Unity.
By ByteMe
January 26, 2009 10:44 AM | Link to this
Paul, re: the CBO report that’s not really what the Republicans are claiming it is.
Look at this
It’s not a report, just an analysis of the infrastructure project end of the stimulus package, which is only about 30% of the entire package and doesn’t include the tax cuts or credits that are a big part of the overall total.
The Republicans quoting faulty numbers for their own political gamesmanship. Surprised?
But, yeah, birth control is not stimulus of the kind we seek for the country.
By BionicBlonde
January 26, 2009 10:52 AM | Link to this
Keith Olbermann has given a possible title to how the individuals who are responsible for this situation may tell their own children how they ended up. It’s called “Why Daddy Went To Jail”—and we can be hopeful that a number of them will end up behind bars—and not in one of the posh prisons.
By RealityKing
January 26, 2009 10:56 AM | Link to this
There’s always been greed on Wall Street. So the problem can not greed, rather the bailout of the associated greedy addicts. When people get too greedy and reach beyond their means, they’re suppose to fail. That’s capitalism…
But if you’re truely looking for a place to put the pittance you, the progressive, some how salvaged from the stock market, listen to a conservative, not another progressive. Some one who spotted the next hot commodity last November, the next growth industry, guarnteed. The new hot commodity as part of the new Obama deal. The shovel, of course. You know, that thing roads are created and fix with.. Obama’s narrow minded answer to creating new jobs, not necessarily for Americans, in America.
But you better get in now. At the ever increasing rate of job loses see in today’s paper, and in the face of our clueless 111th progressively liberal Congress, shovels are going to be big, BIG I tell you! I’m inspired, aren’t you!?
By Taxpayer
January 26, 2009 10:57 AM | Link to this
Jay,
Here’s another good article that deals with the credit default swaps along with a couple of approaches on how to actually deal with the problem versus applying bandaids.
By Paul
January 26, 2009 11:02 AM | Link to this
BytMe
That link quoted the House Republican Whip as saying “that in fact today the Congressional Budget Office came out with a report — said that it’s just not stimulus. It won’t help the economy grow.”” is just plain distortion. A good clue is when they speak in absolutes “it won’t help the economy grow.”
I think when people object to a package that has about 1/3 not hitting the economy three or more years down the road they have a point, particularly when the timeliness is considered. But to say the proposal “won’t help the economy grow” is just plain wrong.
But those outyear spending programs are pretty popular with a lot in Congress.
getalife,
I’m finally getting the feeling there might be progress. Just listened to Pres Obama - he is our first President since Carter to try to get us off foreign oil. Not Reagan. Not Bush the Elder. Not Clinton. Not Bush the Younger - which is really astonishing, as oil money fuels jihadism. Maybe there is something to that oil industry connection… or maybe it was just political gamesmanship.
Imagine - we import about 2 million barrels a day from the Mideast. Pres Obama is clear about restating it funds despots, terrorism and nuclear proliferation. He’s accelerating the mpg standards and noted the standards in 2020 will save an amount of oil almost equal to what we import from the Middle east. That’s in 11 years from now.
Yet 9-11 occurred in 2001 - eight years ago. If the Bush Administration and Congress had implemented those standards back then, it’d be only three years until we hit our goal.
Sad looking back. Hopeful looking forward.
By jasper
January 26, 2009 11:10 AM | Link to this
All partisanship aside, wall street has always handed out big bonuses, only now they are getting attention due to the bail out.
Our federal government created this financial meltdown by forcing banks to lend money where they otherwise would not have. And now our federal government is trying to fix that problem by throwing more money at it.
I’m all for the pitchfork crusade on wall street, only if we stop by D.C. first.
By RW-(the original)
January 26, 2009 11:18 AM | Link to this
Paul,
Before he was President, Obama also said we could save as much oil as we could get from offshore drilling just by inflating our tires properly. I’m not sure I’m ready to take his word for oil projections without a little more backup.
As for President Bush not trying to get us off of foreign oil, he did try to shift us to domestic oil sources so maybe you really mean he didn’t try to get us off of oil in general. Clinton actually vetoed drilling in ANWR so there’s someone actively trying to keep us on foreign sources.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Maybe this is one of those times where we got a blog version and then a print version, but today’s article really rings of deja vu.
