Best wishes to you and yours...love and light...Alex
Saturday, December 24, 2011
Cross-posted From Matt Taibi / TAIBBLOG / ROLLING STONE. Original article here.
It seems America’s bankers are tired of all the abuse. They’ve decided to speak out.
True, they’re doing it from behind the ropeline, in front of friendly crowds at industry conferences and country clubs, meaning they don’t have to look the rest of America in the eye when they call us all imbeciles and complain that they shouldn’t have to apologize for being so successful.
But while they haven’t yet deigned to talk to protesting America face to face, they are willing to scribble out some complaints on notes and send them downstairs on silver trays. Courtesy of a remarkable story by Max Abelson at Bloomberg, we now get to hear some of those choice comments.
Home Depot co-founder Bernard Marcus, for instance, is not worried about OWS:
“Who gives a crap about some imbecile?” Marcus said. “Are you kidding me?”
Former New York gurbernatorial candidate Tom Golisano, the billionaire owner of the billing firm Paychex, offered his wisdom while his half-his-age tennis champion girlfriend hung on his arm:
“If I hear a politician use the term ‘paying your fair share’ one more time, I’m going to vomit,” said Golisano, who turned 70 last month, celebrating the birthday with girlfriend Monica Seles, the former tennis star who won nine Grand Slam singles titles.
Then there’s Leon Cooperman, the former chief of Goldman Sachs’s money-management unit, who said he was urged to speak out by his fellow golfers. His message was a version of Wall Street’s increasingly popular If-you-people-want-a-job, then-you’ll-shut-the-fuck-up rhetorical line:
Cooperman, 68, said in an interview that he can’t walk through the dining room of St. Andrews Country Club in Boca Raton, Florida, without being thanked for speaking up. At least four people expressed their gratitude on Dec. 5 while he was eating an egg-white omelet, he said.
“You’ll get more out of me,” the billionaire said, “if you treat me with respect.”
Finally, there is this from Blackstone CEO Steven Schwartzman:
Asked if he were willing to pay more taxes in a Nov. 30 interview with Bloomberg Television, Blackstone Group LP CEO Stephen Schwarzman spoke about lower-income U.S. families who pay no income tax.
“You have to have skin in the game,” said Schwarzman, 64. “I’m not saying how much people should do. But we should all be part of the system.”
There are obviously a great many things that one could say about this remarkable collection of quotes. One could even, if one wanted, simply savor them alone, without commentary, like lumps of fresh caviar, or raw oysters.
But out of Abelson’s collection of doleful woe-is-us complaints from the offended rich, the one that deserves the most attention is Schwarzman’s line about lower-income folks lacking “skin in the game.” This incredible statement gets right to the heart of why these people suck.
Why? It's not because Schwarzman is factually wrong about lower-income people having no “skin in the game,” ignoring the fact that everyone pays sales taxes, and most everyone pays payroll taxes, and of course there are property taxes for even the lowliest subprime mortgage holders, and so on.
It’s not even because Schwarzman probably himself pays close to zero in income tax – as a private equity chief, he doesn’t pay income tax but tax on carried interest, which carries a maximum 15% tax rate, half the rate of a New York City firefighter.
The real issue has to do with the context of Schwarzman’s quote. The Blackstone billionaire, remember, is one of the more uniquely abhorrent, self-congratulating jerks in the entire world – a man who famously symbolized the excesses of the crisis era when, just as the rest of America was heading into a recession, he threw himself a $5 million birthday party, featuring private performances by Rod Stewart and Patti Labelle, to celebrate an IPO that made him $677 million in a matter of days (within a year, incidentally, the investors who bought that stock would lose three-fourths of their investments).
So that IPO birthday boy is now standing up and insisting, with a straight face, that America’s problem is that compared to taxpaying billionaires like himself, poor people are not invested enough in our society’s future. Apparently, we’d all be in much better shape if the poor were as motivated as Steven Schwarzman is to make America a better place.
But it seems to me that if you’re broke enough that you’re not paying any income tax, you’ve got nothing but skin in the game. You've got it all riding on how well America works.
You can’t afford private security: you need to depend on the police. You can’t afford private health care: Medicare is all you have. You get arrested, you’re not hiring Davis, Polk to get you out of jail: you rely on a public defender to negotiate a court system you'd better pray deals with everyone from the same deck. And you can’t hire landscapers to manicure your lawn and trim your trees: you need the garbage man to come on time and you need the city to patch the potholes in your street.
