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The Oligarchy's Bailout Ball
You know what they say -- half a million dollars just doesn't go as far as it used to. News from the White House that $500,000 was the cap the government wants to put on executive salaries at the banks receiving bailout cash had some on Wall Street and along the plush corridors of Manhattan's swank Upper East Side hollering "Unfair!" (But without those unsightly street demonstrations and picket lines, of course.)
"You Try to Live on 500K in This Town" was the tongue-in-cheek headline in last Sunday's New York Times. Just add up private school tuition, mortgage payments, maintenance fees and wages for the nanny and you're already up to more than $250,000 a year -- and that's pre-taxes, assuming you're paying any. Then tote up payments and upkeep on vacation and weekend homes, charity balls, car and driver -- pretty soon you're maxing out your American Express Black Card.
But they work hard for their multimillion dollar salaries and bonuses, perks and solid gold benefits, complained some of the financiers. Besides, executive headhunters say, the money giants just can't get good help for anything less. Good help? Spare us the kind of moguls who helped us straight into the current deep, dirty hole we're trying to climb out of.
"Like spoiled, petulant children," is how Washington Post columnist Steven Pearlstein described them. "These guys won't be happy until the government agrees to relieve them of every last one of their lousy loans and investments at inflated prices, recapitalize every major bank and brokerage and insurance company on sweetheart terms and restore them to the glory days, so they can once again earn inflated profits and obscene pay packages by screwing over their customers and their shareholders."
Pearlstein was reacting after the five percent dive that stock prices took following freshly minted Treasury Secretary Timothy Geithner's announcement of the Obama Administration's Financial Stability Plan. It's the latest iteration of the bank bailout plan intended to go hand-in-hand with the economic stimulus package. Combined, as much as three trillion dollars may be at stake.
The plan immediately was attacked by many as too vague and ineffective. Part of the trouble, critics say, is that Geithner isn't part of the solution, he's part of the problem -- former head of the Federal Reserve in New York and a protégé of Clinton Treasury Secretary Robert Rubin, who last month retired as senior counselor at Citigroup. That's the bank the government agreed to insure against projected losses of $306 billion, on top of bailouts totaling $45 billion. In other words, Geithner's a player.
The New York Times reported that in preparing the Financial Stability Plan, Geithner opposed tougher conditions on investment firms sought by others in the White House. Geithner, the Times wrote, "successfully fought against more severe limits on executive pay for companies receiving government aid... resisted those who wanted to dictate how banks would spend their rescue money. And he prevailed over top administration aides who wanted to replace bank executives..."
This week, on The Baseline Scenario, a blog he co-founded, MIT professor of global economics and management and former International Monetary Fund chief economist Simon Johnson wrote, "There comes a time in every economic crisis, or more specifically, in every struggle to recover from a crisis, when someone steps up to the podium to promise the policies that -- they say -- will deliver you back to growth. The person has political support, a strong track record, and every incentive to enter the history books. But one nagging question remains. Can this person, your new economic strategist, really break with the vested elites that got you into this much trouble?"
That question caught the attention of my colleague Bill Moyers, who interviewed Johnson on the current edition of Bill Moyers Journal on public television.
The problem, Johnson told him, is that via millions spent for political contributions and lobbying efforts, the revolving door that sees elites shuttle between jobs in government and business, and by creating a situation in which technical knowledge is limited to a privileged few, the banking and financial services industry has become a kind of ruling oligarchy that stifles attempts to shake up the status quo and make the real change necessary to get us out of the current crisis. "Either you break the power," Johnson said, "or we're stuck for a long time with this arrangement...
"The policy that we seem to be pursuing, of being nice to the banks, is a mistake. Both from a technical/economic point of view, and from a deeper political point of view... [The banks] think that we're going to pay out ten or 20 percent of GDP to basically make them whole. It's astonishing."
Johnson has written on The Baseline Scenario blog what he thinks needs to be done: "Reboot the financial system. Find out immediately which banks are insolvent using market prices. Allow private owners to fully recapitalize, if they can. Have the FDIC, the Federal Deposit Insurance Corporation, take over all banks that cannot raise enough private capital, and try to re-privatize those banks quickly, while making sure the taxpayer has strong participation in the upside."