By getalife
January 26, 2009 11:36 AM | Link to this
Paul,
He is doing what he campaigned on while the rest are playing the blame game and can speak full sentences.
Change.
By Taxpayer
January 26, 2009 11:36 AM | Link to this
Bush and the Republicans were good at creating problems and dumping them off on others to fix. For example, the Republicans gave us tax breaks by borrowing from communist China, India, etc., so now we have to pay back the loans with interest. The Republicans have systematically worked to eliminate regulations on anything and everything with no regard for the damage that their action would have. That applies not only to Greenspan’s and Gramm’s failures to realize the need to regulate derivatives but also to the FDA and EPA (under Republican control) and their failures with respect to such issues as lead paint on children’s toys, salmonella and other bacteria in the food supply along with an inability to even trace produce back to a point of origin, mounds of toxic ash from decades of burning coal and dumping the waste into unregulated “ponds”, etc. The Republican party is an absolute and utter failure and now we have to try and restore some sense of sanity and order to virtually everything that they have come in contact with. President Obama and his administration have their hands full. No amount of time should ever soften the facts (that need to be told in the history books) about the Bush administration and the Republican party and the damage that they have wrought on us.
By Paul
January 26, 2009 11:44 AM | Link to this
G’morning RW-(the original)
I think it safe to say for quite some time I’ve viewed this entire ‘import oil from the ME’ as a national security issue and have agreed with Pres Obama’s assertion it keeps despots whose people hate us in power (which makes the region more volatile when the leaders are seen as ‘in bed with’ the West), funds Islamic extremists and provides money for nuclear proliferation.
So I’m willing to chuck some of the “let people buy whatever they want and let the corporations make as much money as they can” attitude.
I too chuckled when I heard Obama make the “inflate your tires” suggestion. But then I thought how this Democratic candidate was telling people, in effect, “hey, take some responsibility yourself. You have a car. When was the last time you checked the air pressure in your tires?”
Add to that the govt’s own fuel tip website tags that one measure as having the potential to save 4 percent in mileage, then multiply that by the gazillion vehicles on the road - well, on further reflection it can have quite an impact on the amount of gas burned.
Yes, what I meant was that Pres Bush didn’t make a concerted effort to get us off ME oil in general, even when we were in the midst of a war with fanatics who got support from people who got their money by selling us oil. There was some effort to expand domestic production but I didn’t hear it tied to the ME thing, or with other nonoil propulsion development which would also have the effect of lessening use of ME oil.
Your Clinton reference - that’s the point - they all did it, and for partisanship sake, you can still make the point Spkr Pelosi, it seems, would rather have us buy ME oil than develop our own oil resources here at home. And no, hunting and drilling and exploring in lease-held areas isn’t the entire solution.
By ByteMe
January 26, 2009 12:00 PM | Link to this
Paul and RW: FactCheck.org posted a piece in Newsweek about the tire-inflating issue:
Only half-right
It’s a nice idea, but people can’t keep their checkbook balanced or cook a decent meal 5 nights out of 7, so not sure it’s practical to expect it to happen without some encouragement from somewhere.
By Swami Dave
January 26, 2009 12:04 PM | Link to this
AmVet:
Surprisingly, I think that we are approaching some areas in which many of us can find some common ground. To take and extend your discussion on the three principles of capitalism (and the recent violations of those principles):
1) If you own it, you control it. But not so in corporate America. The shareholders and investors have virtually NO say.
Unfortunately, neither do the taxpayers whose confiscated earnings are being redirected in bailouts and stimulus packages designed / controlled by the very parties who created the problems or shirked their oversight authority over them.
2) You are free to fail. Unless of course, you are big enough, then the socialists will bail you out.
Or unless you are “small” enough to be a beneficiary of our growing and ever-expanding entitlement system attempting transfer of wealth and earnings from earners to those who did not. In this case, politicians on either end of the spectrum are using the confiscated earnings of taxpayers to buy votes or influence from their protected classes.
3) Capitalism should never be allowed to use the government’s powers to essentially give away the resources and assets that belong to the sovereign people.
