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Goldman and JP Morgan tell Obama to kick those second rate losers so everyone will just shut up already.
From the Nytimes:
The ones that most benefited from the bailout and continue to make massive profits borrowing money from the fed at 0% and then giving it back to us at 3% to 4%. They needed our cash too and now with their amazing risk skills they are taking candy from a baby and rubbing our faces in it. And who knows what the secret hedge fund bastards have been doing with their insane wealth to play the win-win no 'moral hazard' game that TARP and the Fed's printing press at the discount window has created (its a secret-shhh, just like derivatives need to be).
Thanks to Giethner and Summers and the revolving door for wall street elites, those companies are protected. And so far it doesn't look like their will be any new Pecora commission with real investigations, much less trials, or jail time. Nope its looking like we are going to get the head's of a few second rate schmucks and some watered down show regulations while taxpayers keep getting hosed (but thanks to lack of media coverage they seem to like it). Hell even our TPM resident republican and former hedge fund trader mcbill is pissed.
Any company that took TARP funds should forfeit dividends and bonuses. Period. I don't really care that those contracts are already written and the cool kids already won, that money was not theirs. I don't care how hard they worked it over they already broke the whole fucking system. But instead of Justice Obama and company are going to kick those second rate losers that were dumb enough to go into the car business or not pretty enough to get hired at Goldman or JP.
For those keeping track we have so far given away 573 billion in the TARP bailout. Thats right BILLION in 2009 dollars. (check out http://bailout.propublica.org/ Propublica is doing great work tracking this). And don't forget that there is the Fed's magic balance sheet which has quietly given the banks trillions, with no easy way to unwind. But the MSM is bored and doesn't really understand how all that stuff works anyway so they are worried about 1 trillion a decade from now from Health care reform. Great work guys! and I know it is way to much to ask you to investigate the impact of suspending 'mark to market' on balance sheets. But then you might learn something very scary. We can't have that, I mean, its almost Halloween.
All this money came from our taxes, now and future. Instead of Jobs, or Health Care, or even basic infrastructure, we have madly subsidized the richest among us. While right now we are destroying both the credit worthiness and employability of tens of millions. Maybe journalists will start paying attention when their jobs are all gone.
You're welcome Wall Street. You deserve it. For Like W before you are continuing the fine tradition of proving that in America Chutzpah is worth more then, well, everything else.
The Obama administration will order the companies that received the most aid to deeply slash the compensation to their highest paid executives... The companies are Citigroup, Bank of America, theAmerican International Group, General Motors, Chrysler and the financing arms of the two automakers.
Hey look Obama finally decided to throw the raving populists a bone. Okay, so Citigroup and BofA are insolvent publicly owned banks, and GM and Chrysler are essentially government jobs programs for our former industrial heartland, but at least AIG is nominally gratefying:
At the financial products division of A.I.G., the locus of problems that plagued the large insurer and forced its rescue with more than $180 billion in taxpayer assistance, no top executive will receive more than $200,000 in total compensation, a stunning decline from previous years in which the unit produced many wealthy executives and traders.But what about the two companies that 'innovated' the very products that brought the world's economy to its knees? You know the ones that knowingly gamed AIG?
The ones that most benefited from the bailout and continue to make massive profits borrowing money from the fed at 0% and then giving it back to us at 3% to 4%. They needed our cash too and now with their amazing risk skills they are taking candy from a baby and rubbing our faces in it. And who knows what the secret hedge fund bastards have been doing with their insane wealth to play the win-win no 'moral hazard' game that TARP and the Fed's printing press at the discount window has created (its a secret-shhh, just like derivatives need to be).
Thanks to Giethner and Summers and the revolving door for wall street elites, those companies are protected. And so far it doesn't look like their will be any new Pecora commission with real investigations, much less trials, or jail time. Nope its looking like we are going to get the head's of a few second rate schmucks and some watered down show regulations while taxpayers keep getting hosed (but thanks to lack of media coverage they seem to like it). Hell even our TPM resident republican and former hedge fund trader mcbill is pissed.