Unfortunately, Johnson fears the oligarchy will prevail. "My intuition is that this is going to get a lot worse," he told Moyers. "It's going to cost us a lot more money. And we are going down a long, dark, blind alley...
"Eventually, of course, the economy will turn around. Things will get better. The banks will be worth a lot of money and they will cash out... We and our children will be paying higher taxes so those people could have those bonuses. That's not fair. It's not acceptable. It's not even good economics."
Johnson doubts the political will exists to do what needs to be done. According to Tuesday's Boston Herald, last August, another former Treasury Secretary and Rubin pal, Lawrence Summers, now chairman of the of the National Economic Council, hitched a ride back from the Democratic National Convention on board a Citigroup corporate jet -- "the same type that... Citigroup infamously wanted to replace last month with a new $50 million French jet."
Summers didn't pay for the trip, but Citi said it has paid the appropriate taxes. The Herald reported that the plane "was the same one former City chief executive Sandy Will took on vacation to Mexico last month, it reportedly includes a full bar, crystal stemware and 'pillows made from Hermès scarves.'"
When you've got it, flaunt it, Larry. Why go to hell in a handbasket when you can fly there executive class, leaning back on a French silk pillow? It's good to be part of an oligarchy.
- Posted in
37 Comments so far
Show Allthree trillion dollars. and not one red cent for the lower and middle class. this goes beyond belief. oh wait, we each get a $400.00 tax "credit." silly me.
how much of that 3t goes to education? heaven forbid we should allow any money for the current, the next, or any future generation that would help in developing think-for-themselves skills. keep 'em dumb so we can continue to take.
You are right; Lion's share for the few and crumbs with lots of fanfair for us.
Turn the tables on them. Don't spend that $400. Save like you never saved before. Do this for 5 years and we just might transform our moral compass from bling, bling to prudence. I make less than $35,000 a year and save $800 a month. Screw the oligarches. Don't spend! Barter with friends if possible. We outnumber them. They use that against us. Let's use that against them.
"Besides, executive headhunters say, the money giants just can't get good help for anything less."
What is the definition of good help, one who receives PAY-TO-PLAY, pass GO and collect$$ along with a GET-OUT-OF JAIL card?
With all the Ivy League Master's degrees in Business/Finance now unemployed, I would think that this industry, like most others, could find qualified people to fill those positions for $$Tens of millions in stock and bonuses instead of $$Hundreds of millions.
Why is it that the "money giants" are the only ones not making any sacrifice in this crisis economy they created?
There are billions in tax cuts for the "middle class" in this bill beginning with an increase in the earned income credit which alone amounts to 9% of the bill but goes on from there in a variety of directions including cuts in small business liabilities, education and housing expenses. In fact, it is almost impossible for ordinary citizens to track the spending on tax cuts- to get a clear idea of the rules that will be governing their dispersal or whether they are targeted with maximum efficiency to get a stimulus effect. There are perhaps ONE or TWO Congresspersons or Senators who will have READ the entire Bill before they vote on the final version- which itself is in a constant state of change and amendment. Of course the main stream press is making no attempt to inform the public on the specifics but goes on and on in an "infinately abstract" manner which arouses my suspicion that there must be some major subsidies for the Press itself, as in Sarkozy's stimulus proposal in France. More likely that its the usual "not really reporting relevant news" habit that the Press has fallen into ever since they fell victim to the "financial management" model of corporate governance just like the banks and other businesses.
Of course, this is the problem and why we are in a recession in the first place: lousy "liberal" government policies- focusing entirely on the economic needs of individuals and States rather than long term national interests with an emphasis on social development, justice and equity.
The simple fact that tax cuts are not particulary "stimulating" in recessionary times and just pushes the resolution of our real problems like overly expensive and poor health care, excessive and corrupt military expenditures and widespread environmental contaminations ( not just global warming) further into the future- is apparently a matter of complete indifference to our representatives and their so-called watch-dogs.
