Anyone who owned a home during the last ten years remembers one thing very well: The avalanche of junk mail assaulting us with spectacular offers to take advantage of rising home equity. If nothing else, these crooks should be contributing cash to support landfills and recycling systems, not to mention planting a few billion trees!
From The Downturn, Looking Up!
In the 1920’s during the boom leading to the bust that became The Great Depression, the Secretary of the Treasury was a 75-year-old financier named Andrew Mellon. Mellon believed in the edicts of Calvin Coolidge, that “the business of America is business” and also believed, as did Coolidge and his successor knucklehead Herbert Hoover, that the government’s only justification for existence was to serve big business. So naturally when Mellon got his hands on the Treasury, and believing, as Reagan and Bush II many decades later, that taxes on the high-income brackets was bad for (their) businesses, Secretary Mellon, who couldn’t change tax law all by himself, simply refunded wealthy people their tax money. In his first eight years at Treasury, he refunded $3.5 billion. Millions went to companies he owned, and the rest to other wealthy Republicans. He was especially generous to those contributing $10,000 each (in Depression Era dollars!) to Republican candidates.
I was thinking of old Andrew Mellon the other day as I read a front-page New York Times piece declaring that ten big bank holding companies, among them American Express, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and yes, Bank of New York Mellon, have returned a combined $68.3 billion of the government’s bailout. “That represents more than a quarter of the federal bailout money that the nation’s banks have received since last October”, said the Times. The Times went on to lament that “After banks return the TARP money, the administration will forfeit much of its leverage over them. With that loss goes a rare opportunity to overhaul the industry.”The bankers, of course, are running from the strings attached regulations that came with the TARP bailout, chief among them the limits on executive compensation for their top 25 compensated workers. (Sounds like 250 really pissed off millionaires to me! MSNBC should profile ten a day, put their pictures and names up where we can see them so that these assholes become household names.) The article pointed out that although taxpayers actually profit from the return in the form of up to a few billions of dollars in interest and earnings on the money, we, of course, lose, because:
a) The banks were supposed to use the money to make LOANS to keep the economy afloat not just cover their gambling debts, and
b) Giving back the money before the economy has stabilized may mean they could end up right back at the government’s back door with their hands out and pockets empty. What then?
Some Food For Thought:
Sink the TARP Return Into Public Transportation!
1. Since the TARP program began in the final days of the Bush II Administration, is it safe to conclude that bankers simply scammed an outgoing administration full of gullible free-market Liberty College grads? JP Morgan says, “Our Company did not need the capital.” They needed it alright, but since they only care about getting and staying wealthy, the ten biggies traded the TARP money back and forth among themselves – instead of loaning it to American businesses – to make their balance sheets soar in order to justify another, perhaps one last, round of bonus payouts. These people are criminals, thieves, and liars. I look forward to their trials being covered every day, gavel to gavel on CNN, O.J. Style, for the next couple of years. BTW How about putting that $70 billion (68 plus interest) of returned TARP $ into public transportation? I have a feeling we’re going to need it!
What’s Good For America (should be) Good For GM!
2. While we’re on the economy, why, I wonder, is there all this prudish, puritanical hand-wringing about bailing out our auto industries? Personally, I think there ought to be a government supported loan program for what one might call, “vital industries.” Lots of other countries do it as a common sense measure to keep their economies strong and growing rather than allowing vital industries to calcify and become stagnant. My only gripe is that the government should have stepped in years ago, perhaps as far back as the late 1970’s, when GM’s answer to the small car boom after the first OPEC embargo was to roll out the biggest gas-guzzlers they had ever made! The Germans and Japanese have been trying to teach GM, Ford, and Chrysler how to sell cars to Americans for decades. The American Auto Industry bitched and moaned all through the 1970s and ’80s, as they forfeited market share to foreign competition rather than retool, that The Marshall Plan after WWII bought these competing countries all new factories thus giving them an unfair advantage. Jesse Jackson answered the challenge by suggesting we needed a New Marshall Plan for American business and labor here at home. Too bad nobody listened. BTW, remember when GM’s chairman said, “What’s good for GM is good for America?” Well, it’s about time someone shouted back, “What’s good for America ought to be good for GM!”
Let’s Put A Rush Order In For Alternative Industries!
3. The tragic loss of jobs in so many sectors is horrific for sure. But on the other hand, there’s nothing Corporate America loves more than firing Americans from their jobs. Elsewhere on this site, I’m calling for economists to weigh-in on the idea that we should simply stop exporting jobs to countries that do not allow unions or collective bargaining. What do you think? The current worry about this nascent recovery we’re in is that it’s not creating new jobs. Perhaps it’s time for Obama to hit the accelerator on his Alt Industries for Tomorrow program today!
It’s All Reagan’s Fault!
4. What we actually have here is Reagan’s Service Economy finally imploding. And good riddance! Are we really going to miss the corporate chains that have disappeared? Can you name more than three? The fact of the matter is that every one of those big corporate chains (Circuit City, Borders, Linens-N-Things, Rite Aid, Foot Locker, etc.) originally put out of business thousands upon thousands of genuine entrepreneurial businesses that used to serve their communities’ needs very well, many of which had been in place for generations. Everything from local bookstores to electronics shops, to clothing, household goods, pharmacies, shoe stores, restaurants, coffee shops, and grocery stores have all been ploughed under by American Corporate giantism. Maybe once the corporate economy collapses we can have our community shops and the services they rendered locally, back. And while we’re at it, how about bringing back neighborhood bars too!
5. Question: Should AIG be broken up into a thousand pieces?
6. And WTF is a financial warrant? I know, I know, it’s like a futures in stocks instead of soy beans, and as bad and ruinous an idea as a carbon credit (don’t get me started) and just another bit of hocus pocus from your unfriendly neighborhood Kakistocracy!