And in the bigger picture, of course, you need the state and the private sector both to be functioning well enough to provide you with regular work, and a safe place to raise your children, and clean water and clean air.
The entire ethos of modern Wall Street, on the other hand, is complete indifference to all of these matters. The very rich on today’s Wall Street are now so rich that they buy their own social infrastructure. They hire private security, they live on gated mansions on islands and other tax havens, and most notably, they buy their own justice and their own government.
An ordinary person who has a problem that needs fixing puts a letter in the mail to his congressman and sends it to stand in a line in some DC mailroom with thousands of others, waiting for a response.
But citizens of the stateless archipelago where people like Schwarzman live spend millions a year lobbying and donating to political campaigns so that they can jump the line. They don’t need to make sure the government is fulfilling its customer-service obligations, because they buy special access to the government, and get the special service and the metaphorical comped bottle of VIP-room Cristal afforded to select customers.
Want to lower the capital reserve requirements for investment banks? Then-Goldman CEO Hank Paulson takes a meeting with SEC chief Bill Donaldson, and gets it done. Want to kill an attempt to erase the carried interest tax break? Guys like Schwarzman, and Apollo’s Leon Black, and Carlyle’s David Rubenstein, they just show up in Washington at Max Baucus’s doorstep, and they get it killed.
Some of these people take that VIP-room idea a step further. J.P. Morgan Chase CEO Jamie Dimon – the man the New York Times once called “Obama’s favorite banker” – had an excellent method of guaranteeing that the Federal Reserve system’s doors would always be open to him. What he did was, he served as the Chairman of the Board of the New York Fed.
And in 2008, in that moonlighting capacity, he orchestrated a deal in which the Fed provided $29 billion in assistance to help his own bank, Chase, buy up the teetering investment firm Bear Stearns. You read that right: Jamie Dimon helped give himself a bailout. Who needs to worry about good government, when you are the government?
Dimon, incidentally, is another one of those bankers who’s complaining now about the unfair criticism. “Acting like everyone who’s been successful is bad and because you’re rich you’re bad, I don’t understand it,” he recently said, at an investor’s conference.
Hmm. Is Dimon right? Do people hate him just because he’s rich and successful? That really would be unfair. Maybe we should ask the people of Jefferson County, Alabama, what they think.
That particular locality is now in bankruptcy proceedings primarily because Dimon’s bank, Chase, used middlemen to bribe local officials – literally bribe, with cash and watches and new suits – to sign on to a series of onerous interest-rate swap deals that vastly expanded the county’s debt burden.
Essentially, Jamie Dimon handed Birmingham, Alabama a Chase credit card and then bribed its local officials to run up a gigantic balance, leaving future residents and those residents’ children with the bill. As a result, the citizens of Jefferson County will now be making payments to Chase until the end of time.
Do you think Jamie Dimon would have done that deal if he lived in Jefferson County? Put it this way: if he was trying to support two kids on $30,000 a year, and lived in a Birmingham neighborhood full of people in the same boat, would he sign off on a deal that jacked up everyone’s sewer bills 400% for the next thirty years?
Doubtful. But then again, people like Jamie Dimon aren’t really citizens of any country. They live in their own gated archipelago, and the rest of the world is a dumping ground.
Just look at how Chase behaved in Greece, for example.
Having seen how well interest-rate swaps worked for Jefferson County, Alabama, Chase “helped” Greece mask its debt problem for years by selling a similar series of swaps to the Greek government. The bank then turned around and worked with banks like Goldman, Sachs to create a thing called the iTraxx SovX Western Europe index, which allowed investors to bet against Greek debt.
In other words, Chase knowingly larded up the nation of Greece with a crippling future debt burden, then turned around and helped the world bet against Greek debt.
Does a citizen of Greece do that deal? Forget that: does a human being do that deal?
Operations like the Greek swap/short index maneuver were easy money for banks like Goldman and Chase – hell, it’s a no-lose play, like cutting a car’s brake lines and then betting on the driver to crash – but they helped create the monstrous European debt problem that this very minute is threatening to send the entire world economy into collapse, which would result in who knows what horrors. At minimum, millions might lose their jobs and benefits and homes. Millions more will be ruined financially.
But why should Chase and Goldman care what happens to those people? Do they have any skin in that game?
Of course not. We’re talking about banks that not only didn’t warn the citizens of Greece about their future debt disaster, they actively traded on that information, to make money for themselves.
