Feeling the Pain

March 25th, 2009

I feel wiped out. And it’s not from the flu. It’s from the financial news. Several people I know lost their families’ life savings that were invested with Wall Street wizard Bernie Madoff. My bank, which has been on a buying spree of failing financial firms, was insured by AIG. Not long ago, the president of the United States—the one with a Harvard MBA degree—was urging Americans to switch from Social Security to private investment accounts. Yeah, sure. The only reliable income I have right now is a Social Security check.

The biggest problem with the current economic crisis—which may or may not be the worst since the last big one—is: Who can you trust? The state of New Jersey, which pays me a small stipend as a part-time college professor, decided recently to mandate that all part-time lecturers chip in a portion of their pay to an Alternate Benefit Program retirement account. Our choices of where that money is invested include AIG and five other firms that I bet no one in government, or anywhere else, knows for sure how they operate.

And now a new administration in Washington is promising to fix this economic mess by doling out trillions of dollars to the same banks and hedge funds who say they lost all that previous mountain of life savings and pension funds. And the new debt is to be paid for by taxpayers like me. Good luck.

I have a modest alternative suggestion. Let all the high-flyers on Wall Street work for $1 a year until they fix the problem that happened on their watch. And when they want to take a break, stop by a senior citizen center and commiserate with folks who get by on less per year than the Wall Street crowd paid for their yacht club fees.

(This article was also posted at EarthAirWater.)

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Categories: Economics, Politics | Comments (14) | Home

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14 Responses to “Feeling the Pain”

  1. Kevin |

    It seems to me that we are collectively stuck between the proverbial rock and a hard place. Our economic system has long since enshrined Wall Street as demi-gods to the point that their problems become everyone’s problems – such as we are living through right now.

    The short-term fix is obviously to make Wall Street happy. I believe the proper term is “confidence” or something like that. As their confidence rises, so too do the markets. It’s a tried and true formula.

    The long-term fix would be to declaw Wall Street so that it can’t hurt all of us every time it goes through an orgy of unhinged, unmitigated greed. But doing that would not be good for the confidence of… “The Market.” In short, we are being held hostage by reality.

    All of which explains why those on Capital Hill are pandering to the same banks, hedge funds and insurance giants that caused the mess in the first place. And recent signs are that the pandering is having the desired effect. But at what cost?

  2. Brian |

    Jan, if Wall Street fails, do you really expect that there will be any social security to collect? Wall Street can survive without social security, but social security (the government) cannot survive without Wall Street.

  3. Tom |

    I agree about the rock and the hard place. There’s no doubt that our free market economy (accepting that nothing is totally free) has made the U.S. the remarkable success story that it always has been. But it seems to have run off the rails, with lots of help from government, greedy Wall Streeters, ineffective regulation, and all the other ills that we’re beginning to understand. There are necessarily ups and downs in this kind of economy; let’s hope that this is nothing worse than another down.

    Once we get things back under control, I hope we have the sense to back the government out of the economy and leave in place more effective regulation than we’ve had in the past. Because that’s what we need—a regulated free market that can work for us without hurting us.

    And given the nature of the world economy, all other countries had better hope we can successfully deal with this problem. Like it or not, they’re going down with us, and for their own good they have to do what they can to help us recover.

  4. Kevin |

    Frankly, unless or until we can get a meaningful paradigm shift on campaign finance reform then I just don’t see us ever having a sufficient combination of sensible regulation and assertive enforcement to prevent this sort of catastrophe from happening again and again in our future. And the reason is as simple today as it was at the dawn of history – those with the gold make the rules.

    At the root, IMHO, is the illogical USSC ruling that money = speech. All the rest follows as surely and naturally as night follows day. And hackjob attempts at CFR such as McCain/Feingold are the best we’ll ever get until that illogic is redressed.

  5. doris |

    Kind of seems like any way we look at it, the foxes will always be watching the henhouses. Maybe there should be a way the non-rich can really vote for, and get to have a say in the Gov. regulations and bailouts. Novel idea?

  6. Brian |

    Kevin, the lobotomy box and radio ads, the billboards, and everything else have to be paid for by somebody. How will the media owners be compensated if they are required to air all of this stuff as PSAs? Who will determine who the “real candidates” are that are deserving of this free ad time? Another blue ribbon government commission?

    I have a strong suspicion that candidates like Bob Barr, Ron Paul, and the like would have had even less exposure than they did under a system like this.

