Sucking up to Wall Street as Usual

Jamie Dimon, CEO of JP Morgan, testified before the Senate Banking Committee today about the more than $2 billion (and rising) the bank recently lost in risky hedges. Instead of being intensely questioned and sermonized on the need for regulation, Dimon

received a warm welcome from Republican lawmakers, suggesting that his status as Washington’s favorite banker remains intact. Some Republicans praised JPMorgan for navigating the financial crisis better than other Wall Street firms, and even sought Mr. Dimon’s advice on fixing the economy. ["JPMorgan's Chief Says Clawbacks 'Likely,'" in  The New York Times, 13 June 2012]

Senator Jim DeMint (R-SC) told Dimon that lawmakers "can hardly sit in judgment of your losing $2 billion."

Really? Well, what's the use of our lawmakers, huh?

Yep, just the person to trust.....if you're hoping for some Wall Street money for your political campaign. And, of course, the connections between JP Morgan and the Senate Banking Committee are very close and entangled; folks who work for our lawmakers on that committee become lobbyists for the financial institution. Kiss, kiss....

See Cora Currier's details of the revolving door in her article, "Charting the Cozy Connections between JP Morgan and the Senate Banking Committee," on ProPublica's website.

The Stupid, Stupid Scapegoating of Public Employees

So...evidently Mitt Romney has in this evening's debate of Republican presidential candidates claimed that he would "link pay of public employees to that of private-sector workers." However, as the writers at Think Progress point out, such a claim would actually require RAISING the pay of public employees. According to an article in the Washington Post, Saturday, November 5:

The federal government reported Friday that on average, its employees are underpaid by 26.3 percent compared with similar non-federal jobs, a 'pay gap' that increased by about 2 percentage points over last year while federal salary rates were frozen.

Got that, Mitt Romney, and all the other Republican talkingpoint-bots who like to scapegoat public employees? 

It's all just a diversion tactic--to get people to focus on what's NOT important and to forget what IS: the increasing income gap in this country, the over-weaning power of corporations, and unemployment.

Morning Reading, Morning Thoughts

My morning's reading:

• Ryan Lizza's "Leap of Faith," about "the transformation of Michele Bachmann from Tea Party insurgent and cable-news Pasionaria to serious Republican contender in the 2012 Presidential race," in The New Yorker. I found this article particularly interesting because, like Michele Bachmann, I was early influenced by evangelical Christianity; only for me, that influence was in a country Southern Baptist Church that my paternal grandmother helped establish. I also read Francis Schaeffer's works in search of an intellectual way to verify my beliefs, and for a time, the church in which I was a member focused on eschatology and most specifically on Hal Lindsey's The Late Great Planet Earth. So there is nothing in Michele Bachmann's far-right views that is unfamiliar to me. The difference is that I rejected those views. Brain-washing* is a peculiar thing: when you're under the influence, you don't realize that you are being manipulated--or if you suspect, as I did, you search for ways to justify your continued adherence to the views of your group while also fearing the rejection that will come when you leave the group. When you shake yourself free--not easily and not unassisted--you are appalled by your emotional and rational--and even moral--submission to views you now find untenable. Having been under the influence of far-right Christianity as a youth, I certainly don't want to experience being under that same influence as a citizen. While I find much to admire in the teachings of Jesus, I find much to abhor in how those teachings are expressed in far-right Christian theology.
  
  
• "Your Head on My Shoulder: Parasitic Twins and other Half-Formed Siblings," by Jesse Bering, in Slate--This article was interesting in its gruesome descriptions of parasitic twins, in which one twin is born healthy and another is mal-formed, incomplete, and attached to the healthy twin. And, also, the author's comments at the end connect to the current movement in this country to ban abortions. We have leaders advocating banning abortion of any kind, even if the young woman is a victim of rape or incest. Evidently, these same people would ban abortions of mal-formed twins (some of which are just a jumble of parts) though such intervention might promote the health of the fully-formed and viable twin. When Michele Bachmann and others such as she say they believe in "liberty," they don't mean the liberty for women to make their own reproductive decisions, even when those decisions are based on sound science and/or compassion.
  
  
• Dave Weigel's piece in Slate, "Republicans for Tax Hikes (Republicans have finally found a group they want to tax: poor people)"--My previous post responds to this crazy turn of events in the Republican party. But Weigel's analysis points out that there is a method to this madness: Tax the poor more so that they will support lowering taxes for everyone. That way, there is more support for keeping taxes low on the rich.

  In 2002 and 2003, long before it got Huntsman in the room, the Wall Street Journal editorialized that poor people who didn't pay income taxes were "lucky duckies." The poor slob with a low income and child tax credit would get a small or nonexistent tax bill, not one that would "get his or her blood boiling with tax rage." The problem here wasn't that the poor slob wasn't paying any taxes; the problem was that his meager tax bill failed to foment enough anger to reduce taxes on other people. Tax cuts for the rich—tax cuts for anyone, really, but the Journal has always been concerned about tax cuts for the rich—require a broad base of outrage.

  Diabolical. And I don't mean that in an admiring way.
  
  
• Ta-Nehisi Coates' blog post, "Affirmative Action for Colonial White People," on The Atlantic's website--Actually, I read this piece last night, but it seems to me that what Coates points out here about how slaves (black) and servants (mostly white) were manipulated to prevent their finding common ground speaks to how people continue to be manipulated by those in power in order to prevent those without power from uniting against that power. (See above.)
  
  ___________
  
  *"Brainwashing" may be too strong of a word to describe my experience in the Southern Baptist Church, but the message I got as a child was full of fear and loathing--loathing for the physical self, fear of damnation--and it was sometimes delivered in scary ways. We had preachers who would get all worked up about sin and hell until they were shouting and stomping around the pulpit. At the close of sermons, at what is called "altar-call," we were asked to close our eyes and raise our hands if we felt we needed forgiveness. "Don't worry," the pastor would say, "Only I and God can see your raised hands." But then, once we would raise them, he would tell us that if we had raised our hands, we now needed to come forward publicly and make a confession, implying that we fell "short of the glory of God," in the Apostle Paul's words, if we didn't have the courage to do so. Guilt was a mighty tool. And that time we were studying Hal Lindsey's books was a very dark time, full of foreboding. I had nightmares about Jesus coming back in the clouds and my feet not being able to leave the ground to join the throng of believers in the sky. And one of our pastors would get so excited when our church's gospel quartet sang "The King is Coming," that he would begin screaming. Really.
  