Any company that took TARP funds should forfeit dividends and bonuses. Period. I don't really care that those contracts are already written and the cool kids already won, that money was not theirs. I don't care how hard they worked it over they already broke the whole fucking system. But instead of Justice Obama and company are going to kick those second rate losers that were dumb enough to go into the car business or not pretty enough to get hired at Goldman or JP.
For those keeping track we have so far given away 573 billion in the TARP bailout. Thats right BILLION in 2009 dollars. (check out http://bailout.propublica.org/ Propublica is doing great work tracking this). And don't forget that there is the Fed's magic balance sheet which has quietly given the banks trillions, with no easy way to unwind. But the MSM is bored and doesn't really understand how all that stuff works anyway so they are worried about 1 trillion a decade from now from Health care reform. Great work guys! and I know it is way to much to ask you to investigate the impact of suspending 'mark to market' on balance sheets. But then you might learn something very scary. We can't have that, I mean, its almost Halloween.
All this money came from our taxes, now and future. Instead of Jobs, or Health Care, or even basic infrastructure, we have madly subsidized the richest among us. While right now we are destroying both the credit worthiness and employability of tens of millions. Maybe journalists will start paying attention when their jobs are all gone.
You're welcome Wall Street. You deserve it. For Like W before you are continuing the fine tradition of proving that in America Chutzpah is worth more then, well, everything else.
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But... but... All the "talent" would bug out if we don't pay off the Goldman and Morgan execs! Thanks for writing this Sal. I hope someone besides the handful of reader/writers here are paying attention.
October 21, 2009 8:48 PM | Reply | Permalink
Yeah. "Talent". I am sure they will figure out some way around this. Like Ken Lewis who just magnamously took no salary or bonus this year- but a golden parachute of 125 million. WTF?
The only way to do this is raise the Tax rates, ideally at Nordic rates, but at least pre-Reagan levels. Capital gains too.
Thanks though. As you can tell I am still raging.
October 21, 2009 11:41 PM | Reply | Permalink
What amazes me is that these practices will bring the whole economy down - and keep it down - and yet they continue to be permitted. For me, it's not just the annual income flow, it's also now the WEALTH this small segment has piled up. The combined impact of that distorts everything. All the general economic stats become worthless - you need to know how the top 1% or 10% are doing, and then the rest. Same with your economic policies. Same with the entire political process. And which new technological innovations and opportunities get supported. And what kids study when they go to college. ALL of this gets distorted because the super-wealthy rake in such a massive share of things.
And what is doubly crazy-making is that Obama's top policy advisors know this. So even if I remove all the sense of outrage, and the entire issue of fairness, all talk of pitchforks and the winners and losers of the bail-out, I'm still left with a simple thing - you cannot make a modern economy work effectively for hundreds of millions of people when such enormous shares are being dragged off by a tiny percentage of people.
Die yuppie scum. Said it then, mean it still.
October 22, 2009 12:40 AM | Reply | Permalink
I'm partial to "Jump You Fuckers".
And what is doubly crazy-making is that Obama's top policy advisors know this.
I am inclined to agree. For example reading Ryan Lizza's somewhat effusive New Yorker piece on the crisis. Its very clear that they are talking about the ramifications of their actions. I am certain that Summers, Bernstein, Romer all very likely understand the imbalances created. But I guess you go to war with the economic system you've got, rather then think about how to shift it.
It jsut sucks, we had a chance to remake it but the O team was too scared, easier to put things back together and nudge the edges. God forbid Fox be right that he is a radical. Too bad that's exactly what we need.
So maybe I should become a high end yacht builder, or maybe a butler. Fuck that O-Chem test ain't nobody hiring but the rich anyway.
October 22, 2009 1:35 AM | Reply | Permalink
Jump, as sung by Our Duds.
Yes, your first day at war, you go with the economic system you've got. But in any war, you tend to mobilize and transform every single resource you can lay your hands on, as quickly as possible, to avoid disaster and achieve your ends. In this case, if we're not transforming the economy, deliberately, day by day, through the war, then what the hell are we doing? We should be ripping it up, health care... military... energy... housing... the whole damn show. Instead it's "Bring back finance, and they'll reboot everything else, the way it was before."
