Posted inUncategorized

Breaking the greed compact

We had to struggle with the old enemies of peace: business and financial
monopoly, speculation, reckless banking, class antagonism,
sectionalism, war profiteering. They had begun to consider the Government of the United States as a
mere appendage to their own affairs. We know now that Government by
organized money is just as dangerous as Government by organized mob.

Sound familiar? Those were Franklin Roosevelt's famous speech in 1936, where he also said, "Never before in all our history have these forces been so united
against one candidate as they stand today. They are unanimous in their
hate for me, and I welcome their hatred." In reality, FDR always had to backtrack to keep from antagonizing capital too much. On the other hand, he led a nation in the 1930s that was on the verge of repudiating capitalism for what then seemed viable alternatives of fascism or communism.

Early 21st century America is reveling in easy populist anger over bonuses paid out to the very AIG executives who did so much to collapse the economy. But I wonder if they have Roosevelt's understanding of these "old enemies of peace"? And what will they do about it? If things really change, it will be because Wall Street did something far worse than break the social compact. It broke the greed compact.

5
Posted inPolitics: National

Will AIG be Obama’s Bay of Pigs?

The scandal over $165 million in retention bonuses paid to AIG executives goes beyond the rhetoric of cheap populism — including among Republicans who steadfastly deregulated the financial sector, defended outrageous executive compensation and thought the Greenspan-driven housing-derivatives bubble was just dandy. I know this much: It is the biggest test yet for President Obama. Will it be his Bay of Pigs?

The bonuses are being paid out to "retain" executives at the Financial Products Unit at AIG that nearly brought the world economy to collapse — leading the U.S. government to pump in so much taxpayer money to rescue AIG that we own 80 percent of it. These executives who created the house of cards of credit-default swaps are now government employees, for all intents and purposes. If only our teachers were paid so well. And "retain"? The teenagers working in the AIG mail room would be more prudent than these Masters of the Universe. But the government claims it has little ability to stop the payments. Contracts must be honored, don't you know.

4