The Burdens of Being Wall Street: Let the Dog and Pony Show Begin

Tuesday, February 10, 2009 at 08:20 PM

Nothing gets a concerted anti-regulation propaganda effort going as quickly and widely as the hint of a possibility of a chance that the public is thinking of reining in the rich and the powerful. And so, as the media trumpet new "restrictions" on CEO compensation in one version of the stimulus bill, and the public mood toward financial industry executives and charlatans turns surly, we get: (a) odes to the beauty of greed, (b) whimpers about the lack of compassion for how expensive it can be to "live up to your station," and (b) an orchestrated dog and pony show on how onerous the new "restrictions" are.

First up: Roy C. Smith, "professor of finance at New York University's Stern School of Business,...former partner of Goldman Sachs." Writing in the Wall Street Journal (where else?), Smitty offers up the brave title of "Greed is Good" in an editorial where he:
  • Makes the dubious claim that "no Wall Street CEO taking federal money received a bonus in 2008, and the same was true for most of their senior colleagues." I have serious doubts about the technical accuracy of that claim, though I don’t have the energy to investigate it enough to show where he’s wrong.
  • Asserts that Wall Street types have already been punished in that "Not only did those responsible receive no bonuses, the value of the stock in their companies paid to them as part of prior-year bonuses dropped by 70% or more, leaving them, collectively, with billions of dollars of unrealized losses." That assumes, of course, that they all held this stock until the market truly crashed; as insiders, I’m betting that large chunks of those securities were cashed in before the bottom came rushing up to meet them.
  • Says that "Wall Street is one of America's great export industries" based on the fact that "less than half of the value of this combined market value [of all stocks and bonds outstanding in the world] is represented by American securities," yet "American banks lead the world in its origination and distribution." Pretty shaky evidence, there, Mr. Smith. If US securities represent, say, a plurality of, say, 35% of all securities, and the US "leads the world" in origination by issuing a plurality of 35% of all securities, where exactly would the "export" aspect be? He may be right, but his figures don’t establish it.
  • Posits that "capital-markets industry" is a unique environment where the people who flourish are "willing to take the risk that they might be displaced by someone better or that mistakes or downturns may cause them to be laid off or their firms to fail." That only happens on Wall Street, right? Certainly that wouldn’t apply to the auto industry, say. And God knows that no blue collar worker would ever be "displaced by someone better" (or, more likely, "cheaper," which makes them seem “better” to the employer).
I take it that if greed is good, misrepresenting it is even better?

Then we have—surprise!!—the WSJ again offering up a dire warning about all this confounded “class warfare,” again bravely titled: Class Warfare; Railing Against the Rich: A Great American Tradition. Here, Alan Brinkley offers up an historical review of past economic populism movements, from Huey Long to Father Coughlin to the movie and book versions of The Grapes of Wrath. As to the latter, Brinkley darkly notes that neither author Steinbeck nor director John Ford condemned the act of the main character in killing a strikebreaker.

Brinkley warns that we may be approaching another such era, pointing out that "the demonization of the upper class" during the Depression didn’t really start until two years after the market crashed. He sees signs of this warfare in our current circumstances, in the form of:

the perverse fascination with Bernard Madoff's remarkable fraud, the popular outrage at the tax problems of public officials, the growing contempt for the many overseers of the credit markets, the ruined investments of millions of ordinary people, the growing army of the unemployed (still far below the 15% to 25% unemployment of the 1930s, but 7.6% in January and growing fast), the likelihood of a recession that could last not just for months, but for years. These are the preconditions of populist revolts. Mr. Obama's chastisements of bankers and CEOs have been relatively mild compared to the routine denunciations of "economic royalists" in the 1930s. But the longer the crisis goes on and the deeper it grows, the more Huey Long-like challenges to those in power will arise, and the more pressure there will be for national leaders to launch populist battles of their own.
While Brinkley doesn’t explicitly denounce the idea of popular resentment, per se, he does manage to portray the tendency to blame the rich as dangerous and manages to completely ignore a central fact: the popular resentment is based on a real harm done to real people by those in power, and usually by those in power abusing their power.

I’m guessing that Mr. Brinkley has not found the need to wield his pen against such past examples of class warfare as the armed attacks of employer goons on unionists during the first half of the 20th century, the multiple games employers play to avoid unions, and the abuse of powerless injured workers forced to sign releases for pittances.

Personally, I don’t find the fascination with Madoff’s fraud "perverse." I find it very understandable and a natural reaction to realizing that all the so-called experts could fail to see such an obvious problem going on for years and years.