I'm glad we've avoided the worst - really - but I have absolutely no faith that the recovery is gonna get any real traction. None. I'm seeing nothing that looks like real growth or recovery. And if it doesn't start to show soon, there'll be lots of voices joining in the Dudley choir.
October 22, 2009 2:38 AM | Reply | Permalink
Insanity - Repeating the same behvior and expecting a different result. This must change.
October 22, 2009 1:00 PM | Reply | Permalink
Really, if you think about it, just what is the justification for not putting the top margianl rate back at 70%?
October 22, 2009 10:18 AM | Reply | Permalink
Hell, I'll volunteer to join the 70% bracket!
October 22, 2009 3:42 PM | Reply | Permalink
Pfeh, that was my thought when I heard that there was "some concern" that because these ailing financial firms couldn't offer enormous bonuses, they might not retain their "top talent"...
Uh huh.
That would be the same "top talent" that got them into the mess they're in (and we're paying for, wouldn't it? Meanwhile there are tens of millions of people out there who are looking for work, and I'll bet there a few of them who have the smarts to do better than failed "top talent"; maybe even accept a salary of less than $1M per year.
October 22, 2009 3:48 PM | Reply | Permalink
The "retaining talent" line is one of their bigger whoppers. Where would this talent go, exactly? For example, American Bank CEO's are living in their own World...
http://www.reuters.com/article/ousivMolt/idUSTRE58M2QU20090923
October 22, 2009 3:54 PM | Reply | Permalink
Sickeningly typical of DC Democrats. Make a move to fake everyone out so they think the greedy bastards are being brought to heel but only after making sure the real powers that be are fully protected. It stinks. Plain and simple. Summers and Geithner should both resign.
October 22, 2009 1:28 AM | Reply | Permalink
heads i win, tails you lose.
fuck em all. these ceos are not in prison and neither are the cabals surrounding these ceos.
If they are not in prison, then this is not a nation of laws at all.
Just a nation of power mongers.
Oh there is a token madoff thrown in the clank for show, someone who really pissed off the dukes and earls....but it really is a meaningless symbolic action.
October 22, 2009 4:14 AM | Reply | Permalink
losers that were dumb enough to go into the car business or not pretty enough to get hired at Goldman or JP
Basically, I agree with; government bailouts were designed to protect the wealthy. But I have some very serious reservations.
First, the above quote expresses the resentment of a high school outcast and that really bothers me. I've suspected for a long time that Marx was seriously wrong. That some very basic psychology was what drove society, not money - important as that is.
Second. You cannot blame winners for being winners. They're just better at the competition than anyone else. Goldman hasn't succeeded because of "our" money or because it was crooked or gamed the system. It was smarter than the others.
Third. People are constantly saying that better regulation could have prevented all this. In theory, yes. But in practice regulators are loath to be party poopers and are, too often, incompetents or share the same interests as those they're supposed to regulate. So far, we haven't found a system that works over a period of many business cycles.
Fourth. If not for the bailout the entire system would have failed - although Goldman probably would have survived (Jesse Livermore and Bernard Baruch became hugely wealthy by shorting stocks during the crashes of '07 and '29). Many of the rich would have lost big time but the middle class and poor would have been totally destroyed. Maybe a revolution would have made things better for them...but I doubt it. Not without a long, long period of terrible suffering.
Fifth. The basic dynamics of the system are beyond anyone's control. Global trade and technological advance are unstoppable and have destroyed many of America's advantages. I can't see how the standard of living of America's middle and lower class can be preserved...or how its rich can be prevented from becoming mega rich.
October 22, 2009 6:26 AM | Reply | Permalink
That is ridiculous, the favoritism, cronyism, and preferential treatment, not to mention the lack of competition, make a lie out of that statement.
These aren't "winners." They are welfare queens.
October 22, 2009 7:06 AM | Reply | Permalink
Hey Chicken - have you seen the stuff coming out of Sorkin's new book on the crisis?
If not, start here -
http://yglesias.thinkprogress.org/archives/2009/10/paulsons-funny-business.php
So (i) a secret meeting in Moscow between Paulson and GS executives, (ii) banks forced to hand over proprietary info on market exposure to GS.