In regard to the bank bailout: things are proceeding along in exactly the same manner. As the Canadian Finance Minister remarked on the BBC this morning, based on the Canadian experience itself ( almost all banks in Canada remain profitable): there WILL BE NO recovery until new regulations are in place so that the pain that will be imposed on people in the delay caused by getting it right will not outweight the grief of doing it wrong.
So when you look at the situation, the "big focus" on executive compensation really is a minor issue, mostly symobolic and very distractive of what we should really be demanding from our government.
Put an ad in the Wall Street Journal seeking applicants from India,Poland, Pakistan or wherever the Huddled Masses still remain. "wanted, qualified executives willing to work for $500.000 per year."
I agree that too much focus is placed on the bonus aspect of this mess.It's a hot button issue generated by the " Mediocraty " Hey, I think I'm on to something here!
Outsource those exec jobs!! Great idea. Even better, eliminate them. Anyone who has worked in the private sector knows there are too many useless parasitic layers on top of those who do the actual work. You need just a few smart hands-on administrators and leaders to coordinate and steer.
Joe
The government operates in the same manner.
I wonder if ya'll are considering how far down the layers of bonus compensation goes? And that when you allow excess it leads to more excess. I believe the focus on compensation is not too much in light of that.
The focus on compensation, although stupid, is legitimate because we're giving them money. But what's really stupid is that we're giving them money.
When Obama said it was "shameful" that they paid themselves bonuses he was wrong. What's shameful is that they still have jobs.
And I'm sick of the "you can't find good help" argument. In the professions, especially, but in all walks of life, there are people who choose to work for less money because of a variety of reasons from being able to walk to work to having an opportunity to do something they're good at and enjoy doing.
But what's really stupid is that we're giving them money.
HIT THE NAIL ON THE HEAD THERE!
You do hint at the fact that such criticism of the earnings in question are but a bump when compared to the money involved...This point is important when viewed as a distraction to the public, throwing meat to the hungry lions, when we the people should be far more focused on what this crisis proves so eloquently; that the system is rancid, crooked and beyond saving.
"Most people would sooner die than think, in fact they do so." Bertrand Russell
I don't think executive compensation would be such an issue -- but yes, it would and should be an issue because taxpayers are bailing them out -- if the rest of America was being fairly compensated for its work. As a country, we have been way out of balance for way too long. Incredibly, pensions are routinely not protected or even properly funded. Corporate America is failing at fundamental issues of honor, fairness and human dignity, basic human rights. Nationwide, radio talkers and cable TV personalities rationalize this human neglect and this obscene greed. That is the context for all of this fuss about executive compensation.
Do you think that this will slow down the coming revolution?
Soon, only those who have the mark of the beast on their forheads(Think a certain way) will be able to buy and sell--batten down the hatches and make ready for some hard times sheeples.It's OVER
The revolution will come when we have nothing left to lose. The rage is building in Amerikka as politicians who promised change instead give us more of the same. The corporations have stolen the political process and their lackeys in the White House and Congress have sold us out.
The oligarchy has looted the treasury right under our noses and then showed us their middle finger as a thank you.
The bankers and wall street are just money junkies. There is never enough and Congress and the administrations have been their enablers.
For these people, the US exists on Wall Street and Capital Hill. Main Street and all the americans who just work for a living are not really considered. Wall Street has drained capital from middle america through various schemes (401ks, IRAs)aided by their congressional cohorts. Therefore, there has been less capital to build locally owned businesses. Instead we've gotten Wall Street supported and backed mega-stores - chains - McDonalds, Burger Kings, etc. The days when there were local business initiatives seem to be gone. In this new world the individual doesn't really count except as a consumer.
Loans should have been sourced locally, orginated locally and managed locally by local people. Congress could have capitalized local community banks to do this and take over the bad loans but they have gone with their the big banks and their friends on Wall Street with whom they have had such cozy financial entanglements.
Wish we'd hear more talk about revitalizing local economies. Obama is a total disappointment, and I did not start out with much hope, but the community organizer should know that economic strength comes from the bottom up. The Geithner appointment was a real deal breaker. He started his career with Kissinger & Associates!
