Sep 25 2008
No Bail, Let Them Fail
As a former member of the now defunct middle class I see no reason to bail out Wall Street and the financial geniuses that have brought the present crisis to our economy. The White House and Congress are attempting nothing more than saving their corporate backers from economic ruin. Remember these two august institutions, White House and Congress, are powered by the graft and greed of lobbyist representing the industries who have broken the bank.
Our lame duck disaster monkey in the White House stood blinking, pale and shaken like a deer in the headlights last night while he gave another one of his “you gotta do it or we all die” speeches. It is hard for any of us to take anything he says seriously. He is the chief enabler of the wrecking crew that has destroyed Wall Street and our economy. How can the people responsible for this fiasco correct it? They can’t. When the current resident of the White House was through talking all I could think of was, “well, so. I still want to know where the WMDs are.”
“I’m a strong believer in free enterprise, so my natural instinct is to oppose government intervention,” he said. But “these are not normal circumstances. The market is not functioning properly. There has been a widespread loss of confidence.
“Without immediate action by Congress, America can slip into a major panic.” (Source: CNN)
They have done little to build our confidence in a long time. And the only people really panicing are are the unscrupulous CEOs and brokers who have made fortunes off the backs of their share holders. Imagine how well the public share holders would be if they didn’t have to pay billions every year to fuel the greedy CEOs. What if those bloated paychecks were put back into the pockets of those who invested with these banks.
So now the deregulators want the government to step in, bail them out and for a little while anyway, regulate the out of control banking industry. The party of less government has just decided that the only way to cure the ills they have brought on our country is to socialize it. We can just start calling this the Union of Socialist America. They want to socialize the banking industry, but they will have nothing to do with socializing medicine. To hell with the small guys, lets save the banks.
A prime example of greed is failed CEO Richard Fuld.
Richard Fuld, the CEO of Lehman Brothers, is paid $45-million a year. Let’s be charitable and presume that he puts in 40 hours a week — his pay works out to be $21,634 an hour. In other words, it takes Fuld less than three hours to make what the average family earns in a year.
Isn’t this the sort of inequality — and obscene riches — that set off revolutions in other countries over the centuries? (Source: St. Petersburg Times)
Nobody, I mean nobody on the entire planet is worth $21,634 an hour. Why do we put up with this nonsense? Shareholders should look closely at these CEOs and punish, not reward failure. After all, it the shareholders who these people are steeling from.
There are solutions to eliminating the Golden Parachutes that save so many of these business failures.
But that was a drastic measure. Banks’ boards of directors, encouraged by their shareholders, must look hard at reforming the pay of top bankers. The core problem is this: Bankers get stellar rewards in the good times and don’t have to give money back when their strategy sinks the bank a few years down the road. They might miss a bonus, or even get fired – and float down to earth on the “golden parachute” negotiated in the flush years.
One way to change this would be for banks to hold a big chunk of bankers’ pay in escrow, to be doled out over several years. A bigger share of a bankers’ pay could be made in restricted stock that can only be sold over a fairly long period of time. Golden parachutes could depend on good performance through the executive’s tenure. (Source: International Herald Tribune)
But then back to the blundering boneheads in Washington. We’ve heard so much bullshit and hot air coming from them over the past 8 years that no body pays them much attention. They are finding it harder and harder to sell us a bill of goods that anyone trusts.
“Not believable,” Schweitzer says when asked about the case by Bush and others that the package needs to be approved this week to avoid dire results. He says Congress needs to take its time and “ask a few questions.”
And he says if the plan is going to be palatable to people out here, it has to pass a clear test: “If we are going to bail these coyotes out, then why wouldn’t we have an equity position? Why wouldn’t the taxpayer make a little money if they do turn around instead of just shoving that money out the door and have them pay themselves big golden parachutes?
“I think we need a Congress that stands up and asks the tough questions and says, ‘Look, it might take us a couple extra days to get this done.’ ” (Source: CNN)
The above is from the State of Montana. Refreshing to hear someone tell the government, slow down, take your time and get it right. Now the question is can they?
It is very hard to believe some one or a group of people after that person or the group lied to you. In the case of president Bush’s supposed urgency in bailing out Wall Street to save the American people from economic ruins is all a ploy to score some points before he leave office and to protect their economic interest seeing that many of them have millions of dollars invested in many of these institutions. If they don’t step in, they stand to lose millions so it is more about their interest.
The debate between the two presidential candidates is slated for Friday, will the economy calapse by Saturday if the debate is held? But putting forth this package and asking the presidential candidates to be in Washigton is to help Senator McCain have an excuse to not participate in the debate and thus avoid further slippage in the polls.
Yes the economic situation needs to be address by those in power that have the authority to legislate but it should first be about helping the fathers, mothers, students, non-parental adults, seniors, small business etc to cope in meeting their daily obligations without having to file bankcruptcy so as rid themselves of the mountain of debts they are facing as a result increase in cost of living and fuel cost that further reverberate throughout the economy, and is of no fault of theirs.
Beside helping the stocks of the institutions from declining further, what will the average person who did not have the disposable income in the first place to invest but pays taxes, gain after they are left indirecly saddled with the $700 Billion bailout package bill? Any package should ensure that the average person get some form of recue with their mortgage in the form of an affordable reorganizing payment format and that there be equity for these tax payers that when the economy turns around money is earned from these institutions and channelled into health care, education and infrastructure maintenance and upgrade. Also, there should be an accountability condition that will result in those responsible for the crisis to be punish and not rewarded. I therefore agree with Mr. Schweitzer position.