Basically Treasury outsourcing regulatory work to GS!
The more we learn, the more unbelievable it gets...
October 22, 2009 7:44 AM | Reply | Permalink
I'll check it out, thanks, pug.
Have you noticed that the only gubmint programs that ACTUALLY helped the greater economy were the ones that were aimed at the actually productive majority? The Cash for Clunkers and First time homeowners credit actually helped the economy. None of the welfare payments to the selfish have-too-much pigs did anything.
See, give relief to people that have actual talent and are really productive, and good things happen.
Time to cut off the whiners. They are amusing, but like aging over-priced hookers, not a lot of bang for the buck.
October 22, 2009 7:29 PM | Reply | Permalink
Isn't that kind of demeaning to real welfare queens?
:-)
October 22, 2009 9:50 AM | Reply | Permalink
You guys - stillidealistic, obey, bwakfat - are seriously "in denial" as they say. Worse you all DO sound like angry, high-school losers. Pissed off because you were considered dumb, ugly, weak.
Go to Wikipedia and look at the bios of some of America's top execs. For example, Lloyd Blankfein, head of Goldman, was the son of a postal worker. Talk to people who work on the street. The competition is fierce. That's partly why so many took such big risks and partly why the rewards are so huge. Go out and try to raise money for a project, any project, if you think its so easy. I've done it. It isn't. Then try and make the project succeed so you can do it again.
October 22, 2009 11:35 AM | Reply | Permalink
I'm smart, good-looking and strong. (And I can say without too much fear of contradiction, smarter than you.) So stuff your 1st year Psych schtick back up your crapper. Though you DO sound like a lot like someone who got beat on in 8th grade, gave in, and decided to work for the bullies.
"You cannot blame winners for being winners. They're just better at the competition than anyone else." Here's the thing lil fella. There are a lot of games set up in society. Not just your big money game, though I know it feels to you like the ONLY game. (Play a lot of Madden NFL?) Anyway, from time to time, games going on in one sphere get out of control, and begin to mobilize/cannibalize other spheres to work for them. The Church has done this, the Military, etc. In this case, Big Money did. They ate much of the political sphere. But thing is, there is absolutely no guarantee that the ones who did the best at this task are in any way the "smartest" or the "most competitive" at anything other than manipulating the boundaries of the game. And if the other spheres determine that Big Money is not achieving its agreed-upon ends, then whoopsy, someone may hit Reset.
"The basic dynamics of the system are beyond anyone's control. Global trade and technological advance are unstoppable .... I can't see how the standard of living of America's middle and lower class can be preserved...or how its rich can be prevented from becoming mega rich." Why gee, Mister, thanks for that fab insight. Really... from all us little people.
Look, bubs. We shape the extent, nature, speed of global trade with our decisions every damn day. Trade agreements and such, heard of them? Same with techno advance. We pour billions in here, we choke off there, and the world moves. Sad that you can't see how the middle class survives. Funny thing is, I know lots of the rich and mega-rich. And I can see - really quite easily - how things survive without them.
Your overall idea that the progress and well-being of the American middle-class somehow grows out of the butt of Goldman Sachs doesn't actually have too much basis when you look at post-war prosperity.
But hey. Keep licking those big golden asses, kid. They're sure to let you into their club sooner or later.
October 22, 2009 12:44 PM | Reply | Permalink
Got to you, didn't I?
So let's take your arguments one by one.
Could you high jump 6'8"? Could you curl 250lbs? Could you surf 15' waves? Were you a chess champion? Were you admitted to one of the best technical colleges in the world? If not, you're not in my league.
Of course, there are a lot of "games". But the money game is special, maybe even central, and always has been. Playing it well has always required a great deal of brains, and that is increasingly so in the modern world. Take a look at the resumes of executives at any venture capital firm, Sequoia for example, or look at the Scoles-Black equation which governs the pricing of options (it's just the heat equation in financial guise). Nobody made any claims that traders were smarter than physicists or musicians or that bankers weren't more powerful than they "should" be.
