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29 March 2008 On the Road from Samaria When they manipulated the stock market, I remained silent; I was making money and felt superior to the crowd. When they silenced their critics, I remained silent; I was self-righteous and felt they got what they deserved. When they came for the blue... More
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  • Robber-baron audacity
    Wall Street greed continues to boggle the mind

    By Dan K. Thomasson
    Tuesday, August 4, 2009

    The sense of outrage that permeated nearly every announcement of obscene compensation for Wall Street’s profligate managers and traders a year ago seems to have faded with the public’s anticipation that the worst of the economic crisis is over.

    How else can one explain Congress leaving town for a month without taking action to stop federal bailout recipients from returning to their thrilling days of yesteryear? The nation’s legislators obviously haven’t received all those “cards and letters” from angry constituents demanding justice.

    Could it be that the hue and cry over healthcare reform has drowned out everything else? The chances are the folks at home — if that is where most lawmakers are headed and not on some useless junket disguised as a vital “fact-finding” experience — will let them know one way or another.

    Meanwhile, it seems quite clear that the latest bonus figures are enough to give the average taxpayer and besieged homeowner apoplexy, particularly since executives and players from the biggest recipients of public aid are among the most rewarded, according to a report from New York Attorney General Andrew Cuomo.

    Nine of the financial firms that were the largest recipients of the bailout funds paid their bankers and traders more than $1 million apiece in 2008.

    According to the report, about 5,000 people accounted for more than $5 billion in bonuses. Cuomo said that at Goldman Sachs, which received $10 billion in federal TARP help — since repaid, just 200 people got almost $1 billion and at Morgan Stanley $557 million went to just over 101 people.

    Citigroup, which lost $27.7 billion in 2008 and received $45 billion from taxpayers, had $5.3 billion set aside for bonuses it handed out to738 of its 322,600 employees.

    Does this blow your mind? Well here is the total for the nine banks.

    The bonus pool, the report states, was $32.6 billion despite losses of $81 billion.

    The New York Times noted that at Morgan Stanley compensation was more than seven times as large as the bank’s profit while during the 2004 and 2005 years when the stock market was doing well, the compensation was only two times profits. Morgan Stanley also was loaned $10 billion by the federal government and has repaid it.

    Cuomo seems to have this strange idea that as in every other business, bonuses and compensation packages should ebb and flow with profits. If the business did well, the bonuses would be higher. Certainly that was the case with most of us who were longtime employees of major companies.

    But somehow that doesn’t hold true on Wall Street where individual performance is what counts in handing out the dough, even though the overall bottom line, which obviously was impacted by employee ingenuity and dedication, was miserable.

    In the annals of robber-baron audacity, this comes close to being an all-time record, no matter how much hokum comes from the approving boards about justification, including hard-working, productive people who might be lost to other institutions who would value them for themselves. Baloney!

    Also while considering this nonsense, we should keep in mind that, at the same time, banks like the Bank of America and Citigroup are offering minuscule deposit interest to small investors who are actually losing money on the deal when inflation and taxes are figured in.

    Well, at least all those Depression-era gangsters who seem to fascinate us so much used firearms when they robbed us and had the decency not to insult us by offering some lame, patronizing excuse for what they had done. Actually, John Dillinger and cohorts were known even to say thank you once in a while.

    There seems little doubt that Congress will come up with some form of restriction on executive compensation from among the many proposals already being pushed. Certainly, President Barack Obama needs to object strenuously if he can tear himself away from traveling and healthcare.

    — Dan K. Thomasson is former editor of the Scripps Howard News Service. His e-mail address is thomassondan@aol.com.

    Aug 15 3:16 AM | Link | 1 Comment
  • How do you fight the system?
    How do you fight the system?8-15-2009

    Right now, in the world today there is only one choice for an economic system. That’s corporatist capitalism. By it’s very nature it is set up to funnel public funds into private hands in order that the rich elite becomes ever richer. What it does to the rest of us is leave us out of the equation except as gaping mouths to be fed an ever increasing mass of stuff.

    Unfortunately as the rich get richer the poor and middle class tend to get poorer. The numbers of people falling below the poverty line is steadily increasing thanks to the Friedmanite Chicago school of economics that has held sway in the world for 30 years (for an excellent analysis of this paradigm shift see The Shock Doctrine by Naomi Klein). The IMF and World Bank, as well as the good ole US of A, have made certain that countries with any kind of social programs, populist regulatory systems or infrastructure improvement projects, are forced to gut these programs and infrastructure, sometimes at gunpoint. Why do they do this? To make sure that the robber barons of multinational corporations are allowed to ride into town unhindered by even the semblance of a sheriff to keep things civil.

    From the democratically elected president of Iran in the 50s to the democratically elected presidents of Chile, Argentina, Brazil, Indonesia (I could go on) in the 60s and 70s, the corporatists have made sure that no democracy would stand as long as it worked for its own people and not for big business. Only through dictatorship and oppression could the draconian economic measures of the IMF and World Bank have been stuffed down the throats of the third world in order to line the pockets of rich elites.

