The talk show “On Point” on Boston’s NPR station WBUR has a must-hear hour on Goldman Sachs & Co.. The springboard is investigative reporter Matt Taibbi’s exposé, “The Great American Bubble Machine.”
[audio:http://www.bu.edu/wbur/storage/2009/07/onpoint_0721_1.mp3]
(Note: I’m hot-linking this audio from ‘BUR, and it isn’t on my server, so it may disappear.)
Taibbi rips apart the understandably defensive, but ludicrous, arguments put forth by Goldman Sachs consultant Charles Ellis, who claims to be outraged by the excesses of the market — yet he insists the blame lies with government regulators and complicit consumers, but not the banks. I feel that Ellis and his ilk deserve to be treated with ridicule, condescension and derision.
Taibbi also tears into President Obama, for paying lip-service to an end of lobbyist influence and bonus-driven business as usual on Wall Street. I’m becoming increasingly disappointed with Obama for what he isn’t doing, in contrast to Bush, who I hated for what he was doing.
I think our Founding Fathers would be shocked if they saw how America operates today. (Not that they were perfect angels, either.) I agree with your comments, Doug. Your link above here, chronicling the history of the Glass-Steagall Act to prevent conflicts of interest in the financial world, is an excellent reference..
Yeah…Sigh. Glass-Steagall. And I thought of the uptick rule, too. I say let’s bring ’em both back! AND put some kind of cap on executive compensation as well, because we’re really going back to the Robber Baron era these days. Throw whatever protective measures we can against the wall. See what sticks, and for how long. But let’s remember not to rely on it, because our country has a history of dismantling legislation previously passed. Whatever we can do, though – however temporarily,- is better than NOT doing anything, that’s for sure!
Wall Street will never clean up. There’s just too much money and too much greed involved. After the Enron scandal came out, did the finances of big business change? No. It’s like people cheating on paying their income taxes. The IRS can catch some of it, but it can’t possibly eradicate it. A lot of stuff simply flies under the radar.
One of the best suggestions I’ve heard is for bonuses to be paid to whistleblowers, when their work results in actual convictions of financial criminals. A lot of these guys in government jobs either came from the same private industries they are now supposed to police, or might be going into them in the future. So they can be a bit torn. And as it stands now, the government guys are paid the same, whether their investigations result in catching criminals or not. Whistleblower bonuses could be paid out of the fines slapped on the companies or financial institutions, so it wouldn’t have to cost taxpayers anything. Sure, this strategy too could be abused, because people are endlessly creative. Nothing is perfectly fail-safe. But I think it could merit the spaghetti test. Throw it against the wall and see if it sticks.
Excellent blog entry, and comments. Helps put the whole thing in perspective. Fantastic comment, Lizzie! Barky is not stepping up to the plate, except for that silly photo op pitching the ball (and he was wearing “mom” jeans to boot! 😉
The repeal of Glass-Steagall was a huge mistake, and it came on Bill Clinton’s watch. But with the backing of Greenspan and Rubin, there was no preventing it:
http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html
The free market that capitalists praise with such zeal is, for them, free to be manipulated. And where’s the risk of capitalism if the guys at the top who got us into this mess can get huge government-backed bonuses? This must stop. I’ll make up a number — a $2 million cap on executive compensation. How’s that sound? Or bring back Glass-Steagall.
The cannibalization of America. Losing our moral compass is how we got here. We need to get down to the very basic roots of greed, and of “me first and the hell with everybody else.” But we won’t, as a nation or as a world. We can only do our little part to work with our own corner of the universe.
Specifically, at rock bottom, there’s the conflict between whether American elected officials vote their conscience – assuming they have one – or vote according to the wishes of their constituents, or special interest groups who support the elected officials. For example, an elected official may know that a mililtary base in his/her district is no longer necessary, and should be closed. But it’s good for the local economy of his district, and a significant portion of his constituency therefore wants to see it remain open. How should he vote? And how do we, the local constituency, WANT him to vote – in favor of our district, or the greater good of the nation? If we want what’s good just for us, then let’s face it: we are in favor of pork barreling.
As for lobbyists and special interest groups, a lot of us would say we’re against that kind of influence on our elected officials. Unless, of course, it happens to be a program we want. Cut a program in order to save public dollars? Great! As long as it’s not a program that I AM hot on continuing. Raise taxes? Great if it’s not MY taxes, just somebody else’s taxes who is richer than me.
We can’t have our cake and eat it too. What’s more important? What’s good for the nation, or good for me? Why is it so hard to realize that what’s good for the nation – or the world – in the long run is good for me, or my grandchildren?
But what that means is some sacrifice or pain for us as individuals, in order to further the greater good of mankind. Gee, I thought that’s what Christianity in ACTION was supposed to be all about, to name just one of the world’s great religions. What about “pick up your cross and follow Me”? What about The Golden Rule? Now there’s stuff we pay only lip-service to!
We can take the moral high ground, but of course nobody ever promised that life would be fair. In fact, besides death and taxes, we can pretty much also count on life NOT being fair. So we gotta protect ourselves too. But trying to do that by abandoning the moral compass doesn’t work.
Personally, I think any amateur who invests in individual stocks is kidding himself. There’s no way it’s a level playing field. Wall Street will never reform completely or permanently. New laws passed now will eventually get repealed or amended to gut them, or government oversight will become too lax. And sometimes the excesses are so complex and onvoluted – like the subprime mortgage bundles – that nobody totally understands them. Even Alan Greenspan said he didn’t fully comprehend those toxic subprime mortgage bundles.
I won’t even invest in index funds, because I’m not comfortable with no fund manager “minding the store.” I try to look for fund managers who are conservative and have a portion of their own personal assets invested in the same funds they manage. And then I just hope I’ve chosen well enough, and monitor what’s going on with the funds. Nothing is fool proof, of course, and there are no easy answers out there. If there were, we’d all be rich.
It was refreshing to hear an intelligent dialogue here on NPR radio, with various points of view represented. And no shouting matches!