The Poor

My mind has lately returned to my childhood and a place that I once held very dear, my maternal grandparents' home in East Gate, Texas, on the prairie in Liberty County, near Gum Grove, Texas, not far from Huffman, Texas, and Dayton, Texas. My grandparents lived there in a wooden house built by my grandfather and his father. My mother and her siblings were reared there. And I spent many summer days there, picking peas and then shelling them in the shade of pecan trees, shucking corn, playing board games and dominoes with my grandmother, who never seemed to tire from playing those games with her grandchildren. In the evening, we would watch westerns on television or the Grand Ol' Opry with my grandfather. My grandmother would prepare food that sent us home in despair when we were teenagers; one summer one of my sisters gained ten pounds after staying a week with my grandmother. The typical breakfast spread? Fried eggs and bacon, sausage, homemade biscuits served with milk gravy and butter from the Jersey cow, fig preserves, and very black coffee. My grandmother would also prepare spice cake, lemon meringue pies, chocolate meringue pies or pecan pies for later desserts. Supper was frequently fried chicken, mashed potatoes and gravy, and a selection of vegetables we had perhaps helped pick.

My grandparents' education did not go beyond 9th grade. My grandmother told me that when she was in ninth grade, she caught flu and stayed home to recuperate. She never returned to school. My grandfather worked the rodeos, labored in the oil fields before I was born, and worked for Liberty County doing odd jobs. He raised cattle and sold cattle. He, my father, and one of my uncles herded their cattle together, with that of other friends, on government land in the marshes of Old and Lost Rivers when I was a child. I still have clear memories of my grandfather on a horse, of the sound of boots on a wooden floor, of the jangle of spurs and the whispering shush of leather chaps--and of Papa playing "Redwing" and "Orange Blossom Special" on his harmonica.

My grandmother's favorite television show was a morning show called "Dialing for Dollars." At the beginning of the show, the host would announce a password, and later in the show, the host would dial a telephone number. If the person answering the telephone knew the password, that person would win prize money. We couldn't be far from the telephone on those days that my grandmother watched; she always hoped that she would win. And I think she did win some groceries one time. Other than that, my grandmother didn't watch much television. But she loved the Houston Astros, and she would listen to games on the radio.

Only occasionally was I reminded that my grandparents were poor, especially in their old age.  My grandmother clipped coupons, counted her change, and was careful to purchase items on sale. When I was a very little child in the early sixties, she made her own cotton dresses on a treadle sewing machine. I remember the old wringer-washing machine that was in the side yard next to the house and the clothesline where we hung out clothes to dry. Later, of course, she had an electric washer and dryer installed in what we called "the back porch," rooms enclosed at the back of the house near the kitchen. I suspect that the electric washer and dryer were gifts from family, perhaps her children. The house itself lacked air-conditioning. Instead, someone had installed an industrial fan in the dining-room window. The fan didn't have a switch. We would have to plug it in and then give one of the fan blades a push to get it going.

And, then, once when I was a young adult, maybe still a teenager, we had a family gathering at which I was forcibly reminded of my grandparents' poverty. A young woman from Houston whose mother had married into the family was visiting with her fiance, a very well-off young man. As they walked under the shade of the pecan trees into the yard bare of grass and up to the un-air-conditioned house, I overheard the young woman say to her future husband, "Can you imagine living here?"

I can still feel the hot flush of anger...and shame...that I felt then, loving my grandparents as I did and also realizing that they were indeed poor, specimens of poverty in the eyes of the suburban middle-class and the Houston wealthy.

What we never lacked at my grandparents' house was plenty of love. My grandmother's freezer and refrigerator were always full of food, and she loved preparing meals for her extended family. She and my grandfather were generous and kind.

I think of them when I hear pundits sneer about the poor today, about how 51% of Americans don't pay federal income tax because they are, indeed, poor. Those pundits easily forget that those Americans pay other taxes,  payroll taxes (if they have jobs), taxes on goods, property taxes, and state income taxes in those states with such taxes.  I was enraged by Fox News pundits claiming that Democrats, President Obama, and even that really wealthy guy Warren Buffet were inciting class warfare against the rich -- and at the language used on Fox News to describe the poor as "takers" and "moochers." And I was happy to see Jon Stewart expose the hypocrisy and meanness of those who think the poor can't be poor if they own a refrigerator or a microwave or a cellphone. Watch Jon's takedown here: Jon Stewart's The Daily Show, August 18, 2011.

We owe a lot to the working poor.

University Costs

My husband and I recently moved both our adult children back to the universities that they are attending: two children in two different states. Now we're back to a two-adult household, just as we started our married lives 33 years ago--except that we still have dependents. We are essentially maintaining three households, with some assistance from our children. The undergraduate has a state scholarship based on high-school attendance in the state and on grade point average.  The graduate student just discovered that he has been assigned a Teacher Assistant position in the department where he is studying, a position that will perhaps waive out-of-state tuition (but not tuition altogether) and offer a small stipend. Both saved money from summer jobs this year while living with us to cut expenses.

What a difference I see between the time that my husband and I were in college and today.  The costs of higher education have increased significantly since 1978-1987, when my husband and I married as undergraduates and then attended graduate school. My husband and I were able to pay all our expenses with the money we made as a Graduate Assistant Teacher and a Graduate Research Assistant. Our son's  TA position will fall far short of providing for living expenses, books, and tuition. Students such as he must either depend upon family assistance or student loans. One university sent our son a letter informing him that he was eligible for a loan, of course--for $45,000 a year, essentially what comes to a $100,000 debt for a master's degree. My husband and I paid less than $100,000 for each of the first three homes that we bought between 1983 and 1993.  And we graduated with a master's degree and a Ph.D with no debt, due to scholarships, teaching and research appointments, cheap married-student housing, food hand-outs from family, and penny-pinching. Pity the kids who graduate with a $100,000+ debt and want to begin a Ph.D program, too. Or start a family.

See also: "The Debt Crisis at American Colleges," by  Andrew Hacker and Claudia Dreifus, in The Atlantic, posted 17 August 2011.

Interesting Comparisons

A recent study published by the Pew Research Center used data collected by the Census Bureau to determine the effect of the recession on certain segments of the population.  From 2005 to 2009:

• "the median wealth of Hispanic households fell 66 percent
  
• ....while the median wealth of whites fell just 16 percent over the same period."
  
• "African Americans saw their wealth drop 53 percent."
  
• "Asians also saw a big decline, with household wealth dropping 54 percent."
  
  Source: "Recession Study Finds Hispanics Hit the Hardest," Sabrina Tavernise, The New York Times,  26 July 2011.

In contrast, the Center for Responsive Politics has a new study out showing that:

• ... "congressional members’ personal wealth collectively increased by more than 16 percent between 2008 and 2009."
• ... "[n]early half of them -- 261 -- are millionaires, a slight increase from the previous year..."
• "And of these congressional millionaires, 55 have an average calculated wealth in 2009 of $10 million or more, with eight in the $100 million-plus range."
  