    Unfortunately this is the system we now have throughout the world. Where social programs, decent infrastructure, good education and public goods (such as low cost utilities, access to clean water, and free airwaves) are a thing of the past. The system is so ubiquitous that it’s almost impossible to opt out of it.

    How do you fight the powers that be when they practically control our very thought patterns? You can’t go to the store to buy a piece of clothing or a vegetable without running smack into the corporate machine.

    One must ask, what would hurt the multinationals the most? What can the average human being do to refuse to be a part of the corporatist agenda? How do we opt out of the slave wage/slave consumer paradigm that we are allotted by those who would rob us blind and make us obedient little batteries to power the machine? How do we refuse to believe that “War is Peace.” and not buy into the Big Brother mentality?

    The one area that the big corporations are weak is in the area of profits. If profits don’t keep climbing they lose. They can create another war, they can create another disaster in order to suck the economic life out of the shell-shocked citizens. But what if we refuse to be duped? What if we opt out of their consumer/consumption paradigm? What if we no longer buy their stuff? What if we grow our own food or buy our food from local people who grow it? What if we don’t buy lots of cheap, poorly made clothing from Walmart and instead buy it from second hand shops or garage sales? Without consumers all that stuff sits on the shelves. Without consumers, profits would suffer. Even if only 10% of the people stopped buying all the corporate made garbage that is thrown our way it would hit the corporations where it hurts.

    And what if we refused to be slave labor, working for an hourly wage, most of us without decent benefits, no hope of any decent retirement (401Ks don’t count; as we have seen they can be wiped out in a heartbeat) and certainly not receiving the massive bonuses of the CEOs and the shareholders. CEOs don’t make things that can be sold to bring in the profits. And certainly shareholders don’t either.

    So if we opt out of the slave market of corporate labor, what do we do instead? Create a local economy, supported by other local economists. At first it wouldn’t be easy because people aren’t used to buying local. They’re used to going to the big box stores to get lots of cheap stuff. But what if you decide you don’t need lots of cheap stuff, but instead go for a small amount or moderate amount of locally produced, well made stuff that will last 5 to 10 years longer than anything produced in China? Decide what you would like to do with your life if you didn’t have to go to that boring 9 to 5 slave’s job every day, Monday through Friday. Then figure out how to make a living at it. Sure it would probably be a lot more work. But it would be work that has true worth to you, to your community, to your family and eventually to the world.

    As for the corporate controlled government with their hands in our pockets, if you keep your income below a certain level you don’t have to pay taxes. And your money won’t be going to support the rich elite, illegal and unjust wars, torture, destruction of democratic governments, and arms dealers. “But,” you say, wringing your hands, “how can I possibly survive without making all that money? How can I have all the goodies and the brand new (gas guzzling) car and the 3000 square foot house with a pool and all the amenities?” For this, please read Radical Simplicity: Small footprints on a Finite Earth by Jim Merkel. It is possible, and in fact, it is necessary if we are not to end up in a Soylent Green world.

    Building communities of people opting out of the corporatist rat race would provide support for those choosing this lifestyle. A good example of the type of community possible can be seen in many Amish communities in the U.S (not all, mind you. Some have fallen prey to the need for a paycheck.). These communities have their own banks that are supported by customers in the community through good financial responsibility. They buy and sell goods among themselves, without need of inputs from the corporate world. It is a much simpler, slower and less harmful way of life. I’m not saying you have to do without electricity or drive a horse-drawn carriage. But producing your own power through wind, water or solar or a combination of all three would certainly reduce your ecological footprint as well as remove the need for corporate controlled energy (re: Enron and the theft of billions of taxpayer dollars through market manipulation).

    I’m not saying that completely cutting off all commerce that involves corporations would be easy. You might opt to make your own clothing but where does the cloth come from? If you have a local cloth mill where does the fiber come from? If you have your own cotton fields, hemp fields (the more sustainable choice), or sheep herds, where do the machines come from (used machinery? I’m sure in this country with the outsourcing to China and other low cost producers there must be used machines that could be obtained)? It is a daunting task to reinvent an entire civilization. How on earth do you replace the corporate made computers? Perhaps by supporting locally produced ones, if that’s even possible?

    So we start with baby steps. We start buying our clothing second hand. We sell that 3000 sqft house and buy a piece of land where we can grow our own food, raise our own livestock, quit the 9 to 5 slavery, do what you’ve always dreamed of doing for a living. As long as you don’t want to be one of the wealthy elite leaching off the rest of society and others’ hard work. I find that most people simply want to be comfortable and happy, safe and relaxed. They don’t need to make millions for that. And if the thought of growing your own food is simply too much, support other local growers. A local economy currency or straight up barter could be instituted. Communities across the world have done this already. Wouldn’t be terribly difficult to duplicate in most areas. These steps have the benefits of cutting the corporate umbilical and letting the national government know that we aren’t going to pay for their wars and destruction any more. And it grows community. “It takes a whole village to raise a child.” would no longer be hollow words in the fragmented, hyper-individualistic, me first world we live in now.

