The Thankful Billionaires

By: Teddy
Published On: 11/22/2007 6:19:11 PM

A few thoughts for Thanksgiving in 2007.  Well, actually, the year has not been particularly good for either the dollar or the financial markets.  The dollar has tanked---- but one result may have been a decrease in our current accounts deficit, a blessing in disguise, perhaps?---- and the financial markets are verging on collapse as the sub-prime mortgage implosion causes major banks and hedge funds to confess to unimaginable losses---- yet one result is an end to that irrational exuberance of a housing bubble, another other blessing in disguise, perhaps?
It has been said that "the economy" is not really suffering significantly from what is called merely an overdue adjustment.  Be thankful that Fannie Mae and Freddie Mac lost only 25 percent of their market value Tuesday.  Besides, who among us can appreciate, much less understand just how many billions going toward trillion dollars those mysterious hedge funds vomited out this month, since it was, after all, paper marks for so-called derivatives, whatever that might be, like Monopoly money standing for--- nothing, i.e. just paper, unreal.  As my Northern grandmother used to say: moonlight and running water. 

That must be so because the Wall Street financial institutions which created the sub-prime mortgage debacle and the derivatives therefrom, even after writing off countless billions in losses, are still rewarding the clever devils who created one of the worst years on record with record-setting bonuses.  Hey, the profits were luscious while it lasted, those boys earned it!

Wall Street year-end bonuses this year will amount to at least 38 billion dollars for certain employees of Merrill Lynch, Lehman Brothers, Morgan Stanley, Bear Stearns, and Goldman Sachs, despite the fact that Bloomberg News noted that shareholders of the securities peddled by those very same employees lost some $74 billion of their equity over the same year.  As Eric Fry, writing in Agora Financial Rude Awakening on 22 November 2007, said: "...what rationale could possibly exist for establishing a new record payout?  Maybe just this: because they can get away with it... sanctions imposed by the Securities and Exchange Commission in fiscal 2007 fell to the lowest level since 2002." That would be after George Bush began appointing automatons with ideologic brain filters to regulatory bodies. Greed is good, and, as Fry says, "Wall Streeters already believe that 'what's yours is theirs.' He adds, "the connection between merit and pay disappeared a long time ago." Truthfully, that trend began around the same time as executive pay took off to outrageous levels, and that picked up phenomenal speed also when Bush II took over, part of what can be seen as an historical trend toward jungle capitalism. 

So, a sum equal to maybe half the losses of the shareholders will go into the pockets of the suits on Wall Street.  It seems a small price to pay for the benefits of necessary globalization, flattening the world, right? Just how much is 38 billion, anyway?  Thanks to Mr. Fry, we know that 38 billion exceeds the annual GDP of Guatemala or Costa Rica; it is three times more than the entire world spent on humanitarian aid in 2006; it is twice the amount necessary to provide basic health care to every child on the entire planet, and three times the amount necessary to provide clean drinking water to those children.  Closer to home, it is seven times the annual budget of the U.S. National Cancer Institute.

What 38 billion is NOT, however, is also revealing: compare that 38 to the $118 billion the world spends on wine, and the $794 billion the world spends on "waging war or preparing to wage war."  General Dwight D. Eisenhower, no slouch when it came to war, and a Republican President himself, is quoted as saying "Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed... Under the cloud of threatening war, it is humanity hanging from a cross of fire."

It can be said, of course, as Fry does, that these excessive bonuses unrelated to merit (and the wildly inappropriate golden parachutes for fired, failed CEOs) may not be as costly to humanity as warfare, but they do steal money from shareholders, create what he calls a "lottery mentality" among financial firms, sanitize unbridled avarice-- and, ultimately, legitimize socio-economic disparities and squander our nation's collective treasure and hopes "just like warfare."

The further connection Mr. Fry overlooks, is that these greedy financial stewards, these self-aggrandizing and over-compensated executives are part and parcel of the so-called conservative ideology.  This ideology masquerades as free market, free enterprise when what it really is, is a  cover story enabling  plutocrats to seize state power in order to provide themselves with subsidies and protection while they grab as much as they can.  Institutionalized avarice is the true god of Republican theocracy, whose acolytes regard a nation's wealth, including its people, as rightfully theirs to be developed, that is, plundered, for which the plundered should be grateful since they received jobs in return, and, perhaps, a somewhat more modern standard of living. In that context, 38 billion for some Wall Street pimps is a small price to pay.  Too bad the word got out.

 

Comments



Egregious Wall Street bonuses (Teddy - 11/22/2007 7:05:21 PM)
are a symptom, not a one-off unusual event. See Lowell's article on Raising Kaine on how the constant emphasis on profit to the exclusion of all other motives influences the supermarkets' harming biodiversity by forcing the growing of just a few crops, and the cumulative dangers which result. Consider the outlandishly increasing gap between the earnings of the average worker in a firm and the compensation packages of the top executives. Ask how globalization has really helped (or not) the people of the third world, rather than the wealthy elites... not to mention what has happened to the average worker in the United States.  Does it really increase the world's store of goods when we emphasize military spending and wars that simply blow up the product of human labor, creating no new wealth (except for the owners of the arms factories)? Is this a sustainable system, good for the majority of people? Just because "it's always been this way" is no excuse.


Our President called for a Culture of Personal Responsibility,... (dsvabeachdems - 11/22/2007 8:48:31 PM)
but he never meant it. He himself has always been bailed out of every tight situtaion in which he's found himself. And, now there is no authority capable of holding him accountable for his horrible misdeeds, so once again he will escape all but history's judgment. He never meant it and has no clue what it means except that the downtrodden must be responsible for their own miserable lives and we have no obligation to them.

Teddy, you have set forth a masterful indictment.



There is an authority capable (Teddy - 11/22/2007 9:45:29 PM)
of holding the President to account, and it is Congress. But the key world is "capable;" and that ability seems to be beyond today's Congress. You are correct.


They own the Congress too (Rebecca - 11/23/2007 2:09:21 PM)
Until we change how we finance elections and who runs the CIA Black OPS, the Congress will be owned by those who represent corporations and would like to see a fascist state.


Money trumps people every time (Teddy - 11/23/2007 4:35:15 PM)
although sometimes it is subtle. A flood of money can buy infomercials and disguised propaganda to create popular fads or mindsets, causing the unwary to vote or act against their own rational best interests, or to move a population toward willing submission. Since the advent of the Internet, there has been some push-back against this manipulation--- and that is a problem for the money, what you refer to as the fascists. We are now fighting a (probably losing) battle to maintain the independence of the Internet against these ghouls, but it is almost a secret, unknown battle.