  Source: "Congressional Members' Personal Wealth Expands Despite Sour National Economy," Open Secrets Blog at opensecrets.org

Here's how the median household net worth plunged for different segments of American society:

• Hispanics:  from $18,359 in 2005 to $6,235 in 2009.
  
• Blacks: from $12,124 in 2005 to $5,677 in 2009.
  
• Whites: from $134,992 in 2005 to $113,149 in 2009.
  
• Asians: from $168,103 in 2005 to $78,066 in 2009.
  
• All: from $96,894 in 2005 to $70,000 in 2009
  Source: "Recession Study Finds Hispanics Hit the Hardest," New York Times.  

In contrast, the median wealth of our leaders in Congress and the Senate INCREASED:

• U.S. House member:  from$645,503 in 2008 to $765,010 in 2009.
  
• U.S. Senator: from $2.27 million in 2008 to $$2.38 million in 2009.
  
• ALL members of Congress, House members and Senate members: $785,515 in 2008 to $911,510 in 2009. 

Source: "Congressional Members' Personal Wealth Expands Despite Sour Economy," www. opensecrets.org

Of course, these numbers represent median wealth of groups whose members have very disparate household worth. But the comparison is stark between the median wealth of members of the U.S. Congress and those of the citizens who elected them and who are suffering the most from the economy. It is therefore difficult not to be cynical when Republicans insist on not raising taxes on the wealthy (letting the Bush tax cuts expire, as was initially planned) to help balance the budget. Two-thirds of the American people think those taxes SHOULD be raised on the wealthiest. Therefore, whose interest are Republicans serving?

Signs of the Times

• The rich hire protection from the economically-depressed masses: "These Guys will Stop you from Killing your Boss," Josh Harkinson, Mother Jones, July/August 2011 issue.
  
  
  
• Is poverty being criminalized?: "Turning Poverty into an American Crime," Barbara Ehrenreich, The Nation (originally posted on TomDispatch.com), 9 August 2011.
  
  
  
• Why is there such hatred of the poor as the poor get poorer and the richer get richer?: "Nebraska AG Jon Bruning Compares Welfare Recipients to Scavenging Raccoons," Benji Sarlin, Talking Points Memo, 9 August 2011.
  
  
  
• What is happening to the middle-class in America?": "Can the Middle Class be Saved?," Don Peck, The Atlantic, September 2011 issue. 
 
• The unemployed need not apply: "The Help-Wanted Sign comes with a Frustrating Asterisk," Catherine Rampell, The New York Times, 25 July 2011.

• London burns in riots "led by gangs of young people and organized in part via BlackBerry instant messaging." The riots began in economically-depressed neighborhoods and have spread to other cities: "London Burning: A Foreign Policy Slide Show"; also "Why London Exploded Last Night," Michael Goldfarb, Salon, 9 August 2011.
  
  
• Social media used by criminals to create flash mobs to cover for crimes: "For Flash Mobsters, Crowd Size a Tempting Cover," Eric Tucker and Thomas Watkins for Associated Press, Salon,  9 August 2011.
  
  
  
• Voluntary citizen clean-up crews in London use Twitter to organize after rioting: "Londoners Turn to Technology to Stop the Looting,", Adam Clark Estes, The Atlantic Wire, 9 August 2011.
  
  
  
  
• governmental coverups--Severity of radiation exposure downplayed by Japanese government: "Japan Held Nuclear Data, Leaving Evacuees in Peril," Norimitsu Onishi and Martin Fackler, The New York Times, 8 August 2011.
  
  
  
• regulation coverups--Is the Nuclear Regulatory Commission in the U.S. doing its job?: "Whistleblowers Say Nuclear Regulatory Commission is Losing Its Bite," John Sullivan and Cameron Hickey, ProPublica,  27 July 2011.
  
  
  
  
  just a few.....

Protecting the Rich and Powerful

This morning, I read on Salon's website an article titled "The Rich Aren't Like You and Me," by Michael Winship. Winship describes how the rich are getting richer and richer and the poor, poorer and poorer. CEO pay and compensation continues to grow while workers' salaries stagnate. Of 438 companies analyzed:

[a]t 158 of the companies, more was paid to those in charge than was shelled out for outside audit fees. And 32 of them paid more in top salaries than they paid in corporate income taxes. The pay of 2591 executives was up 13.9 percent in 2010. Total, before taxes: $14.3 billion, almost equal to the GDP of Tajikistan, population: more than seven million.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (See also, here) was passed in 2010, in response to the financial crisis, but interested parties have been chipping away at its regulatory power. One of the requirements of the Dodd-Frank would have made transparent the difference between CEO compensation and worker compensation of publicly traded companies: "The Dodd-Frank Act requires publicly traded companies to disclose the median annual total compensation of all employees of the company, the annual total compensation of the CEO, and the ratio comparing those two numbers."

Some folks, however, think that gathering this information is just "too burdensome" for companies and that the money spent gathering that information would best be spent on hiring workers. (Really, how difficult would it be for a company to publish that information in its annual report?) So Rep. Nan Hayworth (R-NY) has sponsored a bill--which has passed in the Committee on Financial Services--to do away with this "burdensome" requirement. Companies, of course, have a vested interest in not making this kind of information easily available to the public--and their own workers. Nan Hayworth also has a vested interest. As Michael Winship points out, Nan Hayworth's official biography

cites 'reducing regulatory burdens on businesses' as one of her top priorities. Among her leading 2010 campaign contributors: leveraged buyout specialists Vestar Capital Partners, distressed debt investors Elliott Management and financial services giant Credit Suisse. Not to mention the anti-taxation Club for Growth.

Businesses, of course, are making profits once again in our stressed economy; workers, however, are not seeing their pay rise accordingly.

So I was curious to see who co-sponsored this bill to lift such a "burdensome" requirement, as outlined in H.R. 1062: Burdensome Data Collection Relief Act. Here are the names: Judy Biggert (R-IL), Francisco Canseco (R-TX), Bob Dold (R-IL), Scott Garrett (R-NJ), Michael Grimm (R-NY), Peter King (R-NY), Bill Posey (R-FL).

As Peter Whoriskey reports in his article in the Washington Post, "Business Group: Public Companies Shouldn't have to Compare CEO and Worker Pay":

The committee vote was largely along partisan lines: Twenty-nine Republicans and four Democrats supported repeal; 21 Democrats opposed it.

As income disparity grows in this country, it's interesting to see just who forms alliances to hide that disparity and to protect the rich.

And so it goes.

Additional information:
members of the Committee on Financial Services

Register opposition or support: popvox

Politics Vs. Substantive Discussion of Issues

"... [R]elentless emphasis on the cynical game of politics threatens public life itself, by implying day after day that the political sphere is nothing more than an arena in which ambitious politicians struggle for dominance, rather than a structure in which citizens can deal with worrisome collective problems." --James Fallows, in "Why Americans Hate the Media," Atlantic Magazine,  February 1996.

