Dear Friends,
It seems to me that, to be amazed that the people who visited the financial crisis upon us are being given fat bonuses again, is foolish. I mean come on. Most Fifth graders know that you reward that which you want more of and punish that which you want less of. (They might not say it in the same way).
The same people who were on the board of directors and senior management of Leman Brothers, Merrill Lynch, Citicorp, etc… are on the board of directors and are senior management of the modern incarnations of these companies. They have not only, not been punished, for their corruption and/or foolishness, they are being rewarded handsomely. No group more than the politically connected. They have been slid into government jobs… Despite tax problems.
The people who are being punished are stockholders, bond holders, IRAs, pensions and workers who have lost their jobs. Not to mention tax payers and businessmen. Everyone BUT the people who are responsible. Retirees savings have been savaged. People who are getting ready to retire need to start over. The list of innocent people who are being burned by this politically generated, government sponsored, financial fiasco goes on and on. You and I are the ones being punished.
The most glaring example of the wrong people being rewarded is the SEC is being given more power? They were totally inept at everything regarding the meltdown! Inept is the most generous term to use. Their ineptitude was grandiose and shone like a billboard on Madison Avenue in the Madoff case. They did nothing leading up to the meltdown to protect banks, lenders, investors, taxpayers or anyone else they are charged with protecting. Instead they protected the people they were tasked to regulate. Market capture to the nth degree.
But as usual government ineptitude is being rewarded with more power. Another fiefdom is born. More bureaucracy to help support the foundation. Ironic in that it is usually the foundation that supports the roof. The SEC is supposed to get all kinds of new powers and more money. No way that could go wrong… Give more power and money to people who have proven themselves to be totally inept. Government is nothing but the Peter Principle.
So what are the lessons? To invest in markets is foolish because it‘s a rigged game, and only the politically adept are insured, (no matter how corrupt). And, to act in a way that could possibly bring down the financial system, as we know it, is still no big deal… The government and paid for politicians will protect them. The incentives are obvious. I would think they speak for themselves.
Apparently, We, through our politicians want more corruption in business. We want government deciding who wins and who looses in business. We want the government to protect the rich and powerful at our expense. And we are willing to turn a blind eye to ineptitude and outright corruption in our government. I am certain that our politicians will deliver on those promises!
But back to how can anyone be amazed. So how is it possible that the president of the United States is offended that his friends are being themselves? He was instrumental in setting up the incentives. I am sure he is as smart as a Fifth Grader… Or could it be politics?