On this point, we are in complete agreement as the government’s powers should not be used to confiscate and redistribute the earnings and wealth of taxpayers to the dependency classes at either the top or bottom of the economic scale. Taking the earnings or wealth of an individual without consent and the equitable return of value is theft; whether it is accomplished at the point of a gun, the passage of legislation, or fraudlent economic activities of leaders. Sadly, much of this behavior has been ongoing for some time as many in our culture have engaged in the moral relativism attempting to justify the entitlement mentality through either (a) assumption by right of class (“I’m important therefore I should get it”) or (b) through justification of need (“I can’t earn something for myself so I will elect overseers to take it for me on my behalf”).
This does raise a salient point which I have been making for some time to those who are trying to blame our current condition as a “failure of capitalism”. Recent events are not a “failure of capitalism” because we quit following capitalist principles as our guiding vision long ago. It is a joke to say that our problems caused by the conglomeration of socialist ideals of confiscation and redistribution with a near economic feudalism of caste are the fault of “capitalism”.
-Swami Dave
By Mike
January 26, 2009 12:07 PM | Link to this
I rarely agree with Jay, but this article is spot on.
My pitchfork is already sharpened up nicely.
By Paul
January 26, 2009 12:10 PM | Link to this
ByteMe
“Encouragement.” That’s a good word. This issue is another that’s often presented as ‘either-or” either inflate or drill. Drill or tuneups. etc etc etc. When presented with a choice of two things that have a benefit - pick both! Drill and inflate. Do your own part and have the gov’t do theirs.
By Taxpayer
January 26, 2009 12:18 PM | Link to this
Anyone arguing against the use of simple techniques such as proper tire inflation in order to reduce fuel consumption clearly lack the education needed to comment in the first place.
By RW-(the original)
January 26, 2009 12:20 PM | Link to this
Paul,
I hate to flog this dead horse, but that 4% times a gazillion number would require that the entire country was driving around on flat tires and then suddenly inflated them properly.
Of course then we’d need a government sponsored series of PSA’s telling you how to use the compressed air filling stations and a whole new level of government health care to attend to the people that missed the tire and blew out an eardrum.
By ByteMe
January 26, 2009 12:25 PM | Link to this
I also think a gas tax that increases each month by a penny for the next 10 years is a way to “encourage” lowered consumption of oil-based products and encourages alternatives to proliferate in the market. We could call it a “carbon tax” or a “national security tax” if we need a name for it (which we probably do), but the effect of reducing oil consumption is the desired outcome for our nation, so why not provide some market incentive for it to happen in a reasonable timeframe?
By Shawny
January 26, 2009 12:26 PM | Link to this
I think pitchforks would be a good investment idea, particularly when the details of the stimulus package are revealed.
By Jack
January 26, 2009 12:28 PM | Link to this
Seems to be plenty of blame and greed to go around. Let’s hope that this next bunch can be held accountable without all the excuses. Bush had it for eight years and they need to man-up to the consequences—if you are in charge of a team, a government, a classroom, a church, then it seems to me you have to take the heat and the credit. Obama needs to do his best leading this country to a future that’s more secure for my daughters. Period…Good luck to us all.
By JackLeg
January 26, 2009 12:29 PM | Link to this
The problem with the bail outs is that we are giving money to people who have already proved that they don’t know how to handle it. If they took the TARP funds and dispersed them to every American citizen that would be roughly $30,000 each. Then we as taxpayers could spend the money as we please, like on mortgages, cars a goods to help the economy.
By CommunistAJC
January 26, 2009 12:31 PM | Link to this
Obama is using the same decorator that decorated Merril Lynch to decorate the White House. How’s that for hypocrisy?
CHAINS WE CAN BELIEVE IN!
By ByteMe
January 26, 2009 12:36 PM | Link to this
CommunistAJC: yeah, and he’s breathing the same air as Thain!! Off with his head!!
Nut.
By Taxpayer
January 26, 2009 12:36 PM | Link to this
ByteMe,
If you want that tax to truly alter behavior, then it should be applied to the compensation of executives at auto companies, oil companies, etc. They’ll have the appropriate monetary incentive to initiate changes that will truly trickle down to the masses. Perhaps increasing their income tax rate by 10% per year and withholding it from the pay rather than assuming that they’ll do the right thing and file an appropriate tax return along with payment of taxes dues is an approach that will get their attention. We could call this new tax a “behavioral modification for the good of we the people tax.” The executives would be required to file a tax return and prove that they have earned a tax refund instead of looking for ways to avoid tax payment. This form of taxation could probably even be used effectively in other businesses as well.