In fact, the economic populism which Brinkley laments, and which carries a real danger if the anger is uncontrolled and misdirected, is usually a result of the "little people" realizing that the upper class, for all its claims to special knowledge and privilege, doesn’t really have a F’ing clue what the hell they’re doing and doesn’t really care what happens to the people so far, far below them.

Finally we have the true dog and pony show concerning Obama’s attempt to cap the compensation of CEOs who make use of federal bailout money. First is the knee jerk response that people just don’t understand how hard it is for the privileged to maintain their station in life. Why, capping a CEO’s compensation at half a million dollars annually would amount to deprivation. Check out Allen Salkin’s NY Times piece titled "You Try to Live on 500K in This Town." I truly hope that this is at least partially tongue in cheek on the author’s part, though the quotes it includes provoke simultaneous laughter, anger and nausea:

  • "As hard as it is to believe, bankers who are living on the Upper East Side making $2 or $3 million a year have set up a life for themselves in which they are also at zero at the end of the year with credit cards and mortgage bills that are inescapable. Five hundred thousand dollars means taking their kids out of private school and selling their home in a fire sale." Holly Peterson, the author of an Upper East Side novel of manners, “The Manny,” and the daughter of Peter G. Peterson, a founder of the equity firm the Blackstone Group.
  • "People inherently understand that if they are going to get ahead in whatever corporate culture they are involved in, they need to take on the appurtenances of what defines that culture. So if you are in a culture where spending a lot of money is a sign of success, it’s like the same thing that goes back to high school peer pressure. It’s about fitting in." Candace Bushnell, author of Sex and the City.
In law school, I had a professor who gave a seminar on the "need" for lawyers to charge a lot for doing wills just so that clients would feel that the lawyer was special, had special knowledge, and could be trusted. Riiiiiight.

It’s beautiful. We’ve lived outrageously for so long that we have by some magical force created a right to continue to live outrageously, if for no other reason than making our lifestyle so different from normal people’s that everyone will think we’re worth something. Frankly, I used to walk to work, but now I carry a lunch.

And that brings us to the true dog and pony show. Those "restrictions" on CEO compensation if the companies take federal bailout funds? They’re pretty limited restrictions. And all past attempts to impose similar restrictions have been easily avoided by the expensive brain trusts that oppose them.

The restrictions do not, for example, apply retroactively. Any bonuses paid prior to their enactment are not covered. Nor do the restrictions apply to companies that took federal bailout money before the restrictions were enacted—and much of the bank bailout money has already been handed over. Nor will the restrictions necessarily apply to all CEOs who take bailout money after the restrictions were enacted. They only apply to firms that take "exceptional" assistance in the future. Any bets on how "exceptional" will end up being construed once the CEOs start to bitch up a storm?

As to how the business world wiggles around such annoyances as restrictions on compensation, well, just read the LA Times article.

That’s an awfully cute dog, and such a pretty pony pulling that little wagon. What were we talking about, again?

Comments

It is pretty typical for those who call themselves, "socialists," to ignore the causes of economic crises (their own failing economic rules & regualtions) and to erect a strawman to knock about; as if they were the moral judges of all things dealing with money.

This sort of dictatorial attitude is only different in emphasis, than is any effort at religious zealotry in defining what the public's morals should be. Indeed, the Leftwing zealot has no scruples in propagandizing the gullible proletariate with virtual lies and misdirections; as might yoke the moralist's efforts in proselyting.

For example, here we have the "evil rich" as the target for defammation, ridicule and dehumanization - while for Goerring's famous quote, reveals the "truth" of that sort of effort, in part:

"... Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is TELL THEM THEY ARE BEING ATTACKED, and denounce the peacemakers for lack of patriotism and exposing the country to danger. IT WORKS THE SAME IN ANY COUNTRY."

... or for any zealous movement's efforts to force agreement; in this case that the rich are supposedly a force of evil and harm to the well being of "Us Socialists."

Actually, and as they know very well, the source of our economic crises is not "Big Bonuses," but is instead "Big Government" and their efforts to force banks into accepting low-cost-home-loans that were encouraged by Carter and enforced by Clinton's order to Janet Reno and Attorney's General distraint with non-compliance.

Both Bush presidents warned of the danger to our 'free' market if this socialistic program was continued ... and the warnings have been ignored by socialists and continued negligence in congressional financing of low-cost-housing (Fannie/Freddy). Now, the socialistic efforts are revealed as stark failures ... and the socialists try and blame anyone else but their communistic utopian idealistic tripe ...