People like Dimon, and Schwarzman, and John Paulson, and all of the rest of them who think the “imbeciles” on the streets are simply full of reasonless class anger, they don’t get it. Nobody hates them for being successful. And not that this needs repeating, but nobody even minds that they are rich.
What makes people furious is that they have stopped being citizens.
Most of us 99-percenters couldn’t even let our dogs leave a dump on the sidewalk without feeling ashamed before our neighbors. It's called having a conscience: even though there are plenty of things most of us could get away with doing, we just don’t do them, because, well, we live here. Most of us wouldn’t take a million dollars to swindle the local school system, or put our next door neighbors out on the street with a robosigned foreclosure, or steal the life’s savings of some old pensioner down the block by selling him a bunch of worthless securities.
But our Too-Big-To-Fail banks unhesitatingly take billions in bailout money and then turn right around and finance the export of jobs to new locations in China and India. They defraud the pension funds of state workers into buying billions of their crap mortgage assets. They take zero-interest loans from the state and then lend that same money back to us at interest. Or, like Chase, they bribe the politicians serving countries and states and cities and even school boards to take on crippling debt deals.
Nobody with real skin in the game, who had any kind of stake in our collective future, would do any of those things. Or, if a person did do those things, you’d at least expect him to have enough shame not to whine to a Bloomberg reporter when the rest of us complained about it.
But these people don’t have shame. What they have, in the place where most of us have shame, are extra sets of balls. Just listen to Cooperman, the former Goldman exec from that country club in Boca. According to Cooperman, the rich do contribute to society:
Capitalists “are not the scourge that they are too often made out to be” and the wealthy aren’t “a monolithic, selfish and unfeeling lot,” Cooperman wrote. They make products that “fill store shelves at Christmas…”
Unbelievable. Merry Christmas, bankers. And good luck getting that message out.
Friday, December 23, 2011
Here's a great article by Kai Wright/ColorLines - very well written - and it mirrors my views on the subject. This is something that is close to my heart and mind on nearly a daily basis as I watch our world devolve into something new and possibly highly unpleasant for large numbers of our fellow citizens. Hell, it already is highly unpleasant for large numbers of our fellow citizens.
I've been wanting to write a post like this for some time. Kai Wright has done it for me - more eloquently than I could have. Definitely more succinctly than I would have. Or could have. Besides, I'm on vacation - the first "real" one in a long, long time - me and sweetiepiehoneybunch and Diggeroo. So I'm taking the lazy way out and cross-posting his piece.
I've been saying this for years, that our heads are in the sand regarding the real truth, the whole truth and nothing but the truth. As long as we the people continue to ignore and refuse to acknowledge the truth about what is going on across the board and across the planet, we are collectively pissing in the wind. Meaning, we are pissing all over ourselves whilst "trying" (in our beluded state - belief and delusion at the same time) to "solve" "our" "problems" and "issues".
What greater gift could we give to ourselves, our children, their children, our fellow citizens on this planet, the entire planet itself - what greater gift could we give than to be brutally and unequivocally honest about the root causes of the challenges that face us?
What greater gift could we give to the world for our leaders to "man up" and lead with maturity, insight, thoughtfulness, awareness, open-mindedness, and love? To move the profit motive lower on the list. Much lower. Maybe even at the bottom of the list.
I wonder what that economy might look like...?
Without the basis of the fundamental truth as a starting point, we are deluding ourselves that long-term solutions to the issues that face us can be found.
Anyway, I could go on and on, so here's the article:
At the foot of Manhattan’s Broadway Ave., just below Wall Street, stands one of the city’s most reliable tourism draws: Arturo Di Modica’s 3.5-ton statue of a charging bull. Since 1989, the sculpture has been an iconic symbol of American wealth, of the aggressive capitalist spirit that, it is argued, made this country great and powerful. Visitors flock from around the world to rub the bull’s horns for good luck. Or they used to, at least. Now, tourists snap pictures from behind police barricades.
For more than two months, the raging bull of wealth has sat caged, facing eye-to-eye with a New York Police Department cruiser as cops have worked around the clock to protect it from the Occupy Wall Street movement. The park’s administrator called has the security “Orwellian.” That’s to say the least.
If you’re looking for visuals to encapsulate 2011, look no further than the bizarre scene at Di Modica’s bull. Daily, the country’s largest police force mobilizes to protect the idea of American prosperity from an imagined threat, while the actual economy lays gored and gutted by demonstrable and ongoing crimes.
