RIRedinPA's Open Salon Blog

You, me and the bourgeoisie

Thu, 15 Oct 2009 08:10:58 -0400

An article today in the WSJ says Wall Street investment banks are on track to give out record bonuses this year...

Major U.S. banks and securities firms are on pace to pay their employees about $140 billion this year — a record high that shows compensation is rebounding despite regulatory scrutiny of Wall Street's pay culture.

    ....Total compensation and benefits at the publicly traded firms analyzed by the Journal are on track to increase 20% from last year's $117 billion — and to top 2007's $130 billion payout. This year, employees at the companies will earn an estimated $143,400 on average, up almost $2,000 from 2007 levels...

...Goldman also says employees have long had a stake in its long-term results because many are compensated in part with shares they can't touch for several years. Average compensation per employee is on pace to reach about $743,000 this year, double last year's $364,000 and up 12% from about $622,000 in 2007, according to the Journal analysis.

This is just head scratching stuff to me. Are we not less than one year out from barely plunging into the worst economic crisis the world has seen, primarily because of the malfeasance of most of these corporations, an economic meltdown that was only avoided through bailing them out with a trillions of dollars of our tax money? And so they use that money to reestablish themselves in less than 12 months and can now give out record compensation to their employees? Look, I've got no problem with excessive bonuses by corporate America, top athletes make ridiculous amounts of money but only because they bring in much more for their franchises, the cast of Seinfeld made what, $1M an episode at their peak but hey, they were bringing in 10-20-30 times that amount in ad revenue, same with some investment guru who brings in beaucoup bucks for his bank.

What irks me here is that we were told that AIG, Goldman, BoA etc. etc. were too big to fail, that as distasteful as it was the government needed to prop them up with trillions of dollars to save not just the nation but the world, which means through proxy we propped them up with trillions of dollars. And that lending wasn't even at a penalty rate or anything, give me a trillion bucks at 0% interest and even I, idiot that I am, could do something that would warrant a $23B bonus. As someone pointed out on a blog in the comments:

This is the question: Would theses $23B in GS bonuses exist to be paid if:

    1) No TARP;
    2) No bailout of AIG counterparties;
    3) No influential GS lobby in Congress;
    4) No gifting of hundreds of billions by governments to TBTF’s;
    5) No obscene influence and conflict ridden relationships b/w GS and the Executive branch (Treasury);
    6) Future risks of the bonus worthy performance had to be taken into account????

If the answer is that these $23 B in GS bonuses would exist even without the above, then I agree we shouldn’t be mad at the bonuses. But I doubt it.

All this while the rest of us are being shackled with the worst recession since World War II? Wall Street is zooming but on what? Housings still is in the shitter, unemployment is going to pass 10%, retail will announce or just announced another dismal quarter and predictions are for a bad Christmas buying season, the auto industry went back in the toilet after the Cash for Clunkers money ran out, what is WS seeing that's a silver lining here? [Aside: I did have a great quarter on my 401k...I actually am back to the level I was at this time last year, which shocked me. Of course I invested over that year so I basically threaded water but I'll take that over drowning...anyway]

My take is that either the crisis was not as bad as we were spoon fed, that some of these banks could have toppled and we would have been ok (and some might still - how's it feel to be a Bank of America share holder right now) or Wall Street, with its gambling addiction, is already mouth to teat on the next bubble scam. Blech, this actually gives me less of a secure feeling than when everything fell off the cliff last October. Either we just got used in the biggest Ponzi scam ever or the same idiots on Wall Street and in Congress are driving us back over the same cliff. I'm thinking I should pull all my money out and stick it in muni bonds and be happy with 1/2-1% over inflation.

Anyone have an explanation for this?

Hookers, murder and thieving...

Fri, 18 Sep 2009 08:09:11 -0400

So both the Senate and the House voted on legislation yesteday or rather amendments to legislation that would block ACORN from receiving Federal funding because a couple of ACORN employees got caught in a sting giving advice to a faux pimp on how to set up a hooker ring tax free.

I've got little symphathy for ACORN as to me they've always come across as a shady organization working in the subterreanean grey zone where they claim to be community organizers but seem more as a front to make some money. Probably started out as a good idea which went bad.

I've got less sympathy for a Congress that'll waste time fighting over the little argument of the day or the latest 24-hour news cycle meaningless issue over the bigger picture stuff, like health care reform or something like, I don't know, a war.

And there is the thing of perception. ACORN, in the last fifteen years or so, has received $54 million dollar in Federal funds, mostly to help with the census and low income housing. This somehow makes them the bogeyman of the right. However, another Federal contractor, Blackwater Worldwide, the firm that provided security for a variety of purposes in Iraq received as of 2007, $1B in Federal no bid contracts. Even after it was accused of killing 17 Iraqi citizens it remained a no bid contract reciepient of the Bush administration.

Now Blackwater is known as Xe, their founder is under investigation for murdering American citizens who were working with Federal invesigators looking into charges that Blackwater was smuggling weapons into Iraq.