I do hope Obama and his White House aides are reading this and that they caught the Bill Moyers program -- actually, all of them. Superb!
Dreaming...
"President Obama announced this morning that he will appoint long-time journalist and former presidential press secretary Bill Moyers to the new post of Special Adviser to the President. Moyers held a number of advisory posts under Presidents Kennedy and Johnson, and served as press secretary for President Johnson from 1965-1967, before leaving the White House due to a reported rift with the President."
On the positive side there are alot of fables about thieves drowning( in this case it may only be spiritual) while trying to make off with the gold. Recently we do have the Somali Pirates literally drowning with the ransom gold.Come to think of it I rather have the Somali Pirates as Bankster CEO; I would bet they would be less greedy and more democratic ( actually traditional western pirates are known for being very democratic).
"When you've got it, flaunt it, Larry. Why go to hell in a handbasket when you can fly there executive class, leaning back on a French silk pillow? It's good to be part of an oligarchy."
Anyone remember the Mel Brooks movie, History of the World, Part 2? Funny movie - pure satire. Or was it? There was a scene where Harvey Gorman played the king, and Mel Brooks played the "piss boy" who's job was to run with a bucket to the king whenever he had to take a piss. In that scene, the king pissed in the bucket while his piss boy held it (not taking care to aim properly), then threw a coin in the bucket as a tip for the piss boy. Having satisfied his urge (and his ego), the king quipped, "It's good to be king."
Indeed. And who is playing the piss boy now?
Time to realize what our roles have been and make up our minds what we want to be, or not be, from now on.
Oh, piss boy...
Yes! One of my favorite movies!
"Of course! That's it, sir! You like the piss boy!"
"And you look like a bucket of s**t!"
And, of course, we mustn't forget Harvey Korman's character's name in that sketch was Count Demoney ("DemoNAY! DemoNAY!").
Not to be a sourpuss, but the actual movie was Part I; they never did make a Part II . . . sadly.
Hmm, really? I've seen this movie, I remember the scene too - for some reason I thought that was Part-II. Don't know why.
Nope. I have it on my shelf. I just double-checked. It is Part I. They did a fake TRAILER for Part II at the end of Part I . . . remember the scenes for "Jews in Space" and "Hitler on Ice"? But no actual movie was ever made. Again . . . sadly.
You are wrong! They are making it as we write. It's called The Oligarchy's Bailout Ball.
Change we can believe in? Yea , small change for the piss boy!
The Oligarchy's Bailout Ball
The Oligarchy controls the military and the police, therefore in order to make changes this must be changed first.
To characterize this "bailout" as a mistaken tactic is itself a mistake. These people know exactly what they are doing and what outcome they want. When the dust settles over the $10 TRILLION that this whole "bailout" will have cost us, there won't have been much money that actually reached We the People. Most of it will have ended up in numbered offshore accounts.
This is a looting, folks. Big time. The elite have thrown in the towel on the US and are slinking off to their compounds to await the results of the triage. At least that's their plan. I'm counting on the law of unintended consequences to nail their asses. I wouldn't place a bet on it, but the probability that they will be hoist on their own petards is fairly high.
I read this article before the Nov. 4 elections: Expose The Criminals Before They Kill You.
At that time, these names didn't mean much to me - but slowly, among all the hype surrounding the "transition", as I saw the names being announced one by one, I thought, oh my God! And here's another article that came out soon after the so-called 'Economic Team' candidates were announced"
Obama’s Treasury Candidates: Old Guard Of The Corporate Elite
May be it's all the product of some over-active conspiracy theorists' imagination. Only time will tell. May be Obama knows what he's doing. May be he needs insiders to fix the system.
One thing I have not heard much about -- maybe because there is no reason to make a big deal about it -- is that, if I am not mistaken, both Obama's father and his maternal grandmother at one time worked for OIL COMPANIES!
(Do I have that right? I recall his grandmother became a VP at a bank after many years of working there, so I wonder when she might have worked for an oil company? Was it his maternal grandfather, then?)
