Paying the Piper

Time to blame some folks. All of us.

The electorate gets the politicians it deserves. 

We elected a former movie actor (not even really a star - no one thought he was that good) to the presidency in 1980, who based his speeches on a dubiously mixed message of hope, optimism, folksy avuncularity, and vicious red-baiting (does anyone remember red-baiting?). He began the process of deregulation of the banking system, fired air-traffic controllers for going on strike for better wages and working conditions (after which, we had a few more accidents than before), and told lies as anecdotes that the press rarely bothered to fact-check. His administration subverted the constitution, sold arms to terrorists, propped up aging dictators against popular uprisings, and even helped train folks who went on to run Death Squads. I hadn't heard of Death Squads before the Reagan presidency.

Then we elected his lieutenant. A former head of CIA, a Texas oilman who didn't live in Texas, whose father was a supporter of Nazi Germany during WWII. He didn't do much except invade a country that had not threatened us, and push back Saddam into Iraq, while watching Saddam murder all those that the President had told to rise up against Saddam, effectively gutting any Iraqi resistance movement there was ever a hope of having. Bush.01 watched as the Soviet Union imploded, now generally believed to have been inevitable.

Then there was Bubba. The Dot-Com boom was caused as much by the people who believed in it unquestioningly as it was by the flim-flam artists who thought they could make money out of nothing. While the Dot-Com thing was happening, America was prospering, and we kept thanking Bill Clinton for that prosperity, as well as Alan Greenspan, the "master." No matter that the only thing Bill and Alan did for the economy was to deregulate it to the point where normal market corrections would never happen until someone started yelling about the emperor wearing no clothes. And then we would find that none of us had, or could afford, clothes.

During that prosperity, Americans became more complacent than ever, allowing our politicians to do what they would, and accepting journalism's slide into a contest between who could shout the loudest versus, well, who could shout the loudest back. Then Phil Gramm and friends decided to end the protections in the banking system, and better yet, deregulate things like derivatives and swaps to the point where they are now a market valued (until recently) at around 500 trillion dollars. Really. That's the insane number that's been bandied about.

During the immediately previous administration (also known as White House Occupant Shrub, or Bush.02), since the regulations had been axed, why not oversight as well?

And of course, it's 500 trillion dollars of exchanges between banks and bankers. Perhaps the money is only around a trillion, or even a few hundred billion. But it all changes hands every few seconds, thus driving the virtual value up and up and up, until it sounds simply impossible.

Meanwhile, prosperity, prosperity, prosperity. If I can afford a widescreen TV to hang directly over my bed, I'm just fine, and so is our country, and so is our economy.

Ummmm.....  nope.

We learned in the last decade that folks who run companies can tout their own stock price, and even hire actors to play traders that are making fake deals with fake oil, or (if you're one of the lucky ones) they can run your state's economy into the ground by holding back energy and raising the price on what they do release to you. This gives you an empty pension, a recall election and a Governator. 

We learned that if you want to, you can drive the price of oil through the roof for the fun of it, because you really, really want to get into the Guinness Book of World Records.

We learned that if the guy running the country is someone you'd like to have a beer with, that doesn't mean he's qualified to run the country. For example, I like to have a beer with my cats.

What we didn't learn was that if we don't keep a careful eye on our stewards of the economy and the general welfare of our country, everything goes to hell. Well... now we know.

The question is, what will we do with our newly rediscovered power?

Buddy, Can You Spare a Mil?

Obama and his economic team at the White House have finally done something a progressive can wet his/her pants about: they want to put a compensation cap of $500,000 on anyone working for any firm that receives any more TARP funds, including CEOs. To which I say, about effing time. In years past, there used to be a limit on how much a corporation could write off on salaries, but I believe that must have gone away, because what would be the point of paying people huge salaries if you couldn't write it off your corporate income tax?

And the response by the various Repugnican talking heads and of course, business-folks who think about these things all the time, has been pretty predictable: "How do we retain top talent if we can't pay them s&%tloads of money?"

Seriously. They keep calling these loan-sharking imbeciles "top talent."

WAKE UP!!! Haven't you people been watching what's been happening? These fine examples of top talent have been working specifically to make themselves a great deal of money by exchanging feathers & sand, and calling it gold. All the while, regulators have been watching this and seeing the money going to the major shareholders and repeating to themselves endlessly that it's "gold not feathers, gold not feathers, gold not feathers."

Somehow, by exchanging debt instruments, these geniuses have created a lot of real money for themselves while their investors (people like you and I) not only didn't get anything in return, it's like we just put all of our money on black and lost.

What I don't understand is why the Mafia didn't come up with this scheme a whole lot earlier.  In the book Wiseguy, Henry Hill describes stealing bonds and selling them for ten cents on the dollar to Wall Street bankers who would then use them to collateralize loans from foreign banks (and you only needed about ten percent of the value of the loan in collateral). Sounds so familiar...

What's missing in all of this is that it's the US economy. The whole damn economy. If these "wise stewards" are all we can hope for, I tend to agree with Chris Hedges latest article: It's Not Going to be OK.

If we don't put some kind of restrictions on these people, they will continue to do the wrong thing. Personally, I only expect to pay people for doing the wrong thing when I sign my check over to the IRS every year.

Oh... right...