Who is we, white man? America doesn't have the power it once had and - even if it did - doesn't speak with one voice and never did. Competition is central to human existence. Invent a better widget and it'll displace all the lesser ones...and someone will make a huge profit. Ditto cheaper ways of making widgets. And everyone wants to be richer than he is now. All the agreements in the world can't stop that dynamic.
October 22, 2009 1:15 PM | Reply | Permalink
Nope, I can't compete in the high jump, surfing or tech college worlds. But I got paid to do Oxbridge, and paid to do the one before that, and I suspect I can outskate you and outhit you on the ice, and send you down swinging and take you downtown on the diamond.
Plus, my taste in music is better, my life's been more interesting, my friends are more fun than your friends and I've got a 9" dick. ;-)
In short, you're confirming my point. People compete in different spheres. And they value those spheres differently. As for your money game being "special, maybe even central" - the different games move into then out of the limelight. Money's always been important, yup. But how about the Military? How about Politics? How about Religion? The rules of the money game have been changed before. Sometimes the super rich gain, sometimes... the system opens up and allows more regular people to do well.
Yes, the money game requires brains. But so do music, medicine, running an NGO, parenting and science. VC firms are probably not your best evidence BTW. Every year I listen to people bleat on about the VC guys and how fierce and genius they are. And every year I watch these geniuses walk straight into the worst technologies and the biggest cons imaginable. As for traders knowing some math... well, whoopdee. Christ, my buds doing climate change modelling and long-range aerial deposition do more math than those clowns. They ruling the world now too? Cool. They'll like that.
Yes, competition is central. But you're showing off a pretty limited intellect if you think that's IT. And that bit about "invent a better widget and it'll displace all the lesser ones..." is waaaaay comical. Hmmmm, can't think of any better technologies that failed? Really?
Interesting that you're big on that whole "tough guy competitor rule the world" psychology. I'd say, go for a walk. Let the fever pass. Seriously. The world needs more than that. Especially right now. If you've got talent, you're gonna feel pretty lousy, later in life, if you throw it all onto the money pyre.
Congrats on the surfing. Always wanted to do that.
October 22, 2009 1:39 PM | Reply | Permalink
And every year I watch these geniuses walk straight into the worst technologies and the biggest cons imaginable
This may be your best point. It emphasizes the limitations of human power.
October 22, 2009 1:54 PM | Reply | Permalink
No it illustrates the pathetic nature of hubris.
Look it up son, it might do ya some good.
(sharpens pitchfork)
October 22, 2009 7:37 PM | Reply | Permalink
But the money game is special, maybe even central, and always has been
Actually i think it would be more like third, behind the 'food' game, and the 'war' game, and. No actually it would be fourth now that I think about it behind the 'religion' game (think all those jews locked in their ghetto only kept for their 'money' magic at the king's disgression, or if its easier think of usury laws in the Islamic world today). Today we have largely, at least for the moment, solved the first 3 so MONEY is where it is at (its very interesting that the value of our 'money; relies on our continued domance at war- but that is a digression).
One could put forth an argument that these are all just various plays on gaining power and that money is today's power play and maybe there is something to that. Frankly-I'd buy it, but my reading of history and economics is that one sphere becomes empowered at the expense of the other spheres our society as a whole suffers and growth is retarded (think christianity conquers rome and everyone is only to study religion... then the dark ages come, or china's emperor putting the kibosh on private traders squashing innovation and private capital aclimation) History is full of these stories. Studying it is how we learn.
Its really sad that you have such a cruel darwinian view of things. a little history would temper that. Since you are of an economical bent I would recommend David Landes-the wealth and poverty of nations.
I don't share your view that competition is the heart of mankind. I think it is healthy and we need some, but so is cooperation. Man is the only creature that REQUIRES 15 years of nurturing before we can set out on our own. Why would a creature need such a long gestation period? It builds cooperation we are team creatures. Nothing exists without teamwork. And we collectively write the rules. Wall street plays its games according to the legal rules congress writes (and negiciates) they are creatures of the state and we can change that.
