What I wanted to post today was pretty much the story Margaret Carlson wrote for Bloomberg. So here’s an excerpt. The outrage so far has been limited, but as the recession deepens, you can bet the anger will grow. This is not a Happy New Year story.
Paulson’s giveaway of billions for the banks is
supposed to be used to ease the credit crisis, not saved to buy weaker banks, or pay dividends and bonuses. A recent report by the bipartisan Government Accountability Office concluded there is a “heightened risk that the interests of the government and taxpayers may not be adequately protected and that the program objectives may not be
achieved.”
Sorry, Can’t Say
The Associated Press tried to do what Paulson hasn’t, asking 21 banks how much they’ve spent and on what, how much is being held in reserve and what their plan is for the rest. The folks responsible for the mess, in possession of billions of our dollars, were too arrogant to say.JPMorgan Chase & Co. said of its $25 billion haul: “We’ve lent some of it. We’ve not lent some of it,” AP reported. Now get lost.
Bank of New York Mellon Corp. spokesman Kevin Heine told AP, “We’re choosing not to disclose that.” Wendy Walker of Comerica Inc., after refusing to share any details, said, “We’re not sharing any other details. We’re just not at this time.”
What time would be better, Ms. Walker? Never. I bet never is good for you.
Financial superstars got used to talking this way when they were lionized as American royalty. Sprawling oceanfront estates the size of hotels, private 737s outfitted like palaces weren’t marks of wretched excess but totems of swashbuckling capitalist derring-do. Charity auctions where moguls outbid each other for a 1982 Lafite Rothschild were chronicled not as one more occasion to flaunt their surplus millions but characteristic acts of pure generosity.
Moving Money
This happened even as almost no one knew what these geniuses were doing. They weren’t making anything like a railroad you could see. They were moving money from one place to another, keeping some for themselves as it changed hands.Try to follow the trajectory of a mortgage on a house in Cleveland into a bundled credit default swap of collateralized debt. Few could, yet paydays of $30 million and bonuses of twice that were based on it. Therein lay its charm.
Just as now, no one was asking pesky questions. Regulators under President George W. Bush didn’t much regulate on the theory that bankers were truly Masters of the Universe and too rich to steal. Congress wasn’t on the case, too busy begging these same executives for alms known as campaign contributions.
Thanks to an economic meltdown, we now know the decade’s financial superstars walked off with money they didn’t earn in a scheme more sophisticated but no less damnable than a punk in a ski mask holding up a convenience store.
No Heads Rolling
You would think heads would roll, some into jail. I’m not just talking about Bernard Madoff. I’m talking about the titans of commerce.They still walk the streets, when in truth schemes should be named after them. Ponzi just doesn’t do justice to what they pulled off.
Instead, these same folks got more money, as if bringing the greatest financial system in the world to its knees deserved a reward. It’s the ultimate in trickle-down economics: If the bankers are OK, we’ll all be OK.
Where’s the money gone? Some of it paid for a trip to England for a partridge hunt, some to retention bonuses, but we don’t really know. I’d like to hang the Treasury secretary atop the Christmas tree and pelt him with tinsel until he tells us. Oops, I forgot. He doesn’t know and wouldn’t want to pry.
Where’s the Outrage?
But why isn’t anyone screaming about giving these miscreants more money? Who’s in charge here? Surely, there is someone left with a conscience, and a pulse, in the White House, someone in Congress who can call a hearing and rough up these bankers at least as much as they did the auto industry.
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