Socialism, whether democratic, theocratic, autocratic, et al, have failed. None of these experiments in economics have succeeded in history and have been attempted more times than can be counted in mankind's past - from "let's hate the evil war chief" all the way to "let's hate the evil rich who provide the USA with the highest standard of living in all the world and throughout all of history."

That's the "sense" of socialists yearning for utopian communism ... hate those who make your "stuff" available, and punish them for your car, your domicile, your digital lifestyle ...

Follow the socialist goosesteppers who hate the rich and rightwingers ....

Say, visitor, old pal.....who let you out, and shouldn't you be getting back before you miss the next round of meds?

Incomprehensible diatribe based on absolutely nothing said in the original post. But it's good to know that there are still stalwart patriots like yourself. Especially when you bring to the table such a cute dog and such a strong little pony.

I'd go into more detail, but I have to go punish some hated rich and rightwingers for my car, my domicile, my digital lifestyle.

ps.

Is a digital lifestyle anything like a digital watch? If I have a digital lifestyle, do I have sex with computers? Digital televisions?

Visitor, was it Carter's & Clinton's fault that banks such as Countrywide engaged in reckless lending practices? Offering loans with no required proof of income or ability to afford such a loan.

Wasn't it really greed, the greed of banks, that led us to our current economic situation? Looking for ways to make shareholders happy(yes, by making them richer) by showing a great profit for the quarter, is what led banks astray. The notion, we sell a lot of loans to people who can't afford them. Then we bundle & sell the loans to Company X for what seems like a fair price, then when the loan goes into default, we are left unscathed. And so it went. And mortgages, particularly when bundled, have always been a safe investment.One may default, but certainly not 30%. Surprise!

This isn't looking to "erect a strawman" to blame for our economic situation, this is what happened.

Lee says, "... Incomprehensible diatribe based on absolutely nothing said in the original post."

In his original post, Lee maunders, "Nothing gets a concerted anti-regulation propaganda effort going as quickly and widely as the hint of a possibility of a chance that the public is thinking of reining in the rich and the powerful."

It just got worse from there, and now you pretend that there is no justification for a dose of anti-socialist retort? You aren't actually all that smart, after all, what?

Lee continues his ad hominem, "... But it's good to know that there are still stalwart patriots like yourself. Especially when you bring to the table such a cute dog and such a strong little pony."

Too funny! You equate my capitalistic supporting comments as being "patriotic," and so where does that leave your communistic wannabe efforts? Are you actually placing yourself in the position of being an anti-"patriot," then, smarty?

Lee waves hands in a mystical pass, "... I'd go into more detail, but I have to go punish some hated rich and rightwingers for my car, my domicile, my digital lifestyle."

Unreal! As with your previous effort to align yourself with anti-patriotism, you continue by trying to mock the truth and thereby demonstrating just how correct my assessments have been!

Then, of course, you must demonstrate how "incomprehensible" you just happen to be and where the projection originates"

"ps. Is a digital lifestyle anything like a digital watch? If I have a digital lifestyle, do I have sex with computers? Digital televisions?"

What a genius you must be, in your own mind!?!

Visitor asks, "... was it Carter's (and) Clinton's fault that banks such as Countrywide engaged in reckless lending practices? Offering loans with no required proof of income or ability to afford such a loan."

It is easy to search and find rightwing/Republican/conservative disagreement with Carters "Community Reinvestment Act," but you won't read them so you can continue to pretend that you don't know anything about it, except: Republicans/rightwing/conservatives did it ...

"Wasn't it really greed, the greed of banks, that led us to our current economic situation?"

Is this the neo-Victorian, moralistic, up-on-your-high-horse, quasi-religious crap which will replace Western moral dictates ...?

Meanwhile, Obama goes on a weekend vacation in a jet, and the Democrat leadership flies home on their private jets, leased by taxpayer's ... that's the neo-Hypocrites for you, isn't it?

"Looking for ways to make shareholders happy(yes, by making them richer) by showing a great profit for the quarter, is what led banks astray."

That is a near lie! You know very well that lax regulation and oversite caused the housing crises! At each of Bush's elections, he has spoken out against the danger of lax regulation and oversite ... while Franks and Dodd pooh-poohed any concerns about Freddy and Fannie! They actively encouraged banks to provide housing starts to minorities at low cost ...

The fantastical reality is, that those who consider themselves Democrats won't even do an internet search on the reality to discover the facts ... and even with the links provided ... and they will continue to bleat their ignorance as dupes of the socialist propagandists.

