We're Financial Moguls!!!

[Guest Jules]

i know, dude. i will say that we probably differ in our view on just how broad said stroke is. not all ceo's and/or rich folks are bad and trying to keep the middle class down...but some are.

ok.

[NightOfJoy]

Granted.

 

PaulB is doing the broad stroke thing, though.

 

I'll admit to that.

[EL the Famous]

Most of the middle class that lives paycheck to paycheck do it out of greed and overspending.

 

I'm not saying every case is like that, but I would guestimate that about 75% are.

 

People don't realize that they should have about 7-8 months worth of take home salary in the bank for an emergency, like losing your job. Well, they realize it but think it will never happen to them, so why not buy that plasma tv that they don't need. A vacation is more important than a savings account. I've been there, I know how it is.

 

Some friends of mine are taking the whole family on a cruise this winter. I was talking to her yesterday and she was saying how their car is starting to act up and they need to put about $600 worth of work into it but "we don't have that kind of money in the bank." Yet they see nothing wrong with spending over $5K on a family vacation as long as they can put it on a credit card.

 

i keep bringing this up, because it's extremely crucial to the overall picture. we are guilty of it ourselves from time to time and it why i can never point all my fingers at a great big rich guy effigy for my financial well-being.

[viatroy]

Most of the middle class that lives paycheck to paycheck do it out of greed and overspending.

 

 

That depends entirely on whether you're in the 30K a year middle class, or $250K middle class.

[Guest Jules]

That depends entirely on whether you're in the 30K a year middle class, or $250K middle class.

so, if you make 30K a year you cannot overspend?

[austrya]

That depends entirely on whether you're in the 30K a year middle class, or $250K middle class.

 

I know people who make $250K who live paycheck to paycheck and I know people who make $30K and have money in the bank. People need to live within their means.

 

Again, I'm not saying that all cases of living paycheck to paycheck are due to greed.

[EL the Famous]

That depends entirely on whether you're in the 30K a year middle class, or $250K middle class.

 

mmm, the amount one can overspend depends on that sure...but they can still overspend.

[cryptique]

Joe Conason sums up my feelings about all this quite succinctly.

 

This is likely to stir up some of the free-market Kool-Aid drinkers here, but how many times do they have to be proven wrong before they retreat to the sidelines and let the someone else handle things?

 

- - - - - - - - - - - - - - - - - -

 

The corporate financiers are wrong

 

Would they please shut up about the wonders of an unfettered free market? It's taxpayers who are paying the price for their greed -- again.

 

_{By Joe Conason}

 

Sep. 19, 2008 | Now that we're all about to take on hundreds of billions or perhaps a trillion dollars in new public debt to redeem the nation's super-smart corporate financiers, there is one thing I hope we can expect in addition to postponing the apocalypse. Will they all please shut up about the wonders of the unfettered free market and the horrors of big government?

 

For decades, the investment class and their mouthpieces in the conservative movement have been telling Americans that if only we repealed all those musty old New Deal rules and programs, then we could enjoy unprecedented prosperity. Repeated endlessly by the think tanks, magazines and academics of the right-wing machinery, this message eventually drowned out the reality-based ideas of the American liberal tradition. Although those were the ideas that had actually built this country over the past century, they were erased from public consciousness by a combination of amnesia and propaganda.

 

Amazingly, many and perhaps most Americans failed to perceive the deceptions in that propaganda, even after a series of horrific experiences with right-wing ideology run amok. We have been here before, after all -- or at least we have been somewhere that looked a lot like this, and not so long ago.

 

We ought to have learned the way the world really works -- that is, how privilege, power, entitlement and greed undermine free markets -- during the teaching moments of the savings and loan debacle, the corporate scandals of George W. Bush's first term, or any of a number of smaller crises when taxpayers had to rescue major enterprises that were "too big to fail." Indeed, there has been a similar result -- along with higher unemployment, falling family incomes, rising debt and deficits, and neglected public infrastructure -- every time we have bought into the free-market extremism of the Republican right.