I believe that finance should be rewarded for many of the advances they have created since the amsterdamn stockmarket came into being. However It has always been proportional to other noble advancing services (medicine, tech, education, etc.) However today it has stopped being of service to making the world better, instead it is retarding our ability to deal with serious issues and demanding more and more while the rest of us suffer.
573 billion would make a damn good dent in dealing with Global warming- a serious existential threat. ONe that can possibly destroy some of those 'games' that I locate higher up then money (most importantly food and war). Instead we gave it to the banks and now are fighting over scraps.
October 22, 2009 2:24 PM | Reply | Permalink
I'm still bummed about the high jump thing though. Drat.
My life sucks. ;-)
October 22, 2009 5:45 PM | Reply | Permalink
Really? i would think with your equestrian equipment you would be feeling pretty good about things.
October 22, 2009 7:18 PM | Reply | Permalink
Salvation through the metric system, Sal. I was in that generation that had to convert, but mentally, never quite managed. So there's not a man nor a woman my age up here that can visually measure worth a damn.
The metric system. Try it.
October 22, 2009 8:28 PM | Reply | Permalink
ROTFLMAH!
I can't wait to share this with the pug. Feeling better about things already ;-)
October 22, 2009 8:52 PM | Reply | Permalink
I think the Swiss pretty much use Metric, but with a few local alterations - pretty simple on the whole.
For length, "1 Lonely Goatherd" is about the length of your... you know... yer wanger. Pretty obvious derivation of the name.
A distance of 40 Lonely Goatherds - or what we might term "A 10 Foot Pole" - is what they call a "Strudel-Strapped Edelweiss." Again, for Obvious Reasons.
(Warning!!!! Turn back now or you'll be yodelling "Hurt Me, Heidi" by Dawn.)
Any LARGE number of objects is simply termed a "Holy Fucking Leichtenstein" - after their innumerable, invincible, local enemy, to whom they have lost in 17 of the last 17 wars.
There are also special measures of weight, with Gold being measured in Chocolate Neutrals.... And the depths of someone's evil being measured in Davos'.
Might wanna get Obey to doublecheck this stuff, but I'm not far off.
October 22, 2009 9:30 PM | Reply | Permalink
I don't want to acknowledge this, but, uh, the link failed, can you maybe try again. I mean if dawn doesn't charge too much?
October 22, 2009 9:57 PM | Reply | Permalink
Obey sent me this. Pretty obvious why he's drawn to Strudel-Strapped Edelweissland.
October 22, 2009 10:15 PM | Reply | Permalink
That Fraulein is positively pugilistic. Oh, And I won first place in the sixth grade regional long jump. yeah!
October 22, 2009 11:49 PM | Reply | Permalink
Awesome show. I wish it was back.
Mecca lecca hi, mecca hiney ho!!
October 23, 2009 1:05 AM | Reply | Permalink
hmmm, so by horse-bits, the scotsman means this?
phew, feeling better already...
October 23, 2009 9:35 AM | Reply | Permalink
Congratulations, want a cookie? But you can probably reach the jar yourself, being so tall and all. There's plenty of advance degrees and special skills around here, dude, but that's not really the point. It's about the ideas, and so far I'm not impressed.
October 22, 2009 3:51 PM | Reply | Permalink
Why would I be jealous of morally bankrupt people?
I have turned down jobs that paid well but were, in my view, harmful to society, or involved taking favors, or government handouts. I'm kinda above doing something that grasping and pathetic.
That makes me better than you.
You lack something most Bankers do: Class. No amount of money will buy you any either.
Try to get used to it, dude.
=D
October 22, 2009 7:25 PM | Reply | Permalink
They are the actual welfare queens.
October 22, 2009 7:30 PM | Reply | Permalink
Hi Spider thanks for stopping by,
quote expresses the resentment of a high school outcast
its true. I want my grape
Next- really not sure what you mean on the Marx is seriously wrong. But I fully agree that psychology is a primary driving factor behind our haphazard economic decisions(see grape above)
Goldman hasn't succeeded because of "our" money or because it was crooked or gamed the system.