By williebkind
January 26, 2009 12:38 PM | Link to this
El Rusho will have a bi-partisan proposal to fix things at 1pm est. So you should listen to him! Then write your congress/representative and ask them to include his proposal. Hey it may take an ordinary citizen to fix this mess.
By BDAtlanta
January 26, 2009 12:38 PM | Link to this
Swami Dave,
I thikk you have your “class” concerns exactly backwards. We haven’t seen a transfer of the wealth of working people going to the non-workers. That’s not the problem.
The problem is that the wealth of the middle-class workers have been strip-mined by the upper classes/ ultra wealthy through 401k’s and open stock trading.
Where do you think all that bonus money they pay themselves comes from? It doesn’t just appear out of nowhere or drop off the money tree. It comes from profits made on our backs. It comes because they no longer provide us with pensions.
It comes because they now provide us with 401k’s which are 96%+ financed with our own money (company match? hehe, pphllbbbtt!!!) Think about it. The people who we just found out have been ripping us off (Wall Street) own the 401k’s where we have been shipping our nickels and dimes off to for the past 20-30 years.
I haven’t seen any of that cash I sent them. Does it exist? It exists on paper, but so did all those questionable real estate assets.
Wall Street has been on a tear the last 20 years because of the money we have funded them to use in our 401k’s. Folks, 401k’s are just an IOU from Wall Street bankers.
By JackLeg
January 26, 2009 12:41 PM | Link to this
The problem with the bail outs is that we are giving money to people who have already proved that they don’t know how to handle it. If they took the TARP funds and dispersed them to every American citizen that would be roughly $30,000 each. Then we as taxpayers could spend the money as we please, like on mortgages, cars a goods to help the economy.
By DB, Gwinnettian
January 26, 2009 12:41 PM | Link to this
“If they took the TARP funds and dispersed them to every American citizen that would be roughly $30,000 each.”
Jackleg, wait a sec…
~1 trillion / ~300 million = yep, about three grand. Not thirty.
Kinda wish people would keep that in mind. Sure, I’d love to get a found-money kinda cash handout, who wouldn’t? But there isn’t quite that much to spread around as people seem (want?) to imagine.
By JackLeg
January 26, 2009 1:07 PM | Link to this
Regardless, $3000 in my hand is way better for the economy than several hundred million is some rich guys hand…
By ByteMe
January 26, 2009 1:09 PM | Link to this
Taxpayer,
You have it exactly backward. Incentivizing the executive won’t incentive the public to buy the auto. Especially if they already have a perfectly good klunker that gets 8 mpg and leaks oil.
Instead, if you make it more expensive to buy gas, you’ll get the same behavior we saw last summer with people driving fewer miles, using less gas, looking to buy cars that get better gas mileage (which then helps Detroit and Japan sell more cars of the kind that use less gas), and the market solution works for all. And the money from the tax (which will be significant) can fund alternative fuels or alternative transportation infrastructure, doesn’t matter at that point, since both are needed and will be even more needed as we kick our driving jones.
By ByteMe
January 26, 2009 1:12 PM | Link to this
JackLeg: turns out that it’s not. You got $300/$600 last year and it did NOTHING for the economy.
Money in your hand has a lower “multipler effect” than money in a bank’s hand… IF the bank actually lends it out. The problem right now is that the velocity of money has slowed dramatically and the only way to get it going faster is to get it into the hands of the institutions that have the largest effect on velocity. And that is the institutions that are going to loan it out to fund job-creating activities… and that’s the banks, for better or worse.
Ok, maybe that was all too technical for here….
By Copyleft
January 26, 2009 1:15 PM | Link to this
Commie: “Using the same decorator”? Really? That’s all you’ve got to whine about?
That’s… that’s just SAD, is what. You must be really desperate to resort to an attack as lame, trivial, and meaningless as this. Sheesh, the November defeat really hit you hard, didn’t it?