 

So now is a good time to try to remember the disastrous consequences of ideological rule. Although the same pattern can be traced back to the 19th century, when robber barons and Republicans pillaged the nation, we need go back no further than October 1982. That was when Ronald Reagan signed the legislation to deregulate the savings and loan industry, long a stable bulwark of the housing market and family finances. "All in all, I think we've hit the jackpot," he quipped charmingly.

 

It was a jackpot for the crooks who took over the thrifts, milked their assets and drove them into bankruptcy -- and for the political cronies of the Republicans who eventually swept up the remains in profitable work-out deals with the government. It was not a jackpot for the taxpayers, who ate the trillion-dollar bill for cleaning up the fiasco and taking over the bad debts because ... well, because someone had to pay the price.

 

Flash forward 20 years to the corporate scandals that exploded during the summer of 2002. Deregulatory fervor had enabled thieving executives at Enron Corp. -- supposedly the very model of the modern enterprise and the symbol of privatization -- to swindle stockholders, drive up electricity costs and forestall any action by government to protect the public. As the company plunged toward insolvency and ruin, taking thousands of innocent employees with it, Kenneth Lay, free-market exponent and donor to dozens of right-wing organizations, tried to get his cronies in the Bush White House and Treasury Department to save him. But while they had done plenty of favors for him, they did not dare step forward at that point.

 

As the Enron affair mushroomed into a national scandal that engulfed other major corporations and accounting firms, even Alan Greenspan, the biggest and baddest free marketer of them all, experienced a few moments of angst. Until that tormented summer, he had always believed that government regulation of corporate integrity was "utterly unnecessary and indeed, most inappropriate," as he told Congress. Then he confessed, "I was wrong."

 

Yes, he was wrong. Reagan was wrong. And the same ideologues who populated the corporate suites at Bear Stearns, Lehman Brothers and American International Group were wrong, too. The legendary former boss of AIG, Maurice "Hank" Greenberg, spent hundreds of thousands of his company's profits promoting right-wing ideology at places like the Manhattan Institute, where he was a trustee. And sitting on the AIG board of directors for the past two decades was Martin Feldstein, the Harvard economics professor whose famous penchant for privatization and hatred of taxation made him the ideological mentor of a generation of Republican politicians and officials.

 

Exactly how much responsibility can be attributed to Feldstein for the AIG disaster remains to be determined. That could be a topic for Sen. McCain's investigative commission to explore -- except that Feldstein is billed as an advisor to the McCain campaign, where he symbolizes, along with Phil Gramm, the precise opposite of the changes that are imperative if we are to avoid yet another cycle of ruin and bailout.

 

No doubt the Feldsteins and the Gramms will still talk the same nonsense, as soon as they are able to lift their heads again. But there is no reason why we should listen.

[NightOfJoy]

Wonderful article, thanks!

[Moe_Syzlak]

Isn't Courtney Love's dad's name Hank Greenberg?

 

/not contributing anything of substance to the conversation

[John Smith]

I pray to God that these people get the living fuck regulated out of them, like FDR regulated them back in '33. Regulators, mount up!

 

They need to re-estabish the 32 and 33 acts and enforce them as they were written. The deregualtion of our banking/financial markets does not work and has not worked deregualtion has failed 2x now (80's & now) Time to go back to the basics..

 

 

No, "we" really don't make the rules, and our "democracy" isn't especially democratic.

 

In a democracy we would get to make the rules all would have a say. Imagine the input of 300 million voters? Nope we live in a republic where the voters elect representatives to listen to the voters and act accordingly.

[mfwahl]

So now that we own half of Wall Street, do we each get a check when they start doing better or does that money still go to the CEO's?

[Guest Jules]

So now that we own half of Wall Street, do we each get a check when they start doing better or does that money still go to the CEO's?

duh, it goes the JUDE/Jules '08 campaign.

[mfwahl]

duh, it goes the JUDE/Jules '08 campaign.

Do you have shirts on cafepress yet?

[Winston Legthigh]

They need to re-estabish the 32 and 33 acts and enforce them as they were written. The deregualtion of our banking/financial markets does not work and has not worked deregualtion has failed 2x now (80's & now) Time to go back to the basics..