    The only way to break the backs of the corporations that are most responsible for the destruction of our environment, the looting of our national wealth, the poisoning of our children and the violent expropriation of the commons is to hit them in the pocket book. Opt out of their all consuming program to take all the wealth they can steal from the poor and middle class to enrich the controlling elites. Don’t let them control us in true Orwellian fashion. Free yourself from the Matrix they have created for us. Refuse to be a battery.

    For a version of this blog entry with links to many sites verifying my facts go to www.hermitslamp.blogspot.com

    Aug 15 2:59 AM | Link | 1 Comment
  • Rising Income Inequality: Incredibly Good Deal for Super Rich

    File:Jpmorgan.jpg
     
    J. P. Morgan assaulting photographers (he hated being photographed due to facial disfigurement caused by the skin disease Rosacea, and had all of his official portraits retouched).


    (ChattaBox)— Professor Emmanuel Saez of the University of California, Berkeley, recently updated a study of wealth distribution in the United States, finding Income inequality at levels not seen since the Gilded Age of the late 19th century, during a time when disreputable robber barons gobbled up all of the wealth in the country on the backs of the working poor and child labor.

    The disparity in wealth distribution began in the 1990s, but increased dramatically during the Bush administration, with tax cuts for the rich. The study analyzes data through the year 2007. A few statistics stand out.

    In 2007, the top .01 percent of American earners took home 6 percent of total U.S. wages, a figure that has nearly doubled since 2000. Additionally, the top decile of American earners, raked in 49.7 percent of total wages, a level that’s “higher than any other year since 1917 and even surpasses 1928, the peak of stock market bubble in the ‘roaring” 1920s.’”

    “The top 1 percent of incomes captured half of the overall economic growth over the period 1993-2007,” wrote Saez. The policies of the Bush administration from 2002-2007 accelerated the slow growth of average incomes, while enabling the very rich to pull in a greater share of the country’s wealth.

    According to the study, “…the bottom 99 percent of incomes grew at a solid pace of 2.7 percent per year from 1993-2000, these incomes grew only 1.3 percent per year from 2002-2007. As a result, in the economic expansion of 2002-2007, the top 1 percent captured two thirds of income growth.”

    Saez notes that, the “…top incomes earners today are not “rentiers” deriving their incomes from past wealth but rather are “working rich,” such as the wealthy Wall Street traders and their multi-million dollar bonuses.







    Saez expects the wealth concentration at the very top to fall slightly for the years 2008-2009, but to rebound back to previous levels, unless policy changes are implemented.

    “Based on the US historical record, falls in income concentration due to recessions are temporary unless drastic policy changes, such as financial regulation or significantly more progressive taxation, are implemented and prevent income concentration from bouncing back, wrote Saez.


    Here is source and link to the full report:


    Income Inequality Is At An All-Time High: STUDY

    Income inequality in the United States is at an all-time high, surpassing even levels seen during the Great Depression, according to a recently updated paper by University of California, Berkeley Professor Emmanuel Saez. The paper, which covers data through 2007, points to a staggering, unprecedented disparity in American incomes. On his blog, Nobel prize-winning economist and New York Times columnist Paul Krugman called the numbers "truly amazing."

    Though income inequality has been growing for some time, the paper paints a stark, disturbing portrait of wealth distribution in America. Saez calculates that in 2007 the top .01 percent of American earners took home 6 percent of total U.S. wages, a figure that has nearly doubled since 2000.

    As of 2007, the top decile of American earners, Saez writes, pulled in 49.7 percent of total wages, a level that's "higher than any other year since 1917 and even surpasses 1928, the peak of stock market bubble in the 'roaring" 1920s.'"

    Beginning in the economic expansion of the early 1990s, Saez argues, the economy began to favor the top tiers American earners, but much of the country missed was left behind. "The top 1 percent incomes captured half of the overall economic growth over the period 1993-2007," Saes writes.

    Despite a rising stock market, largely growing employment and a historic housing boom things were not nearly so rosy for the rest of U.S. workers. This trend, according to Saez, only accelerated during the George W. Bush's tenure as President:

    "...while the bottom 99 percent of incomes grew at a solid pace of 2.7 percent per year from 1993-2000, these incomes grew only 1.3 percent per year from 2002-2007. As a result, in the economic expansion of 2002-2007, the top 1 percent captured two thirds of income growth."

    READ the entire paper:
    http://www.huffingtonpost.com/2009/08/14/income-inequality-is-at-a_n_259516.html

     

    Aug 15 2:45 AM | Link | Comment!
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