Archive for Saturday, March 17, 2012

Eating cake

March 17, 2012


To the editor:

World War I lasted from August 1914 to November 1918. Tens of millions died; 50 miles of utter desolation stretched from Switzerland to the Channel. The wealth of entire nations had been swallowed.

France, a victor, by 1918 was bankrupt, having borrowed heavily from the United States and Britain. It wanted those debts paid by Germany as war reparations. But Germany could not pay both for reparations and for the American wheat it needed to prevent starvation. So the French demanded that if German money went to pay for wheat, then France’s debt to Britain and the United States should be forgiven.

But the upper classes of France were not bankrupt; in fact, the war had made them richer. French politics, however, got in the way. France was not willing to tax itself to pay its debt. In 1919, at the Versailles Peace Conference Winston Churchill was led to comment: “France was going bankrupt as a nation, but the French were growing wealthy as individuals.”

Today a Goldman Sachs vice president, the head of the company’s “United States equity derivative business in Europe, the Middle East and Africa” resigned, calling the firm “morally bankrupt.” The company responded saying despite his auspicious title the man was really a nobody, lower on the pecking order than at least 12,000 other Goldman employees, and knows not what he says. As proof, Fox News quoted Goldman sources saying the man: “never made more than $750,000 a year.”

So quoth another aristocrat: “Let them eat cake.”


Ken Lassman 5 years ago

Thanks for giving us a piece of history, so that, well, do we have the guts to not allow it to repeat itself? Another book comes to mind that instructs us about societies who ignore the writing on the wall: Jared Diamond's "Collapse."

Richard Heckler 5 years ago

13 Bankers: The Wall Street Takeover and the Next Financial Meltdown

13 Bankers describes the rise of concentrated financial power and the threat it poses to our economic well-being. Over the past three decades, a handful of banks became spectacularly large and profitable and used their power and prestige to reshape the political landscape. By the late 1990s, the conventional wisdom in Washington was that what was good for Wall Street was good for America. This ideology of finance produced the excessive risk-taking of the past decade, creating an enormous bubble and ultimately leading to a devastating financial crisis and recession.

More remarkable, the responses of both the Bush and Obama administrations to the crisis–bailing out the megabanks on generous terms, without securing any meaningful reform–demonstrate the lasting political power of Wall Street. The largest banks have become more powerful and more emphatically “too big to fail,” with no incentive to change their behavior in the future. This only sets the stage for another financial crisis, another government bailout, and another increase in our national debt.

The alternative is to confront the power of Wall Street head on, which means breaking up the big banks and imposing hard limits on bank size so they can’t reassemble themselves. The good news is that America has fought this battle before in different forms, from Thomas Jefferson’s (unsuccessful) campaign against the First Bank of the United States to the trust-busting of Teddy Roosevelt and the banking regulations of the 1930s enacted under Franklin Delano Roosevelt. 13 Bankers explains why we face this latest showdown with the financial sector, and what is at stake for America.

Simon Johnson and James Kwak provide the best explanation yet for how the smart guys on Wall Street led us to the brink of collapse. In the process, they demystify our financial system, stripping it down to expose the ruthless power grab that lies at its center. If you want to understand how Wall Street captured Washington and how it tenaciously hangs on to that power, read 13 Bankers.

Elizabeth Warren, Professor of Law at Harvard Law School and
Chairwoman of the TARP Congressional Oversight Panel

just_another_bozo_on_this_bus 5 years ago

So, does this mean that you think that Republican candidates should also be criticized for taking Wall Street money?

just_another_bozo_on_this_bus 5 years ago

"Sure why not. "

Why not? That was my question to you-- because you only ever criticize Obama (and Democrats in general) for their crony capitalism, but never the GOP, who are the clear leaders in that department.

Crazy_Larry 5 years ago

Both parties are bought and paid for, you know that. Remember the Golden Rule?

tomatogrower 5 years ago

Many examples can be given throughout history of the disaster that happens when a nation's wealth gets concentrated into just a few hands. That's what made communism so attractive to people. It's what makes people follow dictators.

If this guy was a low paid employee of GS, then that is pretty sad. How many workers could you hire for $750,000? His job could have been done by 7 other workers who would be getting what many would consider a nice, livable wage. 7 workers working together would get a lot more done, be a lot more accountable, because they would probably have at least 1 person who would blow the whistle if things weren't kosher. They also would be a lot less stressed, because they were sharing the work. You would have 7 financially sound middle class people, instead of 1 rich guy. And of course, since he is the lowest paid - wow! Think of the middle class jobs that GS could create! But no, it's more fun to be greedy and not share the wealth in a way that wealth should be shared - with jobs and decent, not obscene wages. Even though right now, the 1% have convinced many people to pity them, history has shown that people eventually wake up.

imastinker 5 years ago

If you think that any 7 people can do the job of one good manager and decision maker you're sorely misinformed. Skills are easily taught, but ideas, work ethic, common sense, etc are not so easily taught.

