Chuck Woodsy, conservative poster on this blog, recently pointed me in the direction of the following this article and this list regarding how we got to this point in our economy. Chuck has now seen the light of day regarding what happens when the free market is allowed to butt fuck all of us sans lube.
The list of the Dirty Dozen intrigues me the most. Why? Because it neatly and clearly shows the actual people responsible for fucking over America as opposed to the "evil spirits" the right has manufactured out of their asses to jibe with their paranoid beliefs about "gubmint." Only two on the list are government officials (Rubin and Paulson) with two more being part of quasi government agencies (Greenspan and Cox). All four of these men were completely worthless and drank the free market Kool Aid.
A fifth is Phil Gramm, former Republican Senator from Texas who was the Senate Banking Chair from 1995-2000. Intelligent minds think alike as the list mentions Gramm-Leach-Bliley (as I have repeatedly) as being a major catalyst to our current situation. Strangely absent from the list is Barney Frank, the right wingers favorite whipping boy. Sorry righties. Frank may be a putz and a buffoon but he has nowhere near the power to do what has been done. Neither does our government for that matter.
But the rest of the list does. They are all CEOs of the biggest financial institutions in our government and I'd love to hear what all of you think after you read what they did. Take a look at people like Cassano, Weill, and Cayne. What is the difference between these fucks and Bernie Madoff? Zero. They were allowed by the dicks mentioned above as well as Presidents Clinton and Bush to rape and pillage as many villages as they could get their grubby mits on and destroy.
And righties? Please try to bring your "it's all the government's regulations" horse shit to the table now. It's always been weak to begin with and now all it does is further the point that you have absolutely nothing to offer anymore which essentially makes future Democratic victories in coming election years more likely.
7 comments:
M, the 'free market' of your supposed Golden Age of Capitalism (whenever that was) is really no different from the free market of the last 30 years.
When you rail against the free market, the question has to be assumed that you have some alternative - which I believe you would say is the market, just with more regulation. Which is exactly what we've had since the New Deal. The argument then is about the boundary conditions of regulation, not the complete absence of it. You cannot point to any legal market and say it is completely free of regulation - not even financial derivatives, which still fall under some general corporate regulation (e.g. Sarbanes-Oxley). Sorry dude.
This is all spectacularly silly given your insistence that there once was a Golden Age of Capitalism with just the exact right amount of regulation.
And for someone who decries so angrily the naming of demons by the right, have you ever looked at how you seek evil-spirits yourself? I truly think that's why you hate Rove so - he does it much better than you.
Just a quick follow-on thought. The stage was set when a non-descript hedge fund called Long Term Capital Management was not allowed to fail. The govt could've just let the damn thing die under the weight of the arrogance of its founders, but the govt would not just let the market work. Instead, the Feds pumped in $3.6B to pump up a company that was only four years old and was nowhere near "too big to fail". Two years later the company folded anyway. But all of Wall Street paid close attention - no matter how stupid, convoluted or flat out dishonest your business is, the govt will bail your ass out.
Now, for FUCKSAKES, stop calling that the 'free market'.
There were certainly many important points presented in the Rolling Stone article. JI's comments concerning Wall Street's culture of "bail-out" mentality is important, if only simptomatic of the larger disease. Additionally, and to that point, defining America's market as "free," is, and always has been an oxymoron.
For once, can we not pepper this issue with political agenda? I'm not sure what "seeing the light" means; well, I actually do in this case. You give me far too much credit as I do not pretend that, prior to all of this, I could define a derivitive, from a hole in the ground. And it's looking more and more that Washington, in the late nineties, suffered the same issue. Let's just agree that both sides of the isle look pretty goddamn stupid right now, and just leave it at that.
What makes me so mad, is how obvious this all has become now, yet, while in action, nobody could see it. That Wall Street was this institution to be trusted - I mean, we are all culpable. We all just sat around, laughing gleefully at our collective good fortune in real estate. Oh, how smart we are, as we collected our nifty little tax write-off and walked it down to Chevy for that shiny new Silverado, or that snowmobile, or that trip to Jamaica Club Med. We giggled over 50% annual returns on our 401K; hell, reallocate to aggressive!, let it ride! Yet, the signs were all around.
As an urban planner, I saw it coming 5 years ago. I often asked the question, "how can we continue sprouting new neighborhoods from cornfields in Rogers, or Montrose, or Moose Lake?, where are we going to find the buyers able to afford a 400K factory home in the middle of nowhere?" Yet, they somehow kept materializing, and we kept building, and builders got fat, and the banks got fat, and suppliers got fat, and the dealerships got fat, and nobody looked for the catch . . . cause, there is always a catch, right?
Well, the catch was . . . that Wall Street did, what Wall Street does best. It found a way to turn "regulation", against itself. And that, is the issue. Wall Street, was just doing, what our "free market" culture, required of it - "Make me fucking rich." Cause if you don't, I will find someone who will. And the more the money flowed, the more cocky we all got. And since it seemed to be working, why ask questions?
Bottom line? The unfortunate fact is, the people who orchestrated the collapse, are the same people orchestrating the cleanup. And if and when this all turns around, it will still be them in charge, and stronger, because their roots will be too deep to dig out, and congress will officially have no balls, cause, well, we are officially broke.
It's often hard to see history occurring, but I firmly believe we are all witnessing the point in time when the "American Dream," peaked. When America, peaked. Can someone tell me what the nation debt is? Can we print that much paper?