Not to quibble, but, it's the 33 and 34 Acts, and they're still valid law.

[John Smith]

Not to quibble, but, it's the 33 and 34 Acts, and they're still valid law.

 

I get the years mixed up and I studied them enough for the CPA exam that I should know them by heart. They are still law, but all the crap passed in the last couple decades that weaken them need to be rescinded so that the acts have their full force again.

[H-Bomb Henry]

So now that we own half of Wall Street, do we each get a check when they start doing better or does that money still go to the CEO's?

 

I wonder if the banks will still charge us ATM fees since we are the owners.

[sweetheart-mine]

I wonder if the banks will still charge us ATM fees since we are the owners.

and business licenses. $65 in my town.

[Elixir Sue]

Regulators, mount up!

[bjorn_skurj]

I'm tellin' ya, if I was president, my press conferences would f rule.

[Party @ the Moontower]

I'm tellin' ya, if I was president, my press conferences would f rule.

 

 

Would you wear your Member's Only Jacket? And, if so, what color?

[tugmoose]

Here's the big plan:

 

It's elegantly simple. The three key provisions: (1) The Treasury Secretary is authorized to buy up to $700 billion of any mortgage-related assets (so he can just transfer that amount to any corporations in exchange for their worthless or severely crippled "assets") [sec. 6]; (2) The ceiling on the national debt is raised to $11.3 trillion to accommodate this scheme [sec. 10]; and (3) best of all: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency" [sec. 8].

 

Put another way, this authorizes Hank Paulson to transfer $700 billion of taxpayer money to private industry in his sole discretion, and nobody has the right or ability to review or challenge any decision he makes.

 

Pretty sweet!!!

[Good Old Neon]

So now that we own half of Wall Street, do we each get a check when they start doing better or does that money still go to the CEO's?

 

No, unfortunately, we

[Good Old Neon]

Humor me.

 

Well, a full accounting would crash not only this server, but the whole fucking internets. Do yourself (and everyone else) a favor, pick up a book and read it every now and again, please. Your library card has grown stale and moldy - apparently.

[Good Old Neon]

Yet again, Salon's Glen Greenwald nails it on the head:

 

What is more intrinsically corrupt than allowing people to engage in high-reward/no-risk capitalism -- where they reap tens of millions of dollars and more every year while their reckless gambles are paying off only to then have the Government shift their losses to the citizenry at large once their schemes collapse? We've retroactively created a win-only system where the wealthiest corporations and their shareholders are free to gamble for as long as they win and then force others who have no upside to pay for their losses. Watching Wall St. erupt with an orgy of celebration on Friday after it became clear the Government (i.e., you) would pay for their disaster was literally nauseating, as the very people who wreaked this havoc are now being rewarded.

 

More amazingly, they're free to walk away without having to disgorge their gains; at worst, they're just "forced" to walk away without any further stake in the gamble. How can these bailouts not at least be categorically conditioned on the disgorgement of ill-gotten gains from those who are responsible? The mere fact that shareholders might lose their stake going forward doesn't resolve that concern; why should those who so fantastically profited from these schemes they couldn't support walk away with their gains? This is "redistribution of wealth" and "government takeover of industry" on the grandest scale imaginable -- the buzzphrases that have been thrown around for decades to represent all that is evil and bad in the world. That's all this is; it's not an "investment" by the Government in any real sense but just a magical transfer of losses away from those who are responsible for these losses to those who aren't.

 

And all of this was both foreseeable as well as foreseen -- see the 2002 grave warnings from Warren Buffett on pages 14-15 of his shareholders letter (.pdf), among many other things -- and it's also happened before, when the Federal Government bailed out the S&L industry that (with John McCain's help) was able to gamble recklessly and then force the country to protect them from their losses. The people who did this have no fear of anything -- they completely lack the kind of healthy fear that impedes reckless behavior -- because they know how our Government works and that they control it and thus believe that their capacity to suffer is limited in the extreme. And they're right about that.

