Wednesday, December 16, 2009

Toadying to the Rich Caused Obama to Drop the Ball

Either the realities are more complex than I realize, or the people in charge of the government and big business are there because of nepotism and not merit. At the time that it was happening I railed against the idea of giving the banks money, no strings attached but hoping they would start lending again. Hundreds of billions of taxpayer dollars (well, new debt actually) given at 0% interest to the banks, the same banks that are charging most credit card holders near 30% interest. Or perhaps it is the American people who are the stupid ones to put up with this criminal behaviour.

I think the government should have skipped the middle man entirely. The government should have opened up loan offices, charging somewhere around 5% interest. People would flock to pay such low interest, and the big banks would have to lower their rates or lose business. Clearly none of these banks were in any serious danger of going out of business if they are all declaring record profits a year later. Those that do and will fail probably should fail.

So what we have is hundreds of billions of dollars lent to the banks at 0%, which they then refused to lend to people. My solution would have made the taxpayers 5%, opened up credit, and forced the big banks to also lower their rates (or lose business). It seems pretty simple to me, but of course the biggest difference in the two scenarios is WHO benefits. In the current system the big banks got free money to do what they wanted with, to be paid back at some point in the uncertain future, and the American people got deeper in debt as a nation (12 million is the current tally...imagine how much those interest payments are, and how they could be better spent on THE PEOPLE). In my scenario the American people make money and liquidity opens up.

Obama is part of the problem, because he is a much better talker than a doer. He compromises too much and too soon. He telegraphs how the opposition can manipulate his priorities until there is only a muddied mess. But a bigger problem than Obama is clearly the Senate. The very nature of the Senate is conservative in nature. It takes 60% to get legislation passed. That is a very conservative requirement. On top of that the nature of the Senate is disproportionate, so that smaller states have a greater say than their population would warrant. An analysis of the smaller states in the Union shows that they are, generally speaking, conservative in nature.

My conclusion is that progressives have no place in the United States. The system is designed to slow down all efforts at change to the point where the system in place is generations behind where the people are at. Personally, I'd scrap the system, but I am Canadian so it is not my place to do so.

Friday, December 4, 2009

Big Bonuses for "The Best"

One of the many ridiculous things that the American people are supposed to swallow these days is that, if the likes of Goldman-Sachs and the other financial terrorists that have helped destroy the middle class are not paid huge bonuses (enough to finance entire communities), then the "best and brightest" will go elsewhere and the recovery will not happen. This is STUPID on so many levels it is difficult to know just where to start.

One, these losers are the ones that screwed the pooch to begin with. They over-leveraged their companies (it is hard to call them banks anymore, that is just one element of what they do) in order to make greater short-term profits. As a result the odds finally fell against them, as they would over time, and the house of cards is crashing down. How are these people the best and brightest? They clearly know how to play the system, and the nation along with it, but best and brightest? Hardly the best, and I do not even believe they are particularly bright. Excellent at the limited facet of humanity that they have chosen to corrupt, absolutely! Brilliant? Perhaps some, but only a few of the many I have personally met. Frat boy seems a more appropriate term for the majority of them.

Two, where are these best and brightest going to go? People who want to restrict the huge bonuses (not the least of which, the investors, from whose pocket these bonuses come) are not saying that a single investment company should be regulated, but that all of them should. So where are they going to run to? Do they think that foreign companies really want to hire them? These losers are to finance what Arthur Anderson came to represent in accounting...failure. A relative handful of people orchestrated this economic meltdown, and now they expect to be enriched to help fix the mess that they caused. I think they should be held accountable, and forced to work for minmum wage until the economy is back on track. You want big bucks for good work, then except crap money for the shoddy work you have been turning out.

Three, what makes anyone believe that these losers are even capable of fixing the problems? They weren't bright enough to prevent this from happening, and they were the ones closest to the levers of control. They had to have seen this coming long before the majority, or at least they should have, but they seemed just as surprised as many people. Harvard University, the people who produce the "finest business minds in the country" lost BILLIONS of dollars in the past year. I think these people are wresting on laurels earned generations ago. These people do NOT know what they are least I pray that they do not. If they do, then this entire economic meltdown was planned. That sounds like a conspiracy theory, and it is probably nothing more than that. But the options are A) these people do not know what they are doing, or B) they do, and this was their goal, or at least a step towards their goal, all along.

Which answer makes you more comfortable?