I am re-reading this article from The Atlantic's archives. Fifteen years later, it seems to me that the media focus is even more on politics rather than on substance, substance such as how our country should deal with the very real problems of unemployment, wars in Afghanistan and Iraq (and now Libya and maybe even Yemen), the financial crisis, and climate change.  Republicans have just about abandoned any real attempt to create jobs for the millions of unemployed Americans, and they are threatening to blow up our country economically by holding the debt limit hostage to their budget-cutting demands, despite contrary advice from economists within their own party. I'm beginning to think that Republicans are willing to sacrifice American livelihoods to win the presidency--They just rejected a suggestion to cut payroll taxes, a move that would stimulate the economy and a tax cut they very much favored in the past. It's all about politics. All about how a poor economy will hurt President Obama's prospects--and the Democrats'--in 2012. And the media focuses on the politics--on how not embracing Paul Ryan's budget plan will affect Republican nominees' chance at the presidency, not on how adopting Ryan's plan will affect ordinary Americans. It's not about us, the people, and how these policies will affect our everyday lives.

Update (Thursday, 23 June, 2011):
The point that James Fallows makes in the quote I've excerpted above has been demonstrated once again in the discussion of climate change. Al Gore has published a very well-written, insightful article in Rolling Stone on climate change. Does the media then discuss climate change, the overwhelming evidence of climate change, the tremendous push-back from vested interests, the consequences of climate change, the ways to confront climate change? No, of course not. Because Al Gore included some criticism of President Obama in his article, the media immediately focuses on politics: Al Gore vs. Barack Obama--as if the whole issue boils down to a boxing match.

Yet Gore's criticism of Obama is muted and is only a small piece of the long article. Once again, the media turns a serious topic into political entertainment.

It's disheartening.

Read the article: "Climate of Denial," Al Gore, Rolling Stone, 22 June 2011.

Typically, television media frames  Gore's discussion of climate change as a political spat, "Gore vs. Obama." On Hardball, Chris Matthews begins his show using that very frame, though he does give a little push back in the lead-in, as do Joan Walsh and Eric Bates: "Drop the Gore vs. Obama Script," Joan Walsh, Salon, 22 June 2011.

Please go back to your real job, Paul Broun (R-GA)

I am getting really, really tired of hearing U.S. Congressmen and Senators excoriate other public employees. For some reason, Republicans don't seem to think that federal employees are citizens; they certainly don't care if their budget cuts and threats not to raise the debt ceiling deprive hundreds of thousands of citizens of their jobs. And now Paul Broun, Republican Congressman from Georgia, flippantly states on conservative radio host Martha Zoller's show that not raising the debt limit would only put 250,000 or so people out of work. And who cares about those people, anyway? They're just federal employees:

Well, [Paul Broun said] those are gonna be government employees that are put out of work. There are a lot of government employees that need to go find a real job. [Hear these words here:"Paul Broun Fine with 250,000 Public Employees Being Laid Off..."]

Just what is a real job, Congressman Broun? Is taking care of the payroll with the Department of Defense not a real job? Is running the veterans' hospital system not a real job? Is collecting federal income taxes not a real job? How about managing federal lands and national parks? How about the crews who do the cleaning up after tourists at national monuments, national parks, national museums? How about the folks who provide summer informational tours and activities for children at those national museums and national parks? How about those folks at NOAA who chart hurricane activity in the summer and fall? How about the people who make sure (to the best of their ability even when stymied by budget cuts and ideological demagoguery) we have clean air and water?

I admit, Paul Broun, I have a dog in this fight. My husband works for the federal government; he was fortunate to get this job, one which he not only enjoys but for which he is eminently qualified, during the worst economic crisis since the Great Depression. We have been married for thirty-three years, have seen hard times and good times, and are putting two kids through college. Well-educated, neither of us has ever received a paycheck that truly compensated us for our skills and education, but, also, neither of us has ever been motivated primarily by money. We've had jobs that enabled us to give back to society in some way, through education, conservation, or scientific research. And now we have reached the age when it becomes increasingly difficult to find appropriate employment if we lose our jobs. I know. I've been either under-employed or un-employed for the past several years, despite an excellent employment history (though being a woman who changed jobs to fit the needs of her family certainly did not help me in the long-term). There are hundreds of thousands--millions--of Americans like us, people who paid their taxes, took responsibilities for their families, contributed to their communities, and looked forward to, if not a comfortable retirement, at least a livable retirement.

Those hundreds of thousands of Americans include federal employees who have helped people like you steer the ship of state. And now, in a time of great distress, you are all for abandoning them and for taking an economic path that would not just put more Americans out of work when the current national unemployment rate is 9.1%, but that would also have additional serious consequences for millions of people around the world. Not raising the debt limit could--according to economists that include those from your own political party--cause another financial crisis, and we're not even out of the current crisis yet. Some are even predicting that the current crisis could escalate into another Great Depression. And you're just itching, evidently, to add fuel to the fire.

So please go back to your real job, Congressman Broun. As a federal employee.....you suck.

No Consequences for Bad Behavior; Little Regulation to Prevent It

For a long time I have been thinking--almost brooding--over the global financial crisis. Before 2007, I hadn't thought much about Wall Street though I had read my share of news articles over the years about the power of Wall Street and was passingly concerned about the influence of that power over our elected officials. With the financial meltdown in 2008, however, I began paying much more attention to financial and economic news. Nothing in my background--poet, teacher of literature and writing, gardener, art car enthusiast--prepared me for such an interest. I certainly knew nothing about derivatives. But the financial meltdown has enough sturm und drang for any engaging narrative of greed and corruption, tragedy and despair. And when the narrative touches one's own life, well, it does make one sit up and pay attention, doesn't it?

After reading numerous articles and blog posts about the crisis, after watching PBS Frontline specials and Charles Ferguson's documentary Inside Job (now available through Netflix), I think I can say with some confidence that the rats who almost blew up the world as we know it are still on the ship. Nor have they been caught and brought to trial and punished for their bad behavior. Nope. Some are at the helm of the ship. Others are cocooned on islands of privilege and are enjoying their millions.

Meanwhile, millions of Americans have been laid off, are out of work, can't find work, have lost their homes, are in danger of losing their homes, can't afford a college education or to pursue their dreams of owning a business. Ordinary Americans have bailed out the banks and the bastards who brought us to the brink--yet our elected leaders are trying to cut the very benefits that would prevent many Americans from suffering an impoverished and miserable old age. We can afford to save Goldman Sachs and Fannie Mae but not Medicare or Medicaid. We can regulate a woman's uterus but not the financial market.