Umm, actually that is exactly what they did- maybe not crooked as they have all the connections (700 million dollar former CEO hank Paulson), and if you do some research you will find that they wrote many of the rules both before (rubin deregulation period) and after crisis (tresury revolving door link). Also (see pug's quote below).
Regardless, I don't really care. They are not smarter then someone who spends 8 years at medical school and becomes a doctor, or a science PHD who actually moves our knowledge frontier forward. Nor in my opinion should society simply allocate our resources towards those who show the most greed. We collectively write the rules- and they not only broke the system they are taking all the resources from other good pursuits. We need to rewrite them to allocate our resources better. And hs outcast I may be, I have little doubt that most of us around the cafe are just as smart as they are. I can be angry that my taxes are being used to reward bad behavior. In fact I can be down right outraged- that is what I should feel. So should you.
You seem to be fine with a subservient role to your betters. Is that true? Why?
Finally I can't see how the standard of living of America's middle and lower class can be preserved...or how its rich can be prevented from becoming mega rich.
UMMM, wow. Glass half empty. If that is the way our system is going then why preserve it? Why are you so compliance. We did quite well as a country with higher marginal tax rates and capital gains taxes-in fact we ruled the world for 50- ought years. The neoclassical model is not the only one out there, in fact it destroys itself (check out "the madness of crowds" and then reread marx, and pick up some Schumpteter, Keynes).
Demand your grape. Or at the very least find hope.
October 22, 2009 12:09 PM | Reply | Permalink
They never showed a reaction against their partner, they never blamed them," Sarah Brosnan said. {from the link]
That is the greatest mystery of our time in this country. Somehow we have these people who lack the understanding of a capuchin monkey and blame their "partners" and not the one giving the rewards. We are NOT evolving.
October 22, 2009 1:08 PM | Reply | Permalink
Ah, Saladin, thanks for your honesty. In reply, let me take the arguments one at a time.
I just meant that Marx may have underestimated the roles of jealosy, envy, etc. I don't want to belabor or focus on this.
One has to ask how Goldman succeeded in getting so many of its former execs into high positions, how it managed to change the rules in its favor (actually its former execs changed rules to favor the American financial sector, not it), how it got so rich and stayed that way, in such highly competitive endeavors. The reason is that they were exceedingly good at what they did and that means at adapting very quickly to changing conditions - technological advance, political pressures, foreign competition - over which they had very little control.
I don't know how much contact you've had with doctors but the wizards of finance are a hell of a lot smarter than most of them. They may or may not be smarter than mathematicians but they are smart enough to employ some of the best to help them get an edge...and to reward them extremely well....and they are - without any doubt whatsoever - infinitely smarter than virtually all the posters to this site.
There's no doubt that the rules of the system could use improvement. But what improvement? And how do you enforce the rules? So far we, collectively as a society, have no good answers.
Of course, political activists always scream that they know best. I discount them all.
I'm not fine with a subservient role. I hate it. But I also accept reality. I've known many very, very talented individuals (who've been highly rewarded). I'm not one of those. Who shall I blame for that? I've used what talent and intelligence I do possess to live a very, very interesting life. Shall I deny my good fortune because I wasn't given more?
America's lower class jobs have largely been outsourced to cheap labor countries and won't return. Middle class jobs will soon follow. We've used up most of our oil. Our competitors have recovered from the destruction inflicted on them by WWII. Environmental limitations are real and overpopulation monstrous. Do you think prosperity is magical? So we are left to fight about how to divide an ever-shrinking pie. America now has an all volunteer army - very conservative - and technology has insured that power resides in ever fewer numbers (if they don't have to worry about being humane). So exactly how are you going to change the rules to favor your group?
October 22, 2009 1:44 PM | Reply | Permalink
1- never disputed that these guys are smart, or highly motivated.
I am just not going to go around and claim they are my betters for it. They aren't. Yes our system rewarded them- way too much in my opinion. Man has always had a thing for hero's and we often endow them with great rewards, in business its called the halo effect Its usually men who do this, something about having an achilles on your side marching into war I think but who knows.