You're criticizing the wrong people here. We have a failed education system that only serves the employees that work there. This mans education came from somewhere else, probably his parents.

just_another_bozo_on_this_bus 5 years ago

Except that the "good ideas" emanating from Wall Street over the last 30 years or so are little more than Ponzi schemes. I guess that bit of common sense can't be so easily taught, either.

imastinker 5 years ago

Is this your idea of a criticism of my ideas? Did you expect me to disagree with what you said? Did you think I am trying to defend the "Wall Street Culture?"

Get over yourself! Either address what I said or go hump somebody else's leg.

just_another_bozo_on_this_bus 5 years ago

You replied to a post that was specifically about Wall Street banksters, imbuing them with all kinds of superpowers that are "not easily taught."

Sorry, dude, your post was idiotic, and insulting me won't make it otherwise.

imastinker 5 years ago

Do you think that a group of people could more effectively do the job of President than one enlightened, charismatic leader can? What would it be worth to have a person in Washington that has those qualities?

I've read your posts and you seem to think the president has superpowers. The principles are the same between the two jobs. Great leaders and managers aren't very common. I certianly don't agree with his politics, but he is a very inspirational speaker and quite good at leading the people that elected him.

So tell me - do you think so little of his abilities to claim that any group of people could adequately do his job, make tough decisions, lead people? I think not.

camper 5 years ago

I have found the opposite to be true (in the corporate world atleast). I have seen a lot of poor managers who make poor decisions in part because they really do not understand the "nuts and bolts" of the operation.

The best mangagers are the ones that work their way up from lower levels to manager/decision making positions......slowly. This way they know the micro and macro impacts of decision making before they are placed in that position. Unfortunately, this culture in US business is becoming rare.

imastinker 5 years ago

You're making my point here. There are lots of bad managers out there, and the good ones are quite rare. Those people that can make good informed decisions are worth their weight in gold. Companies that want to retain them need to do what it takes to do so or accept the consequences. I do believe that seven bad managers are an order of magnitude more dangerous (and expensive) than one good one!

Think about it yourself - would you rather place a manager in charge of a 100 million operation who makes bad decisions 1% of the time and makes $750k or a guy who makes bad decisons 2% of the time and makes a fraction of that? 2% is still pretty darn good by anybody's standard, but the amount of money is quite large and so are the consequences.

camper 5 years ago

I agree BAA, except perhaps for the union part. Outside managers are often brought into companies who know little about the business and tend to re-invent the wheel with oft disastrous consequences. Once they do their damage, they move on to the next company and cause further harm. I am extremely skeptical for this reason, and perhaps a bit resentful, because a lot of these bad managers were extremely high paid and it would have been better had they not even come into the office.

tomatogrower 5 years ago

There are a whole lot of people out there who are creative, decision makers who could use a job. No one is irreplaceable. But the Wall Street types have their own little club, and they want to make you believe that we can't live without them. Get rid of the MBA's. They all are programmed to think the same, never out of the box.

parrothead8 5 years ago

Education serves the people. The people demand to be taught certain skills, and that's what they receive. They refuse to remember that what made this country great was having a well-educated populace, not a well-skilled populace. If we would tell our kids to learn everything they can instead of telling them to "go to school to get a good job," we'd all be better off.

We used to be a country of problem-solvers. We're becoming a country of people who are all very good at one or two things.

Crazy_Larry 5 years ago

Money is free speech. The voice of the rich is literally more valuable than 'normal' folks. The golden rule: those with the gold make the rules. We the People are debt slaves. Oh look! Snookie got married! Pass me a beer.

'The real menace of our Republic is the invisible government, which like a giant octopus sprawls its slimy legs over our cities, states and nation. To depart from mere generalizations, let me say that at the head of this octopus are the Rockefeller-Standard Oil interests and a small group of powerful banking houses generally referred to as the international bankers. The little coterie of powerful international bankers virtually run the United States government for their own selfish purposes.

‘They practically control both parties, write political platforms, make catspaws of party leaders, use the leading men of private organizations, and resort to every device to place in nomination for high public office only such candidates as will be amenable to the dictates of corrupt big business.

‘These international bankers and Rockefeller-Standard Oil interests control the majority of the newspapers and magazines in this country. They use the columns of these papers to club into submission or drive out of office public officials who refuse to do the bidding of the powerful corrupt cliques which compose the invisible government. It operates under cover of a self-created screen seizes our executive officers, legislative bodies, schools, courts, newspapers and every agency created for the public protection.'  -mayor of New York (1922)

George Lippencott 5 years ago

Hiding from reality are we? The little people vote. There are far more or them than the rich. Why are we unable to make a difference? Could it be that both parties pay heed to their rich donors? The Republicans are at least honest about it. The Democrats talk a good line but when they had total control of the government Mrs. P was unable to hold her caucus to that task. Was it all Bush who bailed out Wall Street or are there dirty hands among the Democrats?

We will never get change unless we can break the strangle hold of the two parties. It is a shame that most of the dialogue on here favor one over the other without any real perspective as to how that will accomplish the desired results given that did not work last time. How long does it take to adjust what needs to be adjusted? Is two years not enough to make a good down payment? We got the AFCA but little else. Maybe because that is exactly what the leaders of the Democrats wanted – they were in charge!

We got a program that will siphon money from the upper half of the middle class and move it to the lower half. The rich skated – once again. If you want change we must move away from the two major parties and demand new players and focus.

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