Greedy Guts Us 2

The depth of the injury that Wall Street Greed has done to the US Economy is stunning. But now it is being made worse by the major financial institutions working for their own ends primarily at the risk of the whole economy. Yet the cost to  taxpayers through their Moral Hazard Insurance Agents(think US Treasury and FRB) is in the hundreds of billions of dollars. Yet, the same ” levered-to-the-hilt financiers who-get-off-scott-free” responsible for the debt crisis and economic downturn refuse:
a)to trust each other in handling their bad debts – each party worried that bad assets are being unloaded on them;
b)to co-operate and co-ordinate most rescue efforts proposed by the Treasury and the FRB;
c)to complain about longstanding rules of accounting and valuation that requires some sort of risky future values;
d)to insulate themselves from any new regulations on misbehavior and false derivative/instrument evaluations.
This is hardball being played by the same parties that are responsible for the financial mess we are in.

And if you have any doubts read the following reports:
Business Week – Recession Time looks at the very unpalatable solutions being thrust on consumers
Fortune – Wall Street: How to Fix It
Harpers – The Financial Bubble Cycle
Jacob Zamansky – Rx for Cleaning up Wall Street
Jacob Zamansky – Fortune’s Must Read Articles on Wall Street Bailout
NYTimes – A Fed bailout Crosses the Line
NYTimes – Wall Street Domino Theory

Now what makes this situation so galling is that:
1)the same derelict players get to comeback and do repeat offenses;
2)often in the their departures(think Anthony Mozilo or James Cayne)they receive golden parachutes;
3)these same financiers have rewarded themselves with Titanic pay packets even in down markets;
4)these pay packets and/or company funds are used to lobby against financial reforms;
5)they pay the lowest rate of tax at capital gains rather then the higher earned-income tax rates;
6)they often don’t even pay those taxes; having offshored to Grand Caymans etc.
In short, at a time when financial turmoil is least acceptable, the people that got us into this mess are working quintuple overtime to assure that they and their system get off  scott free. And in fact that this is the real problem – the country has a whole coterie of financial grifters who work an investment shell game that a)constantly puts the country in peril, b) frequently with most of the costs being picked up by taxpayers, employees and shareholders in that order; and c) assures that  they, the financiers,   are always at minimum personal financial risk . And then they have the gall to insist that because their business puts them at “so much personal risk” (ask Jim Carlyle what he did with his billions for the bankrupting Carlyle Group), they deserve the astronomical total compensation that they currently  command (averaging well above $200 million per year per top exec).

I would ask Cayne, Carlyle, Mozilo and others –  how does their risk compare with that of the Lion of Fallujah, the troopers’ affectionate name for Captain Doug Zembiec who commanded scores of men in some of the toughest battles of Iraq.  And the ones who will know will chuckle – “how can we ask him, he is dead”.  And that is my point about who is taking real risks in the world today.

I need a fifth. So the Heritage Institute gets a shill to come on PBS  for a discussion on Wall Street regulation this April. And he  declares “we cant afford to regulate or cap compensation of these investment dealers because they will up and move to London or Hong Kong”. My gosh, maybe we can export these Financial Bubble Creators (see Fortune, Harpers and NYTimes articles) and let them play havoc on the European and Chinese economies.  It seems that is our only hope.