I also accept that many of them came to their positions during our country's best years of rewarding meritocracy. However I greatly resent there offspring (hank paulson's son owns sports teams in my town bought with daddy's money- he didn't work hard for this he is privledged elite).
2-Yes the rules seem to not be working out for us right now, for all the very reasons you list.
I don't know the answers to that. Hope was the last evil to leave pandora's box, still its nice, stranger things have happened. In the meantime I will take Achilles' rage.
I am certainly not going to shut up and salute my betters who are peeing on my head and telling me trickle down is good for me.
Marginal tax rate hike, Teddy' Roosevelt's 90% estate tax, progressive capital gains taxes (10% for the first mil then progressively higher), etc. financial transactions taxes, Carbon Tax, Family care subsidies, There are lots of tools we can and have used in the past, we just seem to have lost the political will to anything out.
Instead we are in awe at our heros. Snap out of it. They are just men too, and they are taking your money.
October 22, 2009 2:54 PM | Reply | Permalink
Quit the sanctimonious bullcrap, it's not a level playing field, and you know it.
October 22, 2009 3:46 PM | Reply | Permalink
Nah, Spider is in denial. Perhaps having little intelligence or actual talent, it hopes it can emulate the addle-pated grasping stoopid greedy at investment banks.
I suppose it's their best shot outside of learning: ya want fries with that?
How smart is it to bring down the world's economy? Eh? Wot?
The obvious answer is, not very.
Apparently it's definition of "smart" is lacking in second grade comprehension.
October 22, 2009 7:35 PM | Reply | Permalink
This pisses me off to no end.
Just have them pay for their goddam liquidity insurance. The Fed gave them a full backstop when GS and JPM's CDS was running well above 400 bp. So just have them pay the price of that insurance - i.e. 20 billion a year in GS' case (conservative estimate on 500 bn in liabilities at 4% a year given the 400 bp price). Should be easy enough to do given their current 45 billion in annual revenue. Then let them do what they want on the compensation front out of the revenue that's left. Either that or REGULATE THEM AS A GODDAM BANK HOLDING COMPANY.
This idea of limiting compensation regs to the banks of which the Govt is a major shareholder is just a further subsidy to the likes of GS and JPM. It will just depress the price of the prop trading operations that BofA and Citi need to sell off, providing bargain basement prices at which these 'healthier' ibanks can buy them.
October 22, 2009 6:28 AM | Reply | Permalink
Those are good ideas pug, particularly the Bank holding company.
Thanks for the Sorkin link. I truly fear we will never find out the whole story. Did you know that Hank Paulson does not use email- no written evidence at all. WTF.
October 22, 2009 12:20 PM | Reply | Permalink
The Bush Regime will never be held responsible to anyone. I will stand by that statement until I see otherwise. [crickets chirping]
October 22, 2009 1:12 PM | Reply | Permalink
Hate to say it, but there are a few extraordinarily naive guys around here!
GS people are absolutely not the smartest kids on the block - that's a crap idea that has no legs whatsoever.
GS people have CONTACTS! CONTACTS! & contacts!
I must know twenty medical consultants and engineers who could leave any GSer standing with his/ her mouth open.
But GSers know how to work the system and make money. I guess that is pretty clever but don't be over-awed. Most of those guys are lost when you engage them in any other conversationin any other field.
To assume that they are the masters of the universe indicates a basis misunderstanding of how capitalism works - even if you have had occasion to go out and raise some funding, with success.
October 22, 2009 12:29 PM | Reply | Permalink
It is the Audacity of Hope to cry foul when one's compensation is being questioned. The problem with their argument rests with one simple fact, these companies were allowed to retain the same name. None of these companies are what they were before they were bailed out. They are new companies and every salary can be renegotiated. These people have new jobs. Take it or leave it. Good luck finding somewhere else. When companies are bought, everyone's compensation is under review. New owners can decide whether the pay is the same of a new offer is made. Take it or leave it. These are new companies with new owners, owners who never negotiated the old compensation.
October 22, 2009 1:18 PM | Reply | Permalink
Good points Gregor
October 22, 2009 3:30 PM | Reply | Permalink
Can't believe it.
October 22, 2009 6:31 PM | Reply | Permalink