Today, in The Washington Post, Ezra Klein points out that "though the financial crisis remains lodged in our minds, and in our jobless rates," our elected officials are not confirming leaders to help regulate the financial institutions that caused the crisis:

... [T]he Federal Reserve lacks a vice chairman for banking supervision. There’s no one officially in charge of the Treasury Department’s Office of Financial Research. The seat marked “insurance” on Financial Stability Oversight Council is empty. The Consumer Financial Protection Bureau has a leader but not a director. No one has been confirmed to head the Office of the Comptroller of the Currency. And Republicans are still saying Nobel Prize-winning economist Peter Diamond is underqualified to serve on the Federal Reserve’s Board of Governors." "If it can go wrong, it will go wrong. And it'll be our fault," The Washington Post, 24 May 2011.

And, in their over-the-cliff plans to cut the deficit, "the House GOP is fighting to starve financial regulators of the resources they need to do their work." As Klein points out, we have a deficit because of the financial crisis, and we have a financial crisis because of a lack of regulation, and we're not funding regulation because we have a deficit. See some circular reasoning on the part of our leaders?

How to respond to such idiocy? With cynicism, says Kevin Drum (well, actually, he says the situation overwhelms his own cynicism):

It's this, more than anything else, that has convinced me over the past couple of years that America's wealthy class is simply morally bankrupt and that the leadership of the Republican Party is politically bankrupt. Five years ago I would have been embarrassed to write a blog post suggesting that this might be the reaction of the moneyed class to an economic collapse. Then we had one and this was the reaction. Once again, events have outrun my best efforts to be cynical.

It's certainly with cynicism that I listened to Dave Davies interview Gretchen Morgenson on NPR's Fresh Air today. Morgenson, who writes about finance for The New York Times, has just published a book she co-wrote with Joshua Rosner: Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon. In this book, Morgenson "focuses on the managers of Fannie Mae, the government supported mortgage giant." Like the later financial players of Wall Street--Morgan Stanley, Goldman Sachs, et alia--the managers of Fannie Mae pursued deals that enriched them and that weakened regulatory oversight. But lest listeners think these details support the Republican narrative that the financial crisis was all due to mortgage defaults, to the government's "meddling in the market" in its determination to "push home ownership" to people who couldn't afford it, Morgenson adds that "Wall Street was not a passive player." Had regulators done their due diligence, had there been rigorous oversight, we would not be in the economic situation that we're in now.

And it's certainly with cynicism that I read today that the Tea-Party backed candidates who were elected because of the anger people felt toward the bailouts and Wall Street shenanigans "are now pushing pro-Wall Street legislation" and that "[t]he 10 Republican freshmen on the House Financial Services Committee have taken in nearly $600,000 from the financial industry since Election Day, according to the Sunlight Foundation." ["Tea-Partiers Swept in on Anti-Wall Street Wave Now Pushing Deregulation," Ryan J. Reilly, TPMMuckraker, 24 May 2011.]

To maintain that realistic and appropriate level of cynicism, I am creating here a list of articles to read (or re-read) and documentaries to view (or re-view) on the financial crisis, on who took us there (a bipartisan ride), who abandoned us, who profited, who suffered, and why it's probably gonna happen again. (in no particular order except that I'm working backward from today and jumping around locating articles I remember reading and identifying others I haven't read but which look promising)

• Marian Wang, "Cheat Sheet on Bank Investigations and the Probes that have Petered Out," ProPublica: Journalism in the Public Interest, 24 May 2011.
• Matt Taibbi, "The People versus Goldman Sachs," Rolling Stone, 11 May 2011.
• Matt Taibbi, "The Great American Bubble Machine," Rolling Stone 5 April 2010.
• Brian Beutler, "One-Time Warren Foe Now Pressuring Obama to Give Her Recess Appointment to Head Consumer Bureau," TPMDC 23 May 2011.
• Ben Protess, "Warren and Republicans Spar Over Bureau's Power," DealBook, in The New York Times, 24 May 2011.
• Katrina vanden Heuvel, "Why Obama Should Appoint Elizabeth Warren,", in The Washington Post, 24 May 2011.
• The Reckoning--a series of articles published in The New York Times that "explored the causes of the financial crisis of 2008." The series includes these articles, among others: Peter S. Goodman and Gretchen Morgenson, "Saying Yes, WaMu Built Empire on Shaky Loans," 28 December 2008; Jo Becker, Sheryl Gay Stolberg, and Stephen Labaton, "White House Philosophy Stoked Mortgage Bonfire," 21 December 2008; Louise Story, "On Wall Street, Bonuses, not Profits, were Real," 18 December 2008; Eric Lipton and Raymond Hernandez, "A Champion of Wall Street Reaps Benefits," 14 December 2008; Peter S. Goodman, "Taking a Hard New Look at Greenspan Legacy," 9 October 2008.
• Jesse Eisinger and Jake Bernstein, "The Magnetar Trade: How One Hedge Fund Helped Keep the Housing Bubble Going," ProPublica, 9 April 2010.
• Jake Bernstein and Jesse Eisinger, "The 'Subsidy': How Merrill Lynch Traders Helped Blow up Their Own Firm," ProPublica 22 December 2010.--Or read the series of ProPublica's investigative articles on the financial crisis here: "The Wall Street Money Machine."
• Oh, and this little post is sort of funny: Did Porn Cause the Financial Crisis?", posted 23 April 2010, by Daniel Indiviglio, associate editor at The Atlantic.
• Jack Dolan, Rob Barry, Matthew Haggman, "Borrowers Betrayed," Miami Herald, 2009--series on the Florida mortgage industry and the lack of regulation oversight that led to criminals being granted state licenses.
• Dean Starkman, of Columbia Journalism Review provides a list of worthy articles on the financial crisis: "No Pulitzers, But Here's an Audie", posted 21 April 2009.
• "The Warning," a Frontline report on Brooksley Born, head of the Commodity Futures Trading Commission during the Clinton administration, who tried to warn the economic power-brokers of the potential for economic meltdown if the derivatives market was not regulated. As of this writing, the full video can be watched online. DVDs are also available for purchase from PBS.(air date, 20 October 2009)
• Frontline's "Inside the Meltdown," first aired on 17 February 2009, at this writing, can be viewed entirely online on the PBS website. Or just go to the webpage that includes links to all the Frontline videos that are available online: "Watch Frontline Online".
• Michael Lewis, "Wall Street on the Tundra," Vanity Fair, April 2009--Unfortunately, this article is no longer fully available on Vanity Fair's website, but I found a .pdf version elsewhere, "Wall Street on the Tundra", that might still be accessible. This is the article that really got me interested in the details of the financial crisis. I remember reading it shortly after it was published online.
• Kevin Hall, "Mortgage Crisis Shows Why Financial Regulation is Needed", McClatchy, 1 November 2009. And you can see all the stories and videos that resulted from McClatchy's five-month investigation into Goldman Sachs here: McClatchy Newspapers, investigation into Goldman Sach's contributions to the economic crisis.
• Paul Solman interviews Charles Ferguson, director of Inside Job. In the interview, Ferguson talks about undisclosed ties and conflicts of interest in the financial relationships between academics in economics departments and the financial sector.