The Goerring quote, above, is always used to defame any patriotic support of our nation and its rule of law under our constitution (Individual (not collective) liberty), and just recently to revile our nation's efforts to free Afghanistan and Iraq. The socialist's "enemy" is a "capitalist" and therefore it is the "evil rich" and their "corporate stooges" who must be raised as a strawman to hate and march to war against. Dupes of these leftists: Democrats, repeat the effort to raise a prejudicial collective against capitalism ("the rich.") Indeed, they even ignore that incorporation is collectivism, but on a level of incentive, and not some grubbing/begging effort to make everyone else pay for your mortgage or economic failure ...

WAKE UP! It is Democrats in control of the budget and have been so in charge for the last two years! They are 2 years into being responsible for NOT addressing CRA immediately on their taking control! They are 2 years responsible for GIVING THE BANKS YOU HATE THE UNCONTROLLED TRILLION!

Now the Democrats have spent another near TRILLION on pork ...!!!

Now, the Democrats are spending another 100 MILLION on mortgage bailout ...!!!

... AND NOW DISCUSSING ANOTER TRILLION !!!

3 Trillion in less than 3 years and you whining leftist creeps have been whining about Bush's TRILLION!!!???!!!

Who is it of average intelligence who can't see Socialists for what they are ... the very "evil" they try and make the "rich" out to be!!!???

"This isn't looking to "erect a strawman" to blame for our economic situation, this is what happened."

Here is another link for your edification. I'm positive, though, that you aren't a dupe of leftists/Democrats but are rather one of the stooges of neo-communism. You won't educate yourself - that would ruin your faith ... CRA

taungmaa:

I see you missed your meds after all.

Nighty night. Enjoy the light show in your skull cavity.

Ah, a TADOWE by any other name....

would sling insults just as irrationally.

The self-contained absurdity of the first "visitor" and then of "tongmaa" sounded so familiar. Shades of TADOWE and the endless disingenuous attempts to vent bile disguised as communication.

Could taungmaa be TADOWE in disguise? Is Watching the Watchers' respite from the mad mole at an end?

Holy alias, Batman, check out this series of posts first from TADOWE then, once TADOWE is warned by the moderator, by taungmaa.

Interesting choice or words ... edification rather than education. I suspect that was a Freudian slip.

Regarding the source of information which you posted in your previous challenge to all Neo-commies & stooges . . the must be mindless masses that disagree with your position. You posted a link for CRA education @ investors.com. An editorial!

I just assumed you weren't regurgitating some right-wing rhetoric. My mistake.

If you'd like to learn more about the true origin, intent, & scope of the CRA, try this link CRA or just Google it and see what you can learn.

Previous link dropped -CRA-

James misdirects, "Interesting choice or words ... edification rather than education. I suspect that was a Freudian slip."

Neither of them apply, and since you continue to avoid the detail presented in both journalistic links I provided. Instead, you make yourself no different, however more sly in response, than Lee's efforts to dehumanize; rather than discuss anything except me, personally.

"I just assumed you weren't regurgitating some right-wing rhetoric. My mistake."

You equate me with the "messenger" I provided for your attention, or whatever euphemism you care to apply, perjoratively. Very good! That response certainly qualifies you for the classification: Sophomore.

"If you'd like to learn more about the true origin, intent, & scope of the CRA, try this link CRA or just Google it and see what you can learn."

More propagandistic misdirection proving that you are just another shallow intellect. This "speech" in no way contradicts that FANNIE/FREDDIE, under government supervision cooked-the-books to claim that inflated property evaluations (offered "free" by the banks supervised by Congress) were real assets.

When Republicans/rightwing warned of the dangers involved ... Congress called testimoney like this to obfuscate their repsonsibilities in lax supervision (hidden in supposed "regulation") and the imminency of the crises.

To justify it, they misdirect the "good" that the Act has done since 1970's ...

They avoid that Democrat controlled congress enforced banks to accept the low cost loans and ALLOWED the banks to claim the inflated property assessments as "real" value. The misdirection is in trying to deny one aspect of the CRA debacle as not being "responsible," while the Leftwing continues to try and blame the undefined "bete noire" for the crises; e.g., the "rich," greedy capitalists, "evil" corporations ... and any other target for hate and revulsion the party-uber-alles creeps can find to point at ...

Me for example ... go ahead and put your leftish vote in, why not?

Communists, socialist, right wingers, fundamentalists, yadda, yadda. What a crock it all is. On the right, it's the corporate fascists controlling all the means of production, using nationalism, war, religion to get it done. On the other end there are the socialists, caring not a whit about war or religion, using the greed of the corporate fascists, the war dead and a bad economy caused by greed of corporate fascists, to gain control of the means of production.