    You are correct about “he with the gold makes the rules.” Unfortunately, I still don’t think you understand who it is that has all the gold. It isn’t the ABA or the NRA.

  7. Jan |

    All of this used to be academic to me. But I don’t recognize what’s going on over at Wall Street from the economics courses I took in college. Is there a course for Harvard MBAs and MIT computer wizzes in Greed 101? Ponzi Scheme 102? Blackmail 103? So I guess they learned this stuff in The Market. If it was up to the The Market, I doubt there would be anything left in this country for anybody else but the Madoffs. As it is now, they’ve ruined a lot of lives.

  8. Kevin |

    Brian, God forbid that anyone or anything should stand in the way of media owners wringing every conceivable profit from whatever situation presents itself, even if they do use the *public* airways to generate that profit. That is the same mind set which led to the present crisis on Wall Street.

  9. Brian |

    No, God didn’t forbid it, but the law certainly does. It’s called slavery. Requiring someone to work for no compensation was outlawed in 1866 by the 13th amendment.

    So I take it that you would use the coercive force of law to require them to provide a service for free. That’s even worse than what we have now. As a matter of fact, it sounds an awful lot like what used to happen in the old USSR (ever heard of TASS or Pravda). Don’t forget about the hundreds, maybe even thousands, of “little guys” employed (read as “getting paid”) by the networks themselves, never mind everybody else that earns part of their living providing these services. Even if the networks were deprived of profit, they still have to pay all of their employees to produce this.

    Since the media owners would have to do this for no money, should they require their employees to work for free to carry all of this as well? Where does it end, and what person gets to be authorized with all of this power?

  10. Kevin |

    So… you are opposed to Amber Alerts and the Emergency Alert System and indeed the FCC underpinning them.

    Just imagine the chaos that could ensue if we dumped the concept of public ownership of the airwaves – and the broadcast frequency licensing and regulation thereof – and it was just wide open for anyone to use any frequency they wanted. Firemen unable to communicate with the station because some corporate fatcat has a stronger signal on that frequency. Let the house burn! We could forget about cell phones and the whole array of remote control products/systems. Child abducters would get away much easier and let’s not forget how many more lives could be lost to tornadoes in the MidWest with the EAS having zero authority to warn anyone without paying whatever toll is demanded of them first.

    And if you want to play Strawman then I’ll see your TASS or Pravda and raise you one Benito Mussolini. Recess in half an hour and then milk and cookies during story time.

  11. Brian |

    Free political advertising is vastly different from Amber alerts and EBS, and I think you know it. And my examples of TASS/Pravda are not strawmen, and I think you know that, too.

    You want all of this pie-in-the-sky stuff, but as the saying goes, the devil is in the details. None of the things you want implemented can be done so without vast increases in the power delegated to the federal government. I think everybody gets it: you want a powerful, benevolent government run by humanitarians who see the world as Kevin sees it. It will never happen. Megalomaniacs are always drawn to positions of power, and your benevolent government will soon give way to something else. Better that government be small and weak and can harm no one.

    Too many cooks spoil the broth. So it is with government “ownership” of everything. When “everybody” owns, nobody is responsible for anything.

  12. Kevin |

    Either the media owner is being forced to provide a free service or not. I believe you referred to it as an unqualified: “slavery.”

    Having had your ideological prattle about “the coercive force of law to require them to provide a service for free” unmasked, now you want to move the goalposts, which you yourself installed, by parsing the context as if your previous comment isn’t right there for everyone to read for themselves.

    And if it somehow makes you feel more confidence in your ideological constructs to superciliously appeal to whether I prefer my pie in the sky or on a table then far be it from me to get inbetween you and whatever gets you through another day. But it still doesn’t change the fact that you’re glibly trying to move your own goalposts.

  13. Jan |

    I was referring to mulitmillionaires on Wall Street working for $1 a year until they fix the problem they created. During WWII, lots of patriotic exectives worked for the federal government for practically nothing, and soldiers weren’t paid much more. As it is now, how are laid-off workers and retirees supposed to ante up trillions of dollars in new taxes?

  14. Tom |

    Jan, you’re exactly right. I like philosophizing about politics as much as anyone, but the hard reality right now is the government is ginned up to spend an inconceivable amount of money to fix the economy, and maybe that’s necessary, but where the heck is it going to come from? Looking at the numbers, it’s painfully obvious that “taxing the rich” won’t raise enough money. Even if they went to $1 a year until the problem is over, that still wouldn’t do it, even though it would make us all feel better, I guess. What a mess.

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