Get some rest, buddy. Maybe Obama will actually do something wrong someday, and then you can go to town.
By ButtHead
January 26, 2009 1:17 PM | Link to this
I have heard for years that the dimacrats don’t believe in trickle down economics, so why do they suddenly believe it works? Yeah lets give money to rich untrustworthy people and expect that to save the economy. I hear Madoff is looking for a job…
By Taxpayer
January 26, 2009 1:19 PM | Link to this
ByteMe,
If you incentivize the executives, they will produce all the appropriate propaganda needed in order to incentivize the public — much like politicians do every election cycle. It’s trickle down at its best.
By AmVet
January 26, 2009 1:21 PM | Link to this
Is it really possible that Johnny “Who?” Isakson is trying to make a positive impact?
Along with North Dakota Democrat Kent Conrad, he is demanding an investigation into this debacle.
Modeled after the 9/11 Commission, along with subpoena power and the authority to pass on to prosecutors any evidence of criminal activity and wrongdoing, it will last 12 months.
Now that there is no Bush administration to protect (unlike with the aforementioned panel) there may just be some justice for those who are culpable.
But will the former and current heads of Freddie, Fannie, Moody’s and the innumerable crooks and swindlers in corporate America and in the government ever really be held accountable?
Pardon me while I stop laughing.
While Reagan, Clinton and others were properly paring down welfare rolls, they were at the same busy ramping up corporate welfare.
I remember how angry the righties use to get whenever I mentioned those two words together.
Corporate welfare??? WHAT corporate welfare?
Now that the middle class has taken it on the chin yet again, some seem to realize it was and is still going on in a HUGE fashion.
Subsidies to ship jobs overseas.
Endless tax loopholes and tax free zones.
Ponzi schemes, shell games, shadowy overseas operation and cooking the books. Brought to you by the titans of industry.
And AIG throws lavish parties and the banking CEOs, CFOs, etc roll in even larger amounts of filthy ill-gotten money.
And the trickle down your thigh “conservatives” see no problem with it at all.
End all regulations and kill all the regulators! That will solve this mess!
And let the corporations with their concentrated, unregulated wealth and power continue to be exempt from the the rule of law and full disclosure.
I ask again, where is Robespierre when we need him?
By ByteMe
January 26, 2009 1:23 PM | Link to this
Taxpayer, but as we’ve learned these past 8 years: trickle-down takes too long to work for the entire economy. Works great for the executives, though!
By ButtHead
January 26, 2009 1:23 PM | Link to this
I have heard for years that the dimacrats don’t believe in trickle down economics, so why do they suddenly believe it works? Yeah lets give money to rich untrustworthy people and expect that to save the economy. I hear Madoff is looking for a job…
By citizen
January 26, 2009 1:25 PM | Link to this
To Rascal @ 8:53am. I agree wholeheartedly! I’m a conservative but am so disillusioned with our present leadership, especially John Boehner from Ohio. All he does is complain about the Democrats’ agenda. He has no plan for getting this country back on track, just complains that ‘their’ plan won’t work. Time for the Libertarian Party to become more focused on the economic problems and get as many young people involved as possible.
By RealityKing
January 26, 2009 1:30 PM | Link to this
We don’t need more transparency in TARP funds. We need an end to TARP funds, and all the other bailouts. Building roads and repairing schools is one thing, bailing out obese state budgets and fulfilling laundry lists of socialist spending ideals is quite another. Responsible spending means no spending unless absolutely necessary.., every successful businessman knows that.
By Taxpayer
January 26, 2009 1:33 PM | Link to this
Agreed, ByteMe. But, we’re dealing with Republicans and trying to formulate solutions that they cannot help but agree to. Any time you can work the magic words, trickle down, into the proposal, it’s sure to be a hit with the Republicans.
By Paul
January 26, 2009 1:34 PM | Link to this
Detroit leaders showed how out of touch they were when they flew in corporate jets to testify before Congress. Many demanded the top execs be fired as part of any bailout.
Now we’ve given 45 billion to Citigroup - and they’re going ahead with a purchase of a $50 million jet. They’d made a down payment, evidently now they have the cash to complete the purchase.
I think one can make a much stronger case to fire the financial sector execs than the Detroit execs. Maybe a choice is in order: early retirement with no golden parachute, or, face the pitchforks!