This is a short list of all one can find on the economic crisis online. I didn't include articles from The Wall Street Journal because I'm not a subscriber and am therefore unable to access them. Most of the sources on this list are not locked behind a subscription wall--except for, perhaps, The New York Times articles--because I do subscribe to the online version of The New York Times.

--so little time, so many opportunities for corruption.....

The Old Recliner

If anything represents how we cannot seem to divest ourselves of stuff, this old recliner does. The first time I met it, it was at my in-laws' house, with the stuffing pooching out. The recliner had belonged to my husband's grandfather, who was a lawyer in Houston, Texas, and I guess Sam Tom's (first and middle name--Samuel Thomas) daughter kept it not only for sentimental reasons but for practical reasons as well. Eventually, my mother-in-law had the chair recovered; what you see is her choice of fabric, circa 1980s.

My husband loves this chair. I have stuffed it away in sad corners, but it always manages to make its way to a more public and useful place. I have threatened to sell it or to give it to Goodwill, but I have decided that I value my marriage more. This time I made a place for it right away, in my study, where my husband can read, rest, watch, or comment while I blog or work on my latest craft project. And so I celebrate compromise, resilience, and a long marriage by allowing this chair in my own space! Now if I can only convince Tom to have it recovered!

Maybe we hang on to these things because life itself is so unpredictable. We thought that our move to Atlanta would be our last move until retirement, that we would have a cool, urban place for our college-age children to return to and to call home. But our married life of almost 33 years has been one move after another, moves which we have decided to take upon ourselves, seeking better prospects or more amenable accommodations and surroundings or moves that have been forced on us by circumstances, such as layoffs, budget crises, and uncertain economic times. However, there is no exceptionalism in these experiences; American society has been a mobile one since its inception. My husband often reminds me of an article he read the year he finished his Ph.d. at Louisiana State University. The author predicted that college graduates of that year would move an average of seven times over the course of their working lives. We have met that average. Our experience is not uncommon, particularly in these unsettling times. Though the unemployment rate has recently dropped below 9%, millions of Americans are still seeking jobs, and college students can't find jobs comparable to their skills and education. Again and again, I read of college students who graduate with huge debts, who expect to spend the rest of their lives paying off the debt they incurred in order to achieve that degree. Is it worth it?

We face this question--is it worth it?--as our oldest child heads off to graduate school and our youngest child begins her second year as an undergraduate in the fall. Our son was admitted to all four aerospace engineering schools to which he applied, but it looks like the choice he will make will be the one that's less expensive. The school he has chosen--the one he attended as an undergraduate--is a great school, ranked in the top 20 aerospace programs; at least one of the other, more expensive schools is ranked in the top 10. Does that difference matter? Is it worth it to shackle one's future to a huge debt? We think not, but only the future will determine whether or not our son has made the right decision. And isn't that the case for every decision that we make? We just do the best we can with the cards we've drawn from the stack.

What I do know is that we're not ready to make that recliner our permanent seat in our new home. For our generation and generations to come, retirement will be pushed further and further away unless one belongs to that lucky 1% of Americans who own 40% of the nation's wealth. The recliner will just be a respite from life's difficulties, not a permanent refuge. 

But today I read an article in which a doctor describes research that suggests resiliency is the characteristic we most need in order to achieve a healthy old age. He has patients who are over 100 who have full mental capacity. What characteristics seem to have served them well? The ability to overcome serious setbacks without whining, to face those difficulties with a deprecating sense of humor, and to move on. These we can all practice to achieve. And life does seem to be providing us with plenty of opportunities to practice!

And so I welcome this change even though it was not one of my making or choosing.

Discouraging

Yesterday evening as we drove home from watching the 3-D version of Avatar, we noticed a woman at a stoplight. As soon as cars came to a stop at the traffic light, she stepped off from the sidewalk to brave the still-slippery spots of the icy road in order to beg for money. She passed from car to car, holding up a one-dollar bill in mute request for more. I thought of her later as I remembered Judy Woodruff's report about jobs in December: the percentage of joblessness was remaining steady--but that was in light of the fact that 600,000 people had stopped looking for jobs.  Where does the government get the numbers for unemployment statistics? I had been told that the number comes from unemployment offices and that it is derived from the number of people still seeking employment and receiving benefits. The answer is more complicated than that, however, and is described on this website of the Bureau of Labor Statistics: http://www.bls.gov/cps/cps_htgm.htm

Just as discouraging as the number of folks who quit looking for jobs last month (for whatever reason), is the information about what recently re-employed people are discovering in the current economy. Most folks take a pretty hefty pay cut with the next job. And this pay cut affects their future earnings:

[P]eople hired at lower wages in a tight job market tend to lag behind their peers for years, sometimes decades. For example, workers laid off during the 1981-82 recession earned 20 percent less than people who remained in a job — even 20 years after they were rehired, a Columbia University study found. The study examined pay for white- and blue-collar workers, managers and hourly workers. ("For the Unemployed, New Job Often Means a Pay Cut," Christopher Leonard, Associated Press Writer, 10 January 2010)

In addition, "[m]ore than six people are now vying, on average, for each job opening, according to Labor Department data — compared with just 1.7 workers per opening when the recession began in December 2007." (my emphasis)

Some institutions benefit from joblessness. I read a recent article that reported a tremendous rise in the number of people returning to college, particularly to community colleges, and the number of traditional students who are choosing less-expensive colleges closer to their homes. (See Washington Post's "Community Colleges Get Influx of Students in Bad Times," by Valerie Strauss, 31 May 2009).  However, many community colleges are unprepared for this huge influx of students, for their state funding has been hurt by the economic downturn as well. (See "Community Colleges Get Squeezed," by Brian Burnsed, Business Week, 15 January 2009) One consequence is that community colleges are hiring more part-time faculty.  Look at the employment pages of any community college and note how many adjunct positions are being advertised. For instance, as of last year, New Jersey's Burlington County College was planning "to hire up to 200 new adjunct faculty members, increasing its part-time teaching staff to about 575, at the same time that the college faces a drastic cut of nearly 42 percent from the county and state."

Such part-time jobs for educators might sound great in this tough economy, but the pay for those jobs is often very low, particularly in the South, and those part-time positions also offer little or no benefits.  In a country where one receives better access to health insurance through full-time employment, that's not good news.

(For more on part-time faculty at community colleges, see Inside Higher Ed's The Part Time Impact," 16 November 2009).

