Under the vast majority of circumstances, my views regarding economic theory could be described as very much in agreement with Milton Freedman. I believe in limited government as the best method of propelling the economy forward. I believe in free trade, as when markets are trully free they do a better job of deterring aggression than any formal treaty ever will. I believe that protectionism always fails utterly, and usually harms the country that implements it in ways that cannot be foreseen at the front end when it is enacted.
Having said all that there are two areas in which my hackles get raised instantly, and I become an angry populist. And those two areas are Wall Street and Corporate Management. I despise both with a visceral hatred that burns with a white hot fervor. And the reasons are many for this, but they all boil down to the inverse relationship to reality that they both have. When something turns out to be good for the worker, better pay, better working conditions, better benefits, Wall Street always views that as a negative item. It seems that always when workers get a better share of the economic pie, that Wall Street sees that as a bad thing.
I despise this mentality and every manifestation of it. Wall Street doesn't see the ridiculous bonus structure for Corporate Management as a bad thing. They don't see the Board of Directors Golden Parachutes as a bad thing. They don't view the stunningly out of touch pay packages that top managers receive to be a bad thing. Wall Street analysts don't downgrade a stock offering from a company purely because the CEO is making a large mountain of cash regardless of how he or she performs. Wall Street typically reserves the downgrade for when the employees do better. When they get a better deal, Wall Street cautions people from buying the stock. As if buying the stock of a company that values its employees is a bad thing.
Wall Street rewards the companies that do poorly by their employees with better ratings on the stock and bond offerings. They tend to write nice things about these companies. Their analysis tends to be favorable when they are treating their employees like Scrooge treated his at the outset of A Christmas Carol. And honestly, its ridiculous. Honestly, it doesn't work for the long term betterment of our democracy. It artificially holds down wages, and keeps people in poverty that shouldn't be.
Truth be told, I wouldn't be so hard on Wall Street, if they were fair. If they downngraded a stock or bond offering equally as to the extravagance of the board room and top manager's total compensation package as when the average employee on the line of the company gets an additional $.10 an hour paid out over the next three years. If Wall Street would gauge the healthcare cost of the top echelon of a company on the same scale that they grade the employee healthcare packages, I would be pleased as punch.
The problem is that they can't do that. If they do that, then their hypocrisy would be evident for all to see. The traders that make tens of millions in bonuses, even when the company experiences a loss. The CEO's of banking firms that make massive bonuses even if their company ends up in bankruptcy. The company that pays the managers that lead them into the abyss of bankruptcy still get paid monster bonuses. All of these would be front and center for all to see. People would point and laugh. People would wonder why our nation has annointed these dolts to run the financial sector, when they can't manage their own houses any better than a crackhead on a bender.
Our nation's most recent meltdown had more to do with Wall Street's inability to properly manage and discipline it's own than anything that happened on Main Street. The sheer ignorance and wanton arrogance of the Wall Street loons has caused massive pain for everyone the world over.
And yet, where is the bill from our Congress to more closely scrutinize Wall Street? Where is the bill that would clean up the regulatory mess of this sector? Where is the bill that would prevent finanical firms from becoming too big to fail, or at least regulate firms that get into this category more closely? Where is the bill that criminalizes the perpetration of accounting fraud, that lowers the burden of proof in a prosecution of accounting fraud, and tightens accounting rules such that companies would no longer be allowed to keep tens of billions of debt off their balance sheets?
The recent meltdown cost average investors billions of dollars. And I am left wondering, where is their bailout? We sent hundreds of billions of dollars to huge financial firms that caused this mess, and what has it really gotten us? Unemployment is still in double digits, and job growth right now is nonexistent. The American taxpayer would have been better served if everyone had received a $5,000 stimulus check.
The end result would have been the same amount of public debt being pilled up, but it would have benefitted the people that make America work everyday. Our economy might have seen a few more financial firms fail, but on some level our economy could have absorbed it, especially if we all had that extra money in our hands. The banks that were sound would have survived, and it would have sent the right message to Wall Street. The message would have been, "Your role in our economy doesn't come with a government backed pry bar into the wallets of the American Treasury. When you take shockingly ridiculous risks you have to pay the price for those risks."