Therefore, the "plot:" send him to Chicago as a grassroots community organizer; make him keynote convention speaker so he can be elected a US Senator; and then ... on to the White House? Nah. Way too improbable. Right?
I strongly urge you all, to read Ravi Batra's books entitled, The New Golden Age; The Myth of Free Trade; and Greenspan's Fruad. Ravi Batra, is a professor of economics at Southern Methodist University, Dallas. In his book, The New Golden age he predicted the mess that we presently are in, but more importantly he has a clear vision on how to get us out of our present economic predicament.
Educate yourself and start spreading the word to others, because the free marketeers that are presently in charge of our economic policies, are only going to get us deeper into our present crisis.
Thanks, 'justice', for the reference. This is one reason I stop by CD regularly - there's always something new to learn. I just read the Amazon readers' reviews for "The New Golden Age" - looks interesting.
WOW!!! What a fantastic ENDGAME!!! They had our cake and ate it too!! COOL!
Well Like the end of any real lively round of monopoly, theres nothing left to do but count the takings while the losers make the tea!!!
Who are the winners?? 1.Geithner 2. Paulson 3. Corrigan 4. Summers 5. Volker 6. Rubin 7.Thain 8. Fink 9. Zoellick 10.Schlosstein 11. Seidman 12. Pickel and lucky 13!!!! Rothschilds!!!!
We all know who Pam is fucking, what Keanu is driving, where Brad is living and where Bowie gets his shirts made! and these are just little artists! Performers! MIMES!
These REAL winners need to be in "People" magazine and US! and vanity fair..I wanna know who they are screwing (besides all of our kids and grandmothers) or we could have a game show! "Follow The Money" where our celebrity accountants help them buy racehorses and yachts in the Caymans. a kind of "lifestyles of the super rich and completely anonymous" or maybe a reality show "SURVIVOR-- Detroit".
The best part is when we display the winners heads on pikes down by the soup kitchen..
What a high honor! like the classical Mayans... I want to offer Corrigans heart to the sun.
I don't see what the problem is. Capitalism had its shot...and it has failed catastrophically.
It's time to nationalize the big corporations. This will solve all our problems.
8 Years without a Leader
Besides the priceless social damages, those wars, speculation bonanzas, and bailouts will cost USans a total of two years of work over and above our normal rate of enslavement. You think it's ok for the elites to steal all of your paychecks continuously for two years? Would you feel better if they spread your payments out over ten years? God Bless the United States of America!
Don't look know but
Obama Will Fight with Us to Quash the Campaign to Loot Social Security -- Right?
By William Greider, The Nation. Posted February 14, 2009.
http://www.alternet.org/workplace/126898/obama_will_fight_with_us_to_quash_the_campaign_to_loot_social_security_--_right/
Right? Probably not. When Grieder calls for the people to speak up in unison against raiding Social Security, he cautions that it not be an attack on Obama, but an effort to save the presidency of Obama from "the forces" aligned with Wall Street interests. This kind of talk makes me cringe every time (although I think William Greider has done good work). How can Obama be seen separately from those "Wall Street interests"?
Obama was installed by those very "forces". There should be even stronger truths being written on the wall.
A clincher for me was a Feb. 9 article at Bloomberg, giving a peek into the philosophy of Tom Daschle's view of healthcare. He is an architect of healthcare provisions slipped into the "Stimulous" Package. Healthcare will be determined by an evaluation of cost divided by age (how many years of remaining "usefulness"), and that effectiveness will favor the young. There will be a big new bureaucracy to define "usefulness"--another continuation of pitting the younger ones against the older ones. Big Brother, New World Order, Global Fascism--whatever you wish to call it. If you are 55 or older, good luck, because your "usefulness" is seriously compromised. But it does make sense if you want to maintain a healthy stock of cannon fodder for fighting the wars for Global hegemony. Tom Daschle is out but the ideas of Daschle and his fellow globalists are still in. I find most appropriate Webster Tarpley's description of Daschle as a "Malthusian eugenicist".
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_mccaughey&sid=aLzfDxfbwhzs