So which is worse? Fascism says we work toward world domination so the corporate cabel can make slaves of all workers. The socialists say we all contribute to our welfare through taxes. Either way, the worker is screwed.

All the power is in the hands of the people, but unfortunately, the majority of the people are too scared about their own futures to take their future in hand and do something. And both fascists and socialists know this.

So why are so many of you so worried about political philosophies that are nothing more than different approaches to domination by the rich and powerful?

Wake up and take matters into your own hands, otherwise, just stand and take whatever they dish out to you.

Regardless of what Rush and his ilk say, we are far, far away from any kind of socialism. But we have been living in a corporate fascist state for the past eight years.And you who think that asking someone to take a mental/emotional test in order to own a firearm should sit on a jury trying a man for putting seven hollow cap bullets into his wife and shooting her boyfriend in the head while his children watched. Maybe then you would have second thoughts on the issue. On the other hand, maybe your wouldn't. You would probably say she must have somehow deserved it.

Amy dismisses, "Communists, socialist, right wingers, fundamentalists, yadda, yadda. What a crock it all is."

You belittle left and right, supposedly. Then, turn around and misrepresent "corporate interests" as being "on the right," when half of such "interests" are philosophically on the left; as well. Otherwise the Kennedy billions, the Gore billions, Feinstein's husband's billions, et al, ad nauseam are the perfect example of capitalistic oligarchy controlling the USA. When Eisenhower warned of the "Military/Industrial" complex, he was doing so from the right and discussing the control that the Congress had in concert with the war-machine created during WWII. The Democrats were in-charge of the billions spent on the instruments of war - while they ignored the citizen soldier to pay for it.

WWII was a Democrat's war. Korea was a Democrat's war. Vietnam was a Democrat's war. During those efforts of the left to manipulate the US economy, it was demanded that "patriotism" be observed in support of Democrat led wars ... not the right. Only when a Republican conducts a war is it just fine and even "patriotic" to belittle and dismiss its success for political votes, to count the dead to frighten the population, to join with foreign elements to agree that the USA is conducting itself criminally. At those time, even when the war becomes theirs and they conduct it in the same way, the slavish minions of the left come out and spout:

Amy gushes leftist tripe, "On the right, it's the corporate fascists controlling all the means of production, using nationalism, war, religion to get it done. On the other end there are the socialists, caring not a whit about war or religion, using the greed of the corporate fascists, the war dead and a bad economy caused by greed of corporate fascists, to gain control of the means of production."

What logic!?!

Amy concludes, "Regardless of what Rush and his ilk say, we are far, far away from any kind of socialism."

1. Fascism is a form of socialism; at least the two nations infamous for practicing it were socialistic economies.

2. Socialism began on a grand scale when the 16th Amendment was supposedly ratified, and became a flood when the government, against Constitutional restrictions, started withholding taxes from worker's paychecks, and demanding (using distraint/barrel-of-a-gun) that private records be revealed to government.

That "socialism" has continued from the "New Deal," through Johnson's "Great Society," up to Carter's CRA, and finally Clinton's enforcement of low-income-loans on federally insured banking. Now, you try and pooh-pooh Obama's efforts to nationalize medical care and reinforce low/no-downpayment housing ...

You mustbe an unknowing socialist and not much resembling a capitalist ... you apparently haven't got a good grasp on either term's real meaning ... you interchange them with others, willy-nilly.

I suggest you start by realizing that "fascism," as practiced by the NAZI and the Italians, was a socialist economic system ... not capitalist ...

Dear James, Amy, and any other reader not under psychiatric care:

Please be advised that taungmaa, a.k.a. TADOWE, has zero...I repeat, zero...interest in discussing anything, communicating in any way, or any other reasonable activity that you may be imagining.

If you have been reading Watching the Watchers for a long time, you know that he has, in the guise of TADOWE, frequently appeared here, and on many, many other web sites, all with the goal of preventing and avoiding the very communication in which you would like to engage.

He wants to disrupt, to insult, and, in his own unusual mind, display how smart he thinks he is. Hence the cloying characterizations he presents: "James misdirects"; "Amy dismisses." As God named the animals, so TADOWE/tongmaa doth name you and your actions. The light bursteth forth.

Ignore him. I trust it drives him crazier.

"Oh the crackling of the bright and sparkling light,

that erupted and erupted in Tadowe's eternal night."

"Ah the light show flashing far behind his very eyes,

as he misperceived the universe, especially truth and lies."

Or as I said a while back:

TADOWE, TADOWE,

It's off to work he goes,

With an insult here

and no logic there,

TADOWE, TADOWE, TADOWE.