 

What's most vital to underscore is that the beneficiaries of this week's extraordinary Government schemes aren't just the coincidental recipients of largesse due to some random stroke of good luck. The people on whose behalf these schemes are being implemented -- the true beneficiaries -- are the very same people who have been running and owning our Government -- both parties -- for decades, which is why they have been able to do what they've been doing without interference. They were able to gamble without limit because they control the Government, and now they're having others bear the brunt of their collapse for the same reason -- because the Government is largely run for their benefit.

 

If there is any "pitchfork moment" -- an episode that understandably would send people into the streets in mass outrage -- it would be this. Nobody really even seems to know how much of these losses "the Government" -- meaning working people who had no part in the profits from these transactions -- is undertaking virtually overnight but it's at least a trillion dollars, an amount so vast it's hard to comprehend, let alone analyze in terms of consequences. The transactions are way too complex even for the most sophisticated financial analysts to understand, let alone value. Whatever else is true, generations of Americans are almost certainly going to be severely burdened in untold ways by the events of the last week -- ones that have been carried out largely without any debate and mostly in secret.

 

Third, what's probably most amazing of all is the contrast between how gargantuan all of this is and the complete absence of debate or disagreement over what's taking place. It's not just that, as usual, Democrats and Republicans are embracing the same core premises ("this is regrettable but necessary"). It's that there's almost no real discussion of what happened, who is responsible, and what the consequences are. It's basically as though the elite class is getting together and discussing this all in whispers, coordinating their views, and releasing just enough information to keep the stupid masses content and calm.

 

Can anyone point to any discussion of what the implications are for having the Federal Government seize control of the largest and most powerful insurance company in the country, as well as virtually the entire mortgage industry and other key swaths of financial services? Haven't we heard all these years that national health care was an extremely risky and dangerous undertaking because of what happens when the Federal Government gets too involved in an industry? What happened in the last month dwarfs all of that by many magnitudes.

 

The Treasury Secretary is dictating to these companies how they should be run and who should run them. The Federal Government now controls what were -- up until last month -- vast private assets. These are extreme -- truly radical -- changes to how our society functions. Does anyone have any disagreement with any of it or is anyone alarmed by what the consequences are -- not the economic consequences but the consequences of so radically changing how things function so fundamentally and so quickly?

 

Other countries are debating it. The headline in the largest Brazilian newspaper this week was: "Capitalist Socialism??" and articles all week have questioned -- with alarm -- whether what the U.S. Government did has just radically and permanently altered the world economic system and ushered in some perverse form of "socialism" where industries are nationalized and massive debt imposed on workers in order to protect the wealthiest. If Latin America is shocked at the degree of nationalization and government-mandated transfer of wealth, that is a pretty compelling reflection of how extreme -- unprecedented -- it all is.

 

But there's virtually no discussion of that in America's dominant media outlets. All one hears is that everything that is happening is necessary to save us all from economic doom. And what's most amazing about that is that the Natural, Unchallenged Consensus That Nobody Questions can shift drastically in a matter of days and still nobody questions anything. This is what Atrios observed as I was writing this post:

 

It's fascinating to watch how easily consensus is manufactured. A few days ago elite opinion seemed to be cheering Paulson's "no bailout" line, and now they're cheering a trillion bucks thrown down the crapper. All the Very Serious People will spend their days coming up with their pony plans, oblivious to the fact that the pony plan is not an option. The Bush administration's plan is the option.

The way it works is that Bush officials decree how things will be, and then everyone -- from Congressional Democrats to the Serious Pundits -- jump uncritically and obediently on board, even if they were on board with the complete opposite approach just days earlier, and then all real dissent vanishes. That's how the country in general works. As Atrios says: "We've seen this game played before."

 

I don't pretend to know anywhere near enough -- in terms of either raw information or expertise -- in order to opine on the necessity or lack thereof of The Latest Plan in terms of whether the alternatives are worse. But what I do know is that an injustice so grave and extreme that it defies words is taking place; that the greatest beneficiaries are those who are most culpable; and that the same hopelessly broken and deeply rotted institutions and elite class that gave rise to all of this (and so much more) are the very ones that are -- yet again -- being blindly entrusted to solve this.

 

 

 

source - http://www.salon.com/opinion/greenwald/2008/09/20/bailout/