Having said all that there are two areas in which my hackles get raised instantly, and I become an angry populist. And those two areas are Wall Street and Corporate Management. I despise both with a visceral hatred that burns with a white hot fervor. And the reasons are many for this, but they all boil down to the inverse relationship to reality that they both have. When something turns out to be good for the worker, better pay, better working conditions, better benefits, Wall Street always views that as a negative item. It seems that always when workers get a better share of the economic pie, that Wall Street sees that as a bad thing.
I despise this mentality and every manifestation of it. Wall Street doesn't see the ridiculous bonus structure for Corporate Management as a bad thing. They don't see the Board of Directors Golden Parachutes as a bad thing. They don't view the stunningly out of touch pay packages that top managers receive to be a bad thing. Wall Street analysts don't downgrade a stock offering from a company purely because the CEO is making a large mountain of cash regardless of how he or she performs. Wall Street typically reserves the downgrade for when the employees do better. When they get a better deal, Wall Street cautions people from buying the stock. As if buying the stock of a company that values its employees is a bad thing.
Wall Street rewards the companies that do poorly by their employees with better ratings on the stock and bond offerings. They tend to write nice things about these companies. Their analysis tends to be favorable when they are treating their employees like Scrooge treated his at the outset of A Christmas Carol. And honestly, its ridiculous. Honestly, it doesn't work for the long term betterment of our democracy. It artificially holds down wages, and keeps people in poverty that shouldn't be.
Truth be told, I wouldn't be so hard on Wall Street, if they were fair. If they downngraded a stock or bond offering equally as to the extravagance of the board room and top manager's total compensation package as when the average employee on the line of the company gets an additional $.10 an hour paid out over the next three years. If Wall Street would gauge the healthcare cost of the top echelon of a company on the same scale that they grade the employee healthcare packages, I would be pleased as punch.
The problem is that they can't do that. If they do that, then their hypocrisy would be evident for all to see. The traders that make tens of millions in bonuses, even when the company experiences a loss. The CEO's of banking firms that make massive bonuses even if their company ends up in bankruptcy. The company that pays the managers that lead them into the abyss of bankruptcy still get paid monster bonuses. All of these would be front and center for all to see. People would point and laugh. People would wonder why our nation has annointed these dolts to run the financial sector, when they can't manage their own houses any better than a crackhead on a bender.
Our nation's most recent meltdown had more to do with Wall Street's inability to properly manage and discipline it's own than anything that happened on Main Street. The sheer ignorance and wanton arrogance of the Wall Street loons has caused massive pain for everyone the world over.
And yet, where is the bill from our Congress to more closely scrutinize Wall Street? Where is the bill that would clean up the regulatory mess of this sector? Where is the bill that would prevent finanical firms from becoming too big to fail, or at least regulate firms that get into this category more closely? Where is the bill that criminalizes the perpetration of accounting fraud, that lowers the burden of proof in a prosecution of accounting fraud, and tightens accounting rules such that companies would no longer be allowed to keep tens of billions of debt off their balance sheets?
The recent meltdown cost average investors billions of dollars. And I am left wondering, where is their bailout? We sent hundreds of billions of dollars to huge financial firms that caused this mess, and what has it really gotten us? Unemployment is still in double digits, and job growth right now is nonexistent. The American taxpayer would have been better served if everyone had received a $5,000 stimulus check.
The end result would have been the same amount of public debt being pilled up, but it would have benefitted the people that make America work everyday. Our economy might have seen a few more financial firms fail, but on some level our economy could have absorbed it, especially if we all had that extra money in our hands. The banks that were sound would have survived, and it would have sent the right message to Wall Street. The message would have been, "Your role in our economy doesn't come with a government backed pry bar into the wallets of the American Treasury. When you take shockingly ridiculous risks you have to pay the price for those risks."
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