By JackLeg
January 26, 2009 1:40 PM | Link to this
ByteMe, I can see that the first $350 billion did a great job of helping the economy, AIG had a big party, so did many other banks, so let’s throw good money after the bad. If this is the “Change” Obama talked about then we are in a world of hurting.
By ByteMe
January 26, 2009 1:43 PM | Link to this
JackLeg: it’s not either-or. I didn’t say “throw money at the 15 largest banks with no oversight” either.
Think it through.
By catlady
January 26, 2009 1:46 PM | Link to this
I want my pound of flesh, starting with a very well loved part of their anatomy. A public removal would serve to discourage some of this rampant greed.
If you invest money you may lose it. If you join the National Guard, you may have to fight.
They should allow folks free access to their 401k s now with no penalty. It is unconscionable that folks have been required to watch their contributions dwindle and can do nothing about it.
By RW-(the original)
January 26, 2009 1:49 PM | Link to this
Paul,
A French jet at that.
By echo
January 26, 2009 1:50 PM | Link to this
i’ll say it again, if the ridiculous theory of trickle down were true, with all of the people who are already filthy, dirty, stinking rich getting huge undeserved and unearned bonuses, shouldn’t this economy be absolutely on fire right now?
By CommunistAJC
January 26, 2009 1:58 PM | Link to this
Copyleft, Sad? No not really. Obama and the rest of the anti-capitalists in this country were bashing Merrill Lynch for spending tax payer money on this decorator. Hypocrisy comes in when Obama used the same guy with taxpayer money.
By Paul
January 26, 2009 2:01 PM | Link to this
RW-(the original)
That’d be like the Detroit executives driving to Detroit in Toyota Priuses.
Here’s the story for the rest:
Link: Citigroup completes buy of $50 million jet
Greed, arrogance, sense of entitlement. Jay’s covered most of the bases. How about out of touch, stupid, clueless? Hate to get personal, but geesh. Wait a minute, this is personal and a matter of character. So the adjectives stand.
By catlady
January 26, 2009 2:01 PM | Link to this
DB, the original bailout divided by legal ADULT American citizens comes out over $30,000 each.
By @@
January 26, 2009 2:04 PM | Link to this
Sorry, jay……..can’t be sharing my pitchfork for the revolt. I’ll be using it to turn the soil in my survivalist garden. I’m just hopin’ the gas company doesn’t require a lease agreement. They haven’t so far, but who knows?
Gas is a commodity for Putin!
By Fly_on_the_Wall
January 26, 2009 2:30 PM | Link to this
I’ve always felt that our problems were more akin to what started the French Revolution then what the religious folks always pointed to - decline of Rome.
As to pointing to who is at fault, many have said that there is enough blame to go to both sides but I feel the Republicans should shoulder most of the blame since it was their economic policies over their 12 year control of Congress and Bush’s years as POTUS. I seem to remember Bush on TV giving one of his ever memorable speeches that he was going to make homeownership one of the cornerstones of his Presidency. So where do the Democrats have to take the blame for government forcing banks to loan to people who couldn’t pay it back? Did all the banks cry at this? I don’t remember that either I just remember the banks all gleeful at packaging those loans up and selling them to everyone around the world. Looks like the Icelandic government fell over the weekend because of this economic crisis. How many more ‘friendly’ governments will fall because of ‘capitialism’ at its finest?
By DB, Gwinnettian
January 26, 2009 2:37 PM | Link to this
“DB, the original bailout divided by legal ADULT American citizens comes out over $30,000 each.”
How are you defining “legal adult?” Are you claiming there are only 30 million of them living in the US? Might’ve been accurate in 1900 or thereabouts. Not today.
By JackLeg
January 26, 2009 2:56 PM | Link to this
ByteMe, you are correct let the government have oversight, just like Freddie Mac and Fannie May, they did such a good job there. How about social security another great oversight by our government; government oversight just means that they do nothing as their cronies get rich from taxpayer dollars.
By Eric
January 26, 2009 4:12 PM | Link to this
Jay said:
“I’m aggravated and frankly astonished to see the sense of royal entitlement to other people’s money that developed over the years on Wall Street.”
