You know, socialism as in corporate tax breaks, CEO compensations that bear no relationship to what those guys actually do—or more appropriately, don’t do. Richard Fuld of Lehman Brothers took home half a billion dollars since 2000, according to transcripts of the Congressional hearing held after the firm’s collapse.
Shouldn’t Fuld have known how to avoid plunging the country into the biggest financial crisis in a century? With that kind of pay, I would have expected him to know a lot more!
Why do the Joe Sixpacks not mention names like Fuld and Martin Sullivan—the ousted chief of AIG—when they shout “Kill him!” at Sarah Palin’s rabid rallies? Why do they shout “Kill Obama” instead? Is it because his name rhymes with Osama? I know some of them are dyslexic, but come on!
How come middle America is not rioting in the streets, demanding to get its money back from these corporate rogues?
If middle America believes that government intrusion in business is bad, and wants to chant the capitalist mantra of “Let the market decide,” instead of “Om,” how come it doesn’t mind handing out subsidies to farmers year after year?
Or is it that government is bad only when it comes to helping the poor, the young, and the disabled, but good when it comes to corporate welfare? That will explain why the same Joe Sixpacks are not rioting against Hank Paulson even after he came up with the biggest government handout ever passed as a single piece of legislation.
Why has socialism become a dirty word? Or do people not know what it actually means?
Why is that even with the 24-hour news cycle, we don’t know how many houses were foreclosed as a result of sub-prime lending? Why don’t we know how much the mortgages were worth? How come columnists like Paul Krugman, our newly minted Nobel Laureate, don’t tell us such statistics? Is it because they think people would be bored by them? How come the banks, with today’s powerful computers, say it is too complicated to come up with these figures?
Why is it that, even though American economists win Nobel Prizes year after year, none of the geniuses have the foggiest idea why the world financial system is collapsing?
Now, I am no economist, but I have my own theory about the collapse. A columnist named Floyd Norris wrote last December that the mortgage defaults could be higher in value than the mortgages themselves, to which Krugman replied, “On the face of it, that makes no sense because at least some of these loans will be paid back.” Exactly!
Since I am a believer in back-of-the-envelope calculations, I looked up recent foreclosure activity, which amounted to about 2.4 million houses in a 12-month period. That is a lot, but even if you assume a median mortgage of $200,000 for each home, you only get $472 billion, which is less than the $700 billion check we just wrote to Paulson, and far less than the “over a trillion dollars” ultimate bailout cost that some economists have predicted. Experts explain the difference by saying that the mortgages snowballed to higher amounts through complex instruments like derivatives and credit default swaps changing hands multiple times.
But could it be that every time these “instruments” underwent a mutation and changed hands, investment bankers creamed huge fees off the top, so that by the time the loan had exchanged hands 10 times, the cost of financing a house had perhaps doubled even as the value of the house was falling? The brokers and traders and CEOs probably took fat fees home. The people at the top of the food chain probably squirreled away huge amounts in Swiss bank accounts, making themselves immune from government action. The only evidence I have to support this theory is the simple fact that unless they were making huge profits off these deals, the investment bankers wouldn’t have come up with such complex transactions in the first place.
Why is it that even after the initial bailout bill failed, Paulson did not acknowledge that without helping the mortgage holders themselves, no bailout plan would be successful?
Are we not getting answers to these questions because, unbeknownst to us, knowledge, education, intellect, logic, intellectualism, eclecticism, articulateness, and cultural sensibility have suddenly become “elitist” liabilities? Did we not get the memo that stipulated that ignorance, stupidity, crassness, inarticulateness, and lack of culture are from now on to be considered as criteria for assuming the highest offices in the world?
On that subject, why does Sarah Palin parade her pregnant daughter at her rallies? Does she want to send some sort of an illogical message that abstinence should be promoted even though everyone knows it never works? Or does she want to drive home her belief that logic is an elitist luxury that our leaders and population must avoid at all costs?
Why do conservatives oppose abortion when they don’t give a hoot about the people whom its availability affects the most? Just think, if Obama is a “terrorist” according to Palin, what are the chances she cares about inner-city African American and Hispanic teenagers and their babies?
And why is it that Palin can see Russia from her front porch but cannot see the permafrost melting all around her as a result of manmade CO2?
And how come a large percentage of Hispanic immigrants are voting for McCain, even though the former POW has not said one word that would benefit their group in the slightest? Are they voting for McCain because he would be a great president or are they voting against Obama because he is black?
If McCain/Palin win the election, will we have to pay fines for talking in full sentences? Or will we simply be dismissed as “elitist?”
|Sarita Sarvate writes commentaries for Pacific News Service and KQED. A collection of her writings can be found atwww.saritasarvate.com|