Juris,
As I have stated before, I define the Golden Age of Capitalism when CEOs made 20-30 times the amount of money their employees did, not 500 times. People did well and yet weren't corrupt greedy infants who wanted more rattles for their crib. This period could be defined as WWII to the Reagan Era, which is when things went south. Gee, I wonder why...
My alternative is not regulation but oversight. There is a difference. There needs to be laws in place that prevent people like Joe Cassano from fucking up our lives. Those laws need to be enforced by someone. I have no problem if it is not the government. So you tell me...who then?
Your second post illustrates an example that really has nothing to do with what caused all of this. It was lack of oversight combined with the ass pounding that Glass Stegall took in 1999 (both Dems and Repubs are to blame) that brought us to where we are now. How else can you explain Cassano being allowed to buy mortgages at a fucking insurance company? Had Glass Stegall not been undone, he would not have blown a 500 billion dollar hole in the universe.
Our economic problems are in large part due to the "tyranny of unreasonable expectations." For years Wall Street has demanded that companies have growth rates of 10, 15 and 20%. If a company failed to do this, they got hammered in the market.
Is your company producing great products and regular dividends with a steady revenue gain of twice the rate of inflation? Did "analysts" predict you were going to increase revenues by 12%, but you only pulled in 11%? Too bad. You lose. The market will kill you for not being flashy enough, because day traders can't jack your stock up and down and Get Rick Quick.
The boards of companies set up incentive programs that pegged executive bonuses to increases in stock prices. The only way to get the stock price up is to post numbers that are crazily out of line with reality for most kinds of companies.
Startups and companies cashing in on tech booms or the opening of new markets can post those kinds of numbers. But boring insurance companies and humdrum banks that just lend money to home buyers and small business? That's just not going to happen. Until these geniuses figured out how to trap people in usurious loans and the crazy financial instruments that led to their (and our) downfall.
Wall Street traders engineer their own collapse almost every time. In 1929, in the 90's tech boom and bust, and this time around. Wall Street ignores common sense and coerces companies to make moves that are catastrophically bad policy in the medium and long term. Wall Street buys and sells vapor. The rumor-mongers can make short-selling hedge fund managers fabulously wealthy by destroying a decent company's stock price. Then takeover artists snap it up, sell it off in pieces, stealing all the real assets, and send the profits to banks in the Caymans where they pay no US taxes. Or another giant company takes it over, producing a more monstrous behemoth with monopolistic clout that's "too big to fail."
We are at the point where huge increases in profits are simply not possible for most companies. China can post huge growth numbers because half their population is still plowing fields by hand. The US and Europe have urbanized. Most every family has five TVs and three cars (though sadly we are losing all that now).
The Western World has reached a point of steady state growth -- a rate that's already not sustainable in the traditional ways. Most companies can expect only nominal growth and modest profits. By trying to push growth and profits beyond reason we will destroy our own health, ruin the environment, run out of energy and resources, and start wars with other countries as we compete for these things.
It's not the end of the world. Companies working on things that will be in high demand can make huge profits. That will be things such as highly efficient appliances, high-mileage cars, environmental restoration, new sources of clean energy, all things which Dick Cheney and his cronies in Big Oil have been working diligently to destroy for years.
This period could be defined as WWII to the Reagan Era, which is when things went south. Gee, I wonder why...
Let's consider the steel industry in this golden age. There was no international competition post-war, so short-sighted management bought labor peace at an exorbitant price and failed to invest for the future. By the 70s - well before Reagan - these companies and the towns and workers that depended on them were in the shitter.
Or how about the airlines. Look at Pan Am, which was all but dead before Reagan, and now look at Southwest. Though give credit where it's due, it was Carter that did that deregulation. Not to mention that Rockefeller and Whitney - need I say more - were the original Pan Am backers and Trippe was as autocratic as any CEO today. That is YOUR golden age? You're nostalgic for an era that never existed except in your imagination.
Those laws need to be enforced by someone.
There is no difference between what you call regulation and what you call oversight - the above sentence illustrates that. And I do not believe in private law enforcement - that IS what we have govt for. So you see, your golden age operated under essentially the same rules we've always had. If we had just allowed AIG to go into bankruptcy would it have been any worse then what Obama and Bush have done?
Look, Cassano isn't much different from Madoff, and the law does reach them, even now. The problem is we DIDN'T let the market clear this mess up. When you bitch about this as the free market, it isn't, because the govt is stepping in trying to make everyone happy.
Glass-Steagel WAS antiquated. You wouldn't have gotten bipartisan support to reform it otherwise. Both parties had talked about it for years. But again, all you want to do is to scream about how fucking evil Phil Gramm is. [And then you wail about how the rightwing demonizes. Admit it, you're only upset because they do it better.]
I lived through the screwed-up energy "deregulation" here in California. That was bipartisan, and everyone at the table insisted they got what they wanted - including supposed rules to prevent energy price gaming. Oops! What they designed was a system ideal for gaming - and then they were shocked when it happened. Sort of like a Congress that passed a law guaranteeing certain bonuses and a President who promised to be hyper-vigilant before signing any laws - and oh, the shock, the horror of what THEY had done.
But they know their audience - you just eat that shit right up.
blk, I do agree that there is a bad tendency in our financial markets to be overly tied to quarterly results. That isn't just a Wall St phenomenon though. Warren Buffet has made a lot of money by not following short-term results, but he is an exception.
Even with overall slower growth, there will be companies shrinking and others growing rapidly - the market is anything but static.
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