Dashed American Dreams

Today my husband, a highly competent and reliable professional, joined the ranks of the unemployed. He signs up for unemployment benefits tomorrow, having arrived at the local unemployment office too late in the afternoon today (mid-afternoon) to make it to the head of the line. The unemployment office in this county is evidently doing a booming business. I have been under-employed for some time--mostly out of choice for personal and family reasons--but I am now applying for full-time jobs so as to more adequately support my family in this difficult time.

We have become a part of the depressing stream of statistics one reads about in newspapers and on blogs.  In her article at the Huffington Post, Elizabeth Warren, Chair of the Congressional Oversight Panel, lays out some of those shocking statistics:

• "One in five Americans is unemployed, underemployed, or just plain out of work."
• "One in nine families can't make the minimum payment on their credit cards."
• "One in eight mortgages is in default or foreclosure."
• "One in eight Americans is on foodstamps."
• "More than 120,000 families are filing for bankruptcy each month."
• "The economic crisis has wiped more than $5 trillion from pensions and savings....and threatens to put ten million homeowners out on the street."

The middle class is suffering while Wall Street and bankers took handouts from the government (paid from our pockets) and now are making money once again, paying back the debt they borrowed and acting as if they are now free from any responsibility for the economic crisis.

My family is doing better than many Americans in our situation. We began taking care of financial debt as soon as the economy began to tank and started economizing around our household. We had long-term financial plans in place years ago--but as two adults who are unemployed and underemployed with two college-aged children, we now are facing the possibility of those financial plans failing. Oh, yeah, and what about health care? As Republicans unite to stall the health care debate, Americans are losing their access to adequate health care as they lose their jobs.

There is every reason to believe that we will recover, that my husband will be employed again and that I will find an interesting and challenging full-time job when our last child goes off to college. But this is not a given. I work with young people just out of college who are having a very difficult time finding full-time work in their chosen professions. One young woman, a psychology major and a recent graduate of an excellent liberal arts college, has applied for jobs ranging from holiday retail staff to parole officer. She sends out two to four applications every week while holding down a part-time job that offers no benefits. Other college-educated people with whom I work cobble together two or three part-time jobs in order to make ends meet.  And we see more and more of the recently laid off on our college campus, anxious to update skills in order to be more competitive in a distressfully diminished job market.

Sitting here, now, at this keyboard, I can count my blessings....as I have been trying to do since last week, but I also have a hollow feeling in the pit of my stomach, that hollow feeling of anxiety that whispers, "What if?  What if one of you gets really ill? What if things don't work out the way you hope?" The economic news does not inspire confidence. We've been without jobs before, but we were younger, and the economy was better. As Elizabeth Warren notes:

Going to college and finding a good job no longer guarantee economic safety. Paying for a child's education and setting aside enough for a decent retirement have become distant dreams. Tens of millions of once-secure middle class families now live paycheck to paycheck, watching as their debts pile up and worrying about whether a pink slip or a bad diagnosis will send them hurtling over an economic cliff.

And now....back to composing that cover letter and updating my vita.

Consequences of the Economic Crisis

I've never really understood the intricacies of the stock market or Wall Street, but the economic crisis of the Bush administration and the continuation of that crisis in the Obama administration have prompted me to become a lot more informed. This week I followed a link to an article published in Vanity Fair by Joseph E. Stiglitz, Nobel Prize-winning economist and professor at Columbia University. I had read other articles and interviews with Stiglitz, and what he said made sense, so I was interested in reading "Wall Street's Toxic Message." In this article, Stiglitz discusses what he sees as consequences of a world-wide economic crisis for which America (Wall Street, bankers, mortgage lenders, the American government, the American people who lived beyond their means) is greatly responsible.

With the ideals of democracy, America has also proselytized the ideals of an unfettered market to developing countries (as well as to the rest of the world and ourselves). Now, however, this recent economic crisis has revealed to developing nations the magnitude of America's displaced faith in unfettered markets. "Today," Stiglitz writes, "only the deluded would argue that markets are self-correcting or that we can rely on the self-regulated behavior of market participants to guarantee that everything works honestly and properly." Even in the past, unfettered markets did not work to the advantage of developing countries; the cards were stacked in favor of western powers:

Europe and America didn't open up their own markets to the agricultural produce of the Third World, which was often all these poor countries had to offer. They forced developing countries to eliminate subsidies aimed at creating new industries, even as they provided massive subsidies to their own farmers.

These countries have noted that the United States and the International Monetary Fund responded much differently to the East Asia crisis of ten years ago than to the current economic crisis. Then, the United States and the I.M.F. insisted that Third World countries be tough: to "cut their deficits by cutting back on expenditures," "to raise interest rates, in some cases more than 50 percent," and not to bail out their banks. These restrictions created great hardships in the countries most affected. Now, however, in the current crisis, the U.S. has not expected from itself what it expected from poorer, developing countries in that crisis ten years ago. The U.S. government has bailed out its banks, has raised the deficit, and has lowered interest rates. This hypocrisy does not improve our standing in the world. Stiglitz notes, "Why, people in the Third World ask, is the United States administering different medicine to itself?"

There are consequences to these actions, Stiglitz argues:

• The role of the Unites States has diminished and may continue to diminish: "We are no longer the chief source of capital. The world's top three banks are now Chinese. America's largest bank is down at the No. 5 spot." Developing countries have used the American dollar as their "reserve money" to maintain confidence in their solvency. However, the American dollar does not engender the confidence it once did. The world may choose other currency to serve as reserve currency, and the Chinese are out front in suggesting such a possibility.
  
  
• In the current economic crisis, America has provided less monetary support to developing countries. Stiglitz points out that we were never terribly generous anyway. However, China is stepping into the breach, and more and more developing countries are turning to China for assistance. I can think of how countries such as Sudan have received much infrastructure support from China. China is a lot less interested in human rights than the U.S. is, so China's increasing influence will have a different effect than that of the U.S.
  
  
• There is the possiblity that this increasingly lack of confidence in America will blossom into a rejection of capitalism altogether, at least by governing powers of developing countries, which can lead to regimes that will not be good for the poor.
  
  
• The loss of confidence in American-style free markets may also result in a rejection of other American ideals, such as democracy. Stiglitz writes that "democracy and market forces are essential to a just and prosperous world," but concludes that "[t]he economic crisis, created largely by America's behavior, has done more damage to these fundamental values than any totalitarian regime ever could have."

More of Joseph Stiglitz's analysis can be found here: Articles by Joseph Stiglitz about the Current Economic Crisis. Other economists may have different views that merit our attention. This is just the most recent article about the economic crisis that sparked my interest.

By the way, the photo at the beginning of this post has little to do with the economic crisis. This is Tom stir-frying beet greens and chopped beats to serve over pasta for our evening meal. My contributions were a green salad with leafy green stuff from a local farm and our own garden--and a fruit salad that included fruit not-so-locally grown. Living with two vegetarians has meant that I eat many vegetarian meals these days, though I did have a turkey-ham sandwich yesterday!