Then again, now that your saviors Obama, Reid, Pelosi, Frank, Dodd, Schumer and Rangel are running the show I suppose you’re giddy about all the money they’re going to seize from our children to feed their sense of entitlement.
Truly pathetic.
By Jake
January 26, 2009 4:33 PM | Link to this
If this were a true democracy, we’d roll the guillotines into Wall street and Washington and clean up this mess. But no, 98% of you morons have been polarized and mesmerized into just shouting Rethuglicon and socialist at each other all day long!
By Pogo
January 26, 2009 4:47 PM | Link to this
Pitchforks, tar and feathers. Christopher Dodd, and Barney Frank could use a good dose of all of these. They oversaw two of the biggest contributors to this whole banking mess and they did nothing but stonewall any attempt to reign them in because each of these gentlemen had their own self serving agendas. Right now our government is as full of corrupt politicians as it has ever been. Blaming it on the CEO’s is a joke. Yes, some of them are thugs, but they are thugs because our government allowed them to be thugs. I believe in as little government intervention into our lives and into business as possible but even the things our government representatives are supposed to monitor, like high finance, they cannot and do not choose to control because they realize there is money and power to be had for themselves.
Our government “representatives” and “servants” are supposed to oversee all of this and do what is in the best interest of this country and it’s people. Unfortunately, they are just as deeply imbedded in this mess as the CEO’s. Maybe even worse. There is not much room for optimism about the future because Obama is looking less and less like a leader and more and more like an instrument to be plyaed by the old, outdated and entrenched libri-crats in the House and the Senate. He has too much political capital which is owed to too many people like George Soros and any number of the leftist organizations that supported his campaign. I don’t see the corruption ending anytime soon. I was willing to give him the benefit of the doubt until he appointed a tax evading Treasure Secretary and Hillary whose husband has taken millions from some our worst enemies. That was proof enough for me.
Jay, you are a liberal but on occasion, I have seen even you come out of your leftist fog and actually voice opinions about issues which you knew in your heart of hearts as being right, even though you knew they were not in walking lockstep with your buddies on the left. This political party stuff is going to kill this country. Unless we wake up and start thinking outside of the party box and start getting rid of the rotten apples in government, we are sunk. I wonder sometimes if people understand exactly how bad of shape this country really is in. And republicans AND democrats are to blame. But mostly, “WE” are to blame. We carry on our crusades and our tirades with our “us against them” political philosophy while in the meantime we are all played for fools by the politicians and our leaders.
By Hillbilly Deluxe
January 26, 2009 4:56 PM | Link to this
I have an idea. Since the left and the right can’t agree on what is and isn’t torture, how bout some clinical trials? Take Fund, Thain, Madoff, etc., etc., and try out the various methods in dispute on them. We can have databases, slide rules, the whole bit. Measure the results.
Pitchforks are too damn easy for this crowd. Make it hurt.
By The Conservative
January 26, 2009 5:05 PM | Link to this
I am vindicated. Bookman’s piece is a summary of what I’ve been blogging since last fall. (Except I’d never have gone to the arcane pitchfork metaphor, which has been overused and it’s just not interesting at all). Buffet himself puts me alone on a pedestal, while all the economists on this blog made total fools of themselves trying to explain what happened and how we can fix it.
I truly am the only choice for Wooten’s replacement.
How many times did Bookman use the word Pitchfork? What a clod.
By cc
January 26, 2009 6:27 PM | Link to this
hey did ya see, the ajc is looking for a new conservative columnist, the best part were the requirements: complete frontal lobotomy and must have own tether!
By Incredulous
January 26, 2009 6:42 PM | Link to this
Amen to what Eric said @ 4:12 p.m.
Government is the growth industry. The Democrats under Obama will make GWB and the Republicans look like skin flints by comparison. And that’s very difficult to do.
Should nationalized health care be implemented, this country is finished. USA = France.
Oh, and Jay—why don’t you serve as the conservative columnist? You can write it such that it makes conservatives appear to be stupid (which will happen anyway as per “cc”s comments) and it won’t cost the ajc anything extra.
By Dale Gribble's GOP
January 26, 2009 11:58 PM | Link to this
AC/DC and Commie could rake my garden with their pitchfork protrusions.