Showing posts with label bankers. Show all posts
Showing posts with label bankers. Show all posts

Saturday, February 6, 2010

stockman's take

NPR aired a short interview with David Stockman, the former budget chief of Ronald Reagan, last night. Mr. Stockman may have surprised many by saying banks needed to be regulated. He, who once ran a hedge fund, sounded surprisingly like Nobel laureate Krugman when he laid out his vision for small banks and a split in banking between deposit banks and wall street gunslingers.

He also acknowledged that the tax cuts, a key Reagan platform, did not work. He probably knew that all along, as did all the other Republicans, but their goal, after all, was to fill their wallets, country be damned. Each and every tax cut they implemented added to their and their friend's bottom line and that is what this was all about. The fact that so many not-so-well off people went along just shows you how brain-washed the whole country is. It is another example of people voting against their own self-interest.

Stockman also predicted that the era of tax cuts is over. What we are facing now is a decade of tax increases. The cutting is over, there is nothing left to cut. What we need now is to put money in the government's coffers so it can take of our long-ignored issues.

Wednesday, January 20, 2010

massachusetts

Much has been said and will be said about the senate vote in Massachusetts, but in reality the outcome was not unexpected. Especially not in light of what happened earlier in Virginia and New Jersey. And even less so when you hear the talk inside the beltway. Democrats are bracing for a loss of up to 30 seats in midterm elections. Clearly they know something is up. Some of the more prominent ones have already preempted a defeat by declaring they won't run again.

There is no doubt that this string of losses is a rebuke to Obama. The new president's popularity is low compared to that of his predecessors. He barely tops Carter and comparisons with Carter are sure to follow. Unfortunately a lot of it is of his own doing.

The keys to defeat lie in the unrealistic expectations that were only topped by the even more unrealistically high fundraising. Both are coming home to roost.

I agree with Krugman at the NY Times that Obama made serious mistakes. The stimulus was too small and it did not reach the intended beneficiaries. The bankers got bailed out without so much as a slap on the wrist, while middle class families are losing their homes, their retirement, and their savings. It is obvious Obama is in bed with Wall Street. I pointed this out before and predicted it would cause major problems.

I also agree with the Rutten at the LA Times that the administration did not do a good job explaining healthcare. While it addresses the 30 million uninsured, it appears to offer little or nothing to the 270 million who have insurance. All they can see is more deficits that they know they will have to pay for. Never mind that their coverage could lapse, that they might be bumped when they need it, or that they will find out it does not cover their expenses. For now it appears to them that things are OK.

But Rutten goes further. He points to the anger that he says is due to the fact that American middle class families are worse off than their parents. Some of that may be a factor. The American economy is not so much a wealth creator as it is a wealth shifter. It has shifted massive amounts of wealth from the poor and the middle class into the hands of the few. In doing so it has bankrupted over half the population. The shifting is running out of resources to shift.

Everything was done by deceptive means. US style capitalism appeals to people's worst behaviors such as greed, lust, pride, envy and gluttony while making fun of altruism, cooperation, and moderation. It pits people against their friends and neighbors. It uses fear and anger and preys on feelings of inadequacy and inferiority. It relies on illegal immigrants and workers on job-related visas that have no bargaining power and can be used to undercut the wages those who seek a decent living. It uses layoffs to boost quarterly earnings, and promote job-insecurity in workers.

It has promoted women, not because it believes in feminism, but because additional lower paid workers helped create an environment that is aversive to organizing, unionizing, and bargaining power. It also helped create a false sense of wealth and that drove more consumption.

It uses open markets and tax payer subsidized oil to bring in items from abroad, where labor laws are lax and environmental issues of no concern. It treats many parts of the world as colonies to be stripped of resources and valuables.

Furthermore, the unfortunate situation is leading to a country that is becoming ungovernable. The State of California has already reached that impasse. Soon the nation will follow. Like Rome before it, the American republic may soon become a dictatorship or go down in anarchy.

Friday, July 17, 2009

payback time

Is anyone surprised that Goldman Sachs made another fortune? First the government bails them out and then they let them get away with business as usual. No regulation for bankers! A virtual slap on the wrist and some nice rhetoric from Obama was punishment enough for the financial tycoons.

That is what you get when you pay big money for election campaigns and inauguration ceremonies. In the meantime the country is suffering, people are losing their jobs, homes are being foreclosed, while the bankers are churning through whatever excess wealth is left to generate commissions and profits.

Expect another round of excessive bonuses. That is what bankers get when they bring in the goods. And as long as the regulators let them get away with it, they will succeed in bringing in more. This charade will only end when there is no more wealth to be shifted. Since the bankers do not produce anything, and since they don't even finance productive companies, the country will eventually run out of resources to pay their fees. But that will be someone else's problem. We have some "useful" time left before that happens.

What we are seeing is a new financial crisis in the making. But for now, that is something the bankers won't worry about too much. Now they will concentrate on how to spend their lavish bonuses. Why would anyone worry with a safety net like bankers have? The tax payers will foot the bills so Wall Street can extend the party for another couple of years.