Debt

Reading Gene Lyons' opinion piece, "America's Addiction to Debt," in Salon this evening reminded me of the few minutes of Oprah I watched this afternoon. Suze Orman was on the show telling women how to get out of debt; the woman on the hot seat had 23(!) credit cards; she had racked up thousands and thousands of dollars in debt, took out a loan (or money out of her 401(k)--I don't remember exactly where she got that money) to pay down that debt, but then she immediately racked up additional credit card debt to the total of $79,000.

I sat there with my mouth open. I can understand if one were suddenly confronted with serious medical issues that insurance wouldn't cover. But that much money just spent on stuff? And she's not alone; our country is full of people like her. Earlier this week I caught the re-run of the documentary House of Cards about the housing bubble, the mortgage brokers who helped convince people to buy homes they couldn't afford, and the sleazy Wall Street types who bundled those mortgages into toxic assets to sell to investors, banking on the hope that housing prices would continue to go up and that folks would pay their mortgages. People re-financed their houses to build swimming pools, to upgrade their kitchens, to landscape their backyards, and to buy more stuff. Then they discovered they couldn't afford their lifestyles.

And, as Lyons points out in his essay, "we're all stuck paying for it."

A Picture is Worth.....

Slate has a jaw-dropping graphic illustrating nationwide losses in employment since 2006. See this "interactive map of vanishing employment across the country" here:"When Did Your County's Jobs Disappear?," Chris Wilson, posted April 15, 2009. I watched the bright happy blue dot of Gwinnett County, Georgia, with its 15,085 jobs gained between January 2006 and January 2007, become an angry exploding red dot, with 24,885 jobs lost between January 2007 and January 2008.

Laying People Off

The president of Georgia Perimeter College sent an e-mail to all faculty and staff last week regretfully announcing that the Continuing Education and Corporate Education division of the college would be closed and staff of that division laid off. More lay-offs will surely come, especially if Governor Perdue's task force, "Tough Choices or Tough Times," has its way in merging community colleges with technical colleges, a move that would surely cut many positions in community colleges as well as have other detrimental effects. (Ridiculously, Georgia Perimeter College, with its enrollment of 23,000 students, would be absorbed by a technical college such as Dekalb Tech, with its 4,000 students.)

Blogging on Huffington Post, Nanette Lepore, fashion designer, tearfully dismisses her staff as she cuts back on her business and regrets so blindly enjoying the high life during the boom times: "Why did it come to this? Where were our leaders? Why weren't enough people questioning this falsely inflated boom? Why did we all decide luxury was an entitlement?" Well, Nanette, while I appreciate your sympathy for the young staff members you wish you could keep, many of us don't live in luxury; nor do we think luxury is an entitlement. We just want to have meaningful work, to make enough money to support our families and to put our kids through college, and to enjoy the fruits of our labor in retirement. Now, according to the Georgia Department of Labor, Georgia's unemployment rate is 9.3%. I suspect it will get worse.

Me, Too

Updated Links Below

The AIG bonuses are outrageous, but I agree with Kevin Drum, especially with the passage that I've underlined:

I don't, frankly, care all that much about the AIG bonuses. The only reason AIG isn't in Chapter 11 is technical (they're too big to fail!), so morally I don't see any reason not to treat them as if they were in Chapter 11 like any other failed company. That means employees stand in line for their bonuses along with all the other creditors. On the other hand, this whole thing really is small potatoes in the grand scheme of things, and Tim Geithner and the United States Congress have better things to worry about.

But the culture that brought this on? That deserves to be dismantled brick by brick. I may not care much about AIG, but if it's the spark that finally gets Americans to take the executive comensation racket seriously, then hallelujah. If it's not, then it's just a carnival sideshow. "Bonus Babies," posted March 19, 2009, Mother Jones.

Update: See, here are what people smarter than I are saying--and I agree:

Matthew Yglesias' post, "Should We Fear an Exodus of the Talented from Insolvent Financial Firms," posted Friday, March 20, 2009.

Kevin Drum's post, "Indispensable?," posted Thursday, March 19, 2009.

The Real Scandal

I've not written a lot about the economy and the bailouts of financial institutions mainly because others have posted much more lucidly than I could on the economy. The financial failures and bailouts are so complicated, such a mess, that it's all rather mind-boggling to me. However, I did learn quite a lot by reading an article that I think Steve Benen linked to on his Washington Monthly blog. Because I didn't have time when I first saw the link, and because I really don't like reading long articles online, I printed the article and read it a couple of days later. Then I recommended it to Tom and Mary-Margaret. Not only does the article explain the craziness of the world market before everything crashed--as illustrated by financial behavior in Iceland--it's also an eye-opener about gender roles in Iceland. And, despite its depressing story, financial disaster, it's rather entertaining, too. See it here: Michael Lewis, "Wall Street on the Tundra," Vanity Fair, April 2009.

Less entertaining, but to the point, is Robert Reich's post on The Huffington Post: "The Real Scandal of AIG," posted March 15th. Online news sources and blogs have been headlining the latest scandal at AIG, the over $165 million bonuses the bailed-out institution (which received over $170 billion in taxpayer money) is paying executives, with most of that money going to the Financial Products Unit that was instrumental in causing the company's huge losses. Here's the last paragraph in Reich's post :

Apart from AIG's sophistry [the company's argument that it is legally bound to pay the bonuses and that it must also do so to retain "talent"--the very "talent" that caused the company's problems] is a much larger point. This sordid story of government helplessness in the face of massive taxpayer commitments illustrates better than anything to date why the government should take over any institution that's "too big to fail" and which has cost taxpayers dearly. Such institutions are no longer within the capitalist system because they are no longer accountable to the market. So to whom should they be accountable? When taxpayers have put up, and essentially own, a large portion of their assets, AIG and other behemoths should be accountable to taxpayers. When our very own Secretary of the Treasury cannot make stick his decision that AIG's bonuses should not be paid, only one conclusion can be drawn: AIG is accountable to no one. Our democracy is seriously broken.

Oh, and I have also followed the Jon Stewart and Jim Cramer/CNBC tempest. We usually watch Jon Stewart the evening after the original broadcast. (I'm the only one who is willing to stay up to 11 p.m. on weeknights, so we catch the re-broadcast at 9 p.m. the following evening.) I knew Jon Stewart's interview with Jim Cramer had hit the bigtime when the Lehrer News Hour covered the story in one of its 10-minute segments.

Update, 7:30 a.m. March 16th: Make those bonuses $450 million! And here is another reaction to the bonuses at AIG: "More on Bonuses at AIG," posted by Hilzoy at Washington Monthly.