Entries in Politics (62)
Privatized profits, socialized losses - II
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New York City securities industry firms paid out a total of $137 billion in employee bonuses from 2002 to 2007, according to figures compiled by the New York State Office of the Comptroller. Let's break that down: Wall Street honchos earned a bonus of $9.8 billion in 2002, $15.8 billion in 2003, $18.6 billion in 2004, $25.7 billion in 2005, $33.9 billion in 2006, and $33.2 billion in 2007.
Those years were the heyday of the hedge fund pirate, the private equity buccaneer, the 9- and 10-figure-salary quant jock, and other financial creatures who created all kinds of complex securities and highly leveraged transactions, many of which are now coming a cropper, from LBOs to CDOs.
What a deal. Financiers preached the free-market gospel and pocketed unheard-of sums of money—yet when times got tough, they called for a government bailout. "Markets work if participants are at risk to both positive and negative consequences," says Raghuram Rajan, an economist at the University of Chicago Graduate School of Business and a former chief economist at the International Monetary Fund. "But on the upside, [financial firms] said, 'Hands off, don't upset the party,' and 'Don't even think of regulating us,' yet when things go the other way they say, 'We need help.'"
To be sure, not everyone has escaped unscathed. Nine months ago, Bear Stearns stock sold for $150 share. JPMorgan Chase (JPM) bought the beleaguered investment bank for $2 a share over the weekend, wiping out much of the wealth of the firm's employees.
I am now waiting for the op-eds which warn us against any knee-jerk reactions towards more regulation which could stunt the growth of the economy. Again I am struck by the tone I see in the press, most of the reporting just seems to be just that, a dry recitation of what happened with seemingly no insight into why we got into this fine mess and the unseemliness of the Fed doing all it can to shore these guys up with no sense of accountability.
And yes Obama and Mccain had responses, the wishy washy non response which got praised for not being (yes you got it right) a knee jerk reaction. No one dare question what's happening, or the establishment.
Samuel Selvan
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Where profits are privatized and losses are socialized.
As expected, a set of rules for the haves as opposed to the punitive ones we see for the have nots. How the hell are the small government types going to spin this? Welfare is bad when it supports the poor people but somehow this is not?
Where is the outrage, where is the righteous anger? Is anyone going to be held accountable at all for the fine mess we are in?
So the question is: if Bear Stearns screwed up big time - as it did - with huge leverage, reckless investments, lousy risk management and massive underestimation of liquidity risk why should the US taxpayer bail out this firm and its shareholders? First fully wipe out those shareholders, then fire all the senior management and have the government take over such a bankrupt institution before a penny of public money is wasted in bailing it out. Instead now the use of public money to bail out financial institutions is spreading from banking ones to non banking ones. The Fed should at least give a clear and public explanation of why such extremely exceptional - and almost never used - intervention was justified.
From the RGE Monitor via Atrios
I for one am not holding my breath. Isn't this a major event worth a response from the Presidential candidates. I am waiting to see if someone says something about this shame. Does nothing to help my cynicism.
Jesus wept
If you don't read 'Ask a Mexican', you should start right now. Here's why
After the amnesty bill was defeated, I noticed a lot of self-professed Christian conservatives were happy. They must’ve forgotten Leviticus 19:33-34: “And if a stranger sojourn with thee in your land, ye shall not vex him. But the stranger that dwelleth with you shall be unto you as one born among you, and thou shalt love him as thyself; for ye were strangers in the land of Egypt: I am the LORD your God.” How can a true Christian disregard this passage?
The Holy Niño of Tejas
Dear Readers: The saintly wab brought up a pet peeve mío. I don’t care if you’re an Aztlanista or Tom Tancredo: PLEASE stop quoting biblical verse to bolster your position on illegal immigration. Many pro-immigrant advocates cite the above Leviticus passage to argue God is on their lado; Know Nothings shoot back with John 10:1, in which Jesus told the disciples, “Verily, verily I say unto you: He that entereth not by the door into the sheepfold, but climbeth up some other way, the same is a thief and a robber.” Pro-amnesty types reply with Paul’s Letter to the Hebrews stressing, “Be not forgetful to entertain strangers”; Know Nothings respond, “Render therefore unto Caesar the things which are Caesar’s; and unto God the things that are God’s.” If the Bible has taught us any lesson in our postmodern world, it’s this: The Good Book is bueno nowadays only to bolster flimsy reasoning. The sole Bible passage that accurately describes illegal immigration is John 11:35 (“Jesus wept”). Apply to your vanities as needed.
Good on ya
Not Surprised
A BP executive formerly in charge of monitoring corrosion at the oil company's Prudhoe Bay operations in Alaska on Thursday refused to testify under oath at a congressional hearing that examined the oil company's litany of failures in the US....
BP last month shut down half its oilfield in Prudhoe Bay after government-ordered inspections found severe corrosion of the eastern oil transit line.
Remind me again why a smaller government that does not regulate is good for everyone. This is how well the market regulates itself and I am surprised there hasn't been a huge backlash against BP. Maybe, its anti-capitalist and anti-Christian to complain about rich oil companies.