Despite all this Xe received an extension on an aeronautics contract in Iraq for $20M, is contracted to train Afghan soldiers, continues to have a presence in Iraq, provides training (domestically) to the US military and law enforcement and is actively bidding on other government contracts.

Why is ACORN blacklisted for having low level employees doing something stupid and illegal but Blackwater remains on the government roles when their top executives were involved in murder? As Woodward and Bernstein were once told, follow the money, right?

And of course there is our friends over at AIG, Goldman Sachs, Bank of America, Lehman Brothers and so on. Through their corporate malfeasance, greed and down right thievery they pushed this nation to the brink of economic ruin. I'm not talking about the collapse of Wall Street here, we're talking the end of capitalism. Their actions forced the tax payers of this country to shell out over 1.4 trillion dollars to balance the ship, they drove millions of Americans into unemployment, ate up trillions in retirement and pensions savings and have set this economy back so that it will be a decade before we really recover.

How were they handled. They were given two separate sweetheart bailout packages from two separate administrations. Part of which they wanted to use to pay out bonuses to their top executives. Where's the Congressional outrage? Has one executive from any failed insurance or banking institution done a perp walk for their actions? Not that I know of. Hell, most of them weren't even fired.

Should ACORN suffer for the actions of their low level employees? Sure, but the punishment should fit the crime, this wasn't a top down effort to tell pimps how to set up businesses, it was a gotcha type sting of some probably untrained and unintelligent employees set up by the GOP to begin with. Meanwhile, the crimes of both the Wall Street investment firms and Blackwater were top down approved, the culture of those firms was to bilk the government and American people for everything they could, breaking whatever laws they had to to do it.

So tell me, of the three cases outlined above, where should the quick and decivsive action of the legislative branch come down upon?

And the stupidity continues...

Sat, 29 Aug 2009 08:08:41 -0400

“I’ll be danged if I am going to give up my Social Security because of socialism."

http://www.rollcall.com/news/38015-1.html

LeRoy Schaffer, a St. Francis city council member, at a Representative Michelle Bachmann town hall meeting.

I'm not expecting everyone to realize that government funded through tax payer money welfare programs such as social security, medicare and medicaid is actually a form of socialism lite but I would expect a city council member, someone part of local government to know the difference. I don't think that's a high bar to be setting for being allowed to make deicisions as to the quality of life for and spending of taxes from his fellow citizens.

Terrorism as a endless campaign tool...

Fri, 21 Aug 2009 08:08:18 -0400

Tom Ridge, in his soon-to-be released book claims that he was pressured to raise the terror threat alert weeks before the 2004 elections. Prior to the election there were video tapes released by bin Laden and Azzam the American (Adam Gadahn) making unspecificed threats against the US and US interest. Ridge is quoted:

“There was absolutely no support for that position within our department. None,” he writes. “I wondered, ‘Is this about security or politics?’

The book is not out so there's not much else to go on. Hopefully there's more to it than just that as that seems incredibly weak. And not that I want to give the Bushies a free pass, they used terrorism and politics as a two way street to get what they wanted. When the need fit them they used the threat of terrorism canard to improve their political standing and when the intelligence or facts on the ground did not jive with their personal beliefs they used their political strength to pressure for cherry picked reports and analysis which fit their world view.

It was a descpicable game to play with American security, one which has probably set back our intelligence agencies and international diplomacy back by a decade.

So I do find Ridge's allegations believable but the proof has to be more than a "I wondered..." comment.

[Addendum] It appears he does go into more detail in the book, claiming it was Rumsfeld and Ashcroft who put the pressure on him. To Ridge's credit he left the administration a month after the elections and did speak out against the terror alert system in 2005. But why wait five years to let this be known? Why do people give themselves up to loyalty to any institution to the point of when that institution behaves illegally or unethically they somehow cannot find their moral compass?

Gallup Healthy Behavior Poll

Wed, 19 Aug 2009 08:08:50 -0400

Gallup as released it's state of the states poll, here and it shows that the further you move from the center and Southern portions of the country the healthier a life style people live on average.

The chart below shows political affiliations throughout the country, the darker the green the more conservative the state.

And finally, per capita income, the lighter the green, the lower the income.

And a couple of broad paint brush assumptions. A more conservative leaning person is going to be opposed to health care reform, someone with lower income is going to be in higher need of health care reform since they can't afford insurance and potentially (due to their low income) work in a position that doesn't offer them health care benefits.

So if you look at the three charts there is a huge swath in the South which leads the nation in unhealthy life styles, are conservative and on the lower tier of per capita income.

So, in a completely unscientific way I am going to tie these three together and once again be wowed by the GOPs ability to influence its members to vote against their own economic and well being interests. Clearly poor people with unhealthy lifestyles would benefit the most from health care reform and yet, it would seem these very same people are the ones most against it.

Feel free to disagree just be polite about it.