In the immediate, this perversity results from a spectacular failure of political leadership. We traveled a long, winding road to the point at which no-brainers like a modest payroll tax cut and an extension of unemployment benefits demand political brinksmanship. People of varying ideologies and partisan affiliations may debate endlessly who’s more at fault, but to do so is to truly miss the forest for the trees. The ugly reality is no leader in either party has yet shown the mettle to rise and meet the enormity of today’s challenges.
That’s not to suggest moral equivalencies. Republican leaders have been openly obstructionist, preferring a broken economy to a successful Obama presidency. Their cynicism has rarely been as bald as this week’s House vote on the payroll tax cut, but they’ve never made much effort to conceal it.
Still, even if President Obama had been given a willing Congress, the solutions he has championed aren’t nearly on par with the problem. Like his congressional opponents, he insists the structural foundation of our economy remains strong. Rather than confront the core issues—inequity and instability—Obama has thrashed around with Republicans in the margins—over how to control debt, over the degree to which health care should be a commodity rather than a right, over which borrowers were the least irresponsible and thus deserving of help. Meanwhile, at each crucial juncture in his reform-branded presidency, Obama has left financial players to voluntarily take responsibility for their behavior. They remain steadfast in their refusal to do so.
These bipartisan leadership failures have prolonged the immediate crisis, which dates back to 2007, when the foreclosures that would bring down the system first began consuming working-class communities of color in particular. Four years later, Republicans and Democrats alike are still working off of the optimistic notion that we need only contain the immediate problem until we can get back to growth—that we need only protect the bull with barricades until those pesky protesters disappear and allow its charge to resume. With each year that our chosen leaders have indulged this fantasy, a cancer has spread. Each year has brought new records in the poverty, hunger and inequality that will ultimately consume this country.
But that’s just the immediate crisis. As we move into an election year, in which U.S. residents will have prolonged debate over our collective priorities and values, we must pursue answers to a broader question. Since at least 1981, when the Reagan revolution overtook public policy, we have built an economy on two related fictions. The first is that boundless growth is sustainable. The second is that unrestrained capitalism, particularly in the financial sector, will create wealth for everyone. These are discredited ideas, and the question of 2012 must be how we begin building a society based on something different.
This broader question is crucial because, in truth, the problem extends past the economy. Look around and you’ll find one broken institution after another, each of them buckling under the weight of the late 20th century consensus that greed is good, that a winner-takes-all individualism will somehow improve our collective endeavors. Industries, communities, natural resources, even sports leagues have collapsed as Ronald Reagan’s corrosive vision has become dominant.
Meanwhile, racism and racial injustice remain rooted in our society in no small part because they are necessary to explain why unrestrained capitalism and unfettered growth fail so spectacularly in creating widespread wealth. The entrenched, generational poverty that has gripped so many black communities and the yawning racial gaps that persist in wealth and income, among other things, can only be explained if they are blamed on the individuals hurt by them. Thus “welfare queens” and “super predator” youth and cheating “illegals” and “lazy Indians” and on and on. These caricatures continue to inform public policy on poverty, education, immigration and more. They continue to explain away inequity and provide villians against which struggling whites can define themselves without questioning the larger system. Martin Luther King, Jr.’s quote about slave owners—the original unrestrained capitalists—still rings true: “The Southern aristocracy took the world and gave the poor white man Jim Crow.”
Di Modica offered a quote on capitalism, too. In November, Newark’s Star-Ledger asked the artist what he thought about the security around his statue. He didn’t like it. “The bull is for the people,” he declared. “The bull is for everyone, the people with money and the people with no money.” If only it were so.
Wall Street’s bull markets have proven to be for the benefit of a very few. But as the financial industry’s largest players have been unleashed to pursue profit for themselves at all costs, the dreadful consequences have surely impacted everyone. Pensions have been wiped out. Family homes have been stripped of value, many taken away altogether. Small businesses have been locked out of credit markets. More than 14 million people are exiled from the labor force. A galling one in three black children and nearly as many Latino children are growing up in poverty right now, while the president brags about ferreting out fraud in the food stamp program rather than getting more money for it.
Our chosen political leaders have tolerated all of this in order to maintain the fiction that our economic system still works, that the organizing principles of our society remain valid. So the central question of 2012’s likely all-consuming political debate must be simple: How do we acknowledge that our current economy is built on lies and then start erecting a new one based on equity and sustainability?
Again, here is the original article by Kai Wright...