In a New York Times Op-Ed Monday titled "The Angry Rich" Paul Krugman railed against the angry rich as "decision time looms for the fate of the Bush tax cuts." He cited the financial wheeler dealers who had been bailed out with taxpayer funds but were furious that the price of these bailouts included temporary limits on bonuses. He concludes his missal with the appropriate incantation that for the financial nabobs "sacrifice is for the little people."
In all, tough words. But then, even before one can put the paper down appears a jaw dropping validation of Krugman's observations. There comes one of the doyens of the financial establishment, Charles Munger, the Vice Chairman of Berkshire Hathaway and long time associate of Warren Buffett, having told University of Michigan students but a week before that "we shouldn't be bitching about a little bail out" of the banks. And then, adding insult to this deeply self interested observation, we are all instructed by this multi-billionaire that the country's unemployed should "suck it in and cope."
This from one half of the Vaudeville Act (together with Warren Buffett, see "The Goldman Sachs Settlement, The Wall Street Journal, Warren Buffett and the White House" 07.25.10) that traveled the country to wherever they could find someone with ink to print or a microphone or television camera to laud and exculpate Goldman Sachs for all its daring do with Abacus deals, CDOs, AIG covered CDS', Derivatives, Greek financial engineering, Tankers at anchor oil trades, and on. Here's Munger on Forbes TV commenting on Goldman's behavior. "Given the world they were in they did OK" and "There are things perfectly legal to do and that everyone is doing and will earn a lot of money," by way of exculpation of Goldman. No "suck it in and cope" here.
Mr. Munger and especially Mr. Buffett are exemplary philanthropists and have advanced their social obligation to their communities with great commitment. But here again a great swath of Americans whose sense of personal identity and pride was tied to their eleemosynary activities in their communities are now bereft of even this intrinsically important part of their lives. The tithe of zero is zero. Worse, in too many cases, to their grave personal dismay, they have become the recipients of philanthropy rather than the givers.
With Berkshire billions invested in Goldman Sachs, Wells Fargo & Co. and the risk of their having to put up additional billions as collateral under the new financial regulation bill, Mr. Munger, Mr. Buffett left no stone unturned, no political access to even the highest reaches of government unattended, in order to formulate bailout and financial regulation policies supportive to their interests. No "suck it in and cope" here whereas the "suck it in and cope" crowd, without means, without access were left dangling to their own devices. One set of rules for Wall Street, one set of rules for Main Street. What's wrong with this scenario? Something very basic to what once was our understanding of America. And it needs fixing NOW!
1..The same thing that is wrong with a crime syndicate raking in huge profits from their operations which result in ruining the lives of thousands of people. Yes, they work hard at it. They have demonstrated imagination, organizational skills in piecing off authorities and managing logistics. They are enterprising, intelligent and efficient .
2. They deserve the fruits of their success. Right ? WRONG! Unike more worthy endeavor, their activities do not contibute to society in any positive way in terms of goods and services.
We should have bailed them out the Swedish way.
http://www.ritholtz.com/blog/2010/09/gone-swedish/
The big banks continue to account for home equity loans as 100% collectible, even though there is no equity left in the homes that are used as security.
"We have learned that regulators have been complicit on a variety of financial charades over the years!!
Ultimate Catch-22 you say? Perhaps. If the banks have such serious capital issues, then how is it that they have been able to pay such enormous bonuses recently? Think the banks have the regulators and Washington over a barrel? Just because nobody is acknowledging the elephant, does not mean it is not casting a VERY LARGE shadow."
http://www.senseoncents.com/2010/09/the-giant-elephant-in-the-room/
It will mean lean times for a while, but it has to be done "pour encourager les autres"
a revolution became a witch trial became madness--how many poor died??? this is a solution??? I want the people in the streets demanding fair laws,tax reform, etc. not to stand hip deep in blood! they killed far more chambermaids than countesses
by David Cay Johnston
Starting at the top.
We have lost all sense of public good, common good and common wealth. In fact anything with common in it must be socialist and therefore eradicated. The purpose of a government is public good about which neither we or our government any longer even talk. That is because the aim of our government has been subverted into "what is good for corporations and their owning classes must be good for the people".
Even in Financial Times one can read that what we have is no longer working but all Obama appointees are of the sort who don't recognize this fact and continue believing that the same old corporate designed stuff will eventually work out. We shouldn't be surprised.
http://www.ft.com/cms/s/0/0611a72a-c66f-11df-8a9f-00144feab49a.html
_______________________________
- Do you feel that your ideology pushed you to make decisions that you wish you had not made?
- Well, remember that what an ideology is, is a conceptual framework with the way people deal with reality. Everyone has one. You have to -- to exist, you need an ideology. The question is whether it is accurate or not. And what I'm saying to you is, yes, I found a flaw. I don't know how significant or permanent it is, but I've been very distressed by that fact.
- You found a flaw in the reality...(!!!???)
- Flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak.
- In other words, you found that your view of the world, your ideology, was not right, it was not working?
_______________________________
An Innovative Credit Free, Free Market, Post Crash Economy
A Tract on Monetary Reform
http://post-crash.com/credit-free.html
_______________________________
The choice of Elizabeth Warren to be central to the process is encouraging, the departure of Summers, tardy, but the names being bandied about to replace him offer little hope for reform.
Wall Street or the Banksters, whatever name we choose for this cesspool of crime will not be cleansed with a feather duster and a broom.
We need bulldozers, to start in the middle and push this rancid stink west into the Hudson and east into the old sound.
I suggested yesterday that I would like to see Warren joined by Krugman and Robert Reich, people with a sense of populism in their hearts and more than a gossamer tether connecting their minds with reality at the helm.
A reader (for whom I have deep respect) responded to that suggestion with:
"Oh... you dear, sweet man. Don't we all. It will never happen, of course. They're actual, realistic, populist economists. Naturally, that takes them COMPLETELY out of the running."
So maybe I'm naive but I don't believe we will solve this crime by the addition of more crooks, it's time for cops, indictments, convictions and jail time.
I... no we, want our damn money back and we want someone to pay for it, not to feel "our pain," but to feel their own damn pain.
His effectiveness was proven by the way he was setup by the financial criminals he was investigating at the time. They can't blackmail him now, can they?
This tends to create a blind spot with regard to at least parts of the FIRE sector somewhat larger than some people might realize, and we ought to be VERY conscious of the extent to which the FIRE sector is skimming the cream -- 40% of the production of the economy, according to Joe Stiglitz, speaking in Queensland, Australia in late July -- from what ALL of us work to create.
Finance, Insurance, Real Estate ... intimately connected ... and these fine people know where their bread is buttered, until proven otherwise.