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We've been focusing on a lot of extraneous issues, and we all know it.

Things like what Geithner knew and when he knew it. Or Bernanke. Or Paulson, or Summers. Or God knows who else. There is a huge outrage about the AIG bonuses, and quite rightfully so, since the majority of details about the financial meltdown have been kept out of the mainstream media.

Or who made what gaffe when, and what they really meant by it.

Or the importance of the words of Rush, Bill-O, Beck, Cramer, Santelli, Meghan McCain, etc...

Of course, a lot of the fake outrage has been on the part of those who were in fact surprised to find out that anybody would have been opposed the bonuses. We've been seeing a fair amount of cognitive dissonance lately.

Once in a while someone scratches the surface, like Jon Stewart, who in the end said to Cramer that it wasn't about him or what he had been doing. Well, actually it was, since it seems that Cramer's big deal was convincing large numbers of people to buy overvalued stocks that he was intending to sell short. If you had followed his advice, you'd have lost a bundle. If you had done the opposite, it would have made you rich. Does that make him incompetent, or a craven market manipulator who ought to be in jail?

But still, that's only a tiny part of the story, and the more we learn, the more we get mired in the details of the crimes we are uncovering.

What has happened is actually a sea change in how we view much about business, society, and social class.

Before the Reagan administration began to institute supply side economics, all businesses were basically considered the same. Look at a small business, in this case a proprietorship. The owner runs that business to make money, and the only way to continue making money is to keep it solvent. If he can't afford something, he doesn't buy it. Investing in a lot of equipment that will take years to pay it off may mean him taking less profit out of the business to live on. Borrowing money to buy something he can't currently afford would have to be weighed carefully against the cost of the borrowing and the potential benefits.

Years back, I was looking into starting a business, and had a few sessions with a consulting group, where I was told that the only reason to start a business is to earn a living for your family. Looking around, I could see where others had made errors that were fatal to the existence of their business by failing to understand that point.

Point in case: the restaurant owner who was in the business to make lots of wealthy friends and become known as a "star restaurateur", like the ones you read about in the magazines. She caused 4 restaurants to fail before her husband finally pulled the plug on her ambition. Last I heard she had gotten into real estate.

Corporations were run the same way as small businesses. They had responsibilities to their shareholders and their employees to keep the companies solvent.

But sometime in the past generation this has changed. The tax burden has shifted from the better-to-do to those who have much less, and the wealthiest among us have had their moral compasses snap. Greed fueled by a flood of cash has resulted in the limitless sociopathic greed for more money and power.

We now have two types of people and two types of businesses.

People are now divided into "Financial Wizards" and "Everybody Else". Financial Wizards are fundamentally different from Everybody Else. They earn their money not by providing products and services, but by speculation on speculation. They create wealth from nothing, or from wealth which is already created from nothing. Their value is in proportion to their risk-taking, so they feel the need to take ever more risks to remain god-like. Because of this they figure that taxes on their earnings or their wealth should not apply to them.  

In fact, no laws should apply to them at all. The way they see it, the honor system is good enough for Financial Gods and the "free market", the playground of Financial Wizards.

The rest of the population, those who work for a living, are considered to be "Losers" by the first group. As such, they should not only pay the entire tax burden of running the country, but they are fair game for the Financial Wizards who wish to steal what little money they have.

Businesses are now divided into the classical model, the "Solvent Business", and the new "Mega-corporation". Solvent Businesses should pay taxes just like working people. They are run by Losers. Solvent Businesses do not take risks, and it is risk-taking that catapults one to the level of Financial Wizard.  

Mega-corporations are the natural habitat of Financial Wizards. Rules simply do not apply to them. Mega-corporations are the ones that fit the description of "too big to fail", but basically the model they are run on is that they are "too complicated to understand", except for Financial Wizards.

Without Mega-corporations, Financial Wizards would not exist. They have nothing to contribute to the Solvent Business model. Financial Wizards understand that the primary purpose of a Mega-corporation is not to remain solvent and to make money for its stockholders. The primary purpose is to funnel cash to Financial Wizards, whether or not the bottom line of the company can tolerate this.

It's pretty simple. Two different groups of people who perceive two different realities. The problem is when realities clash. Obviously what we're seeing right now is people on Wall Street and on CNBC, in the Treasury, the Fed, the Oval Office, and the halls of Congress scratching their heads, surprised to have found out that the majority of people do care and don't think that there is no price too great to pay to keep the Financial Wizards on the case.

Financial Wizards are convinced they are under attack, and it is class warfare. After all, not only are they sure they deserve these things, but they are convinced it is not even a controversial concept. They see it as only right that incredible wealth should have been redistributed from the Losers to them during the past generation, as well as the money they stole fair and square from Losers who did not deserve to have it.

Class warfare it is. But the foot soldiers are the working poor, dittoheads attacking those who have just a little less than they do. They act on the behest of wannabe Financial Wizard suckups like Rush Limbaugh and Bill O'Reilly. The dittoheads have no clue that they are pawns. a mere distraction, and they have played a major role in causing their own misery by supporting politicians who have sold their souls at the altar of Financial Worship. They have been told that Financial Wizards are really just people who worked really hard for their money and should be permitted to keep it. They do not realize that the people they are fighting for are out to get them and see them as no different from the people they scapegoat—losers and easy marks.

These companies are too big to succeed. They have been failing all along and cooking the books to make it look like they were not. The path to renewal can only begin by breaking them up. Let the Financial Wizards find honest work.

Originally posted to Angela Quattrano on Fri Mar 20, 2009 at 06:31 PM PDT.


What should be done?

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Comment Preferences

  •  We need a Teddy Roosevelt ... (2+ / 0-)
    Recommended by:
    imabluemerkin, Angela Quattrano

    to come along and bust up these humongo companies. If they're too big to fail, then they're too big to exist. Break 'em up!

    We didn't become one of the world's leading nations by lowering ourselves. We did it by raising the world.

    by edg on Fri Mar 20, 2009 at 06:50:30 PM PDT

  •  Deregulation of the banks and giving (9+ / 0-)

    the rich trillions of dollars for over 30 years is the real root cause of the problems we have today.

    Top tax bracket in Eisenhower's time: 91%
    "                 " Nixon's time: 70%
    "                 " even when Reagan was first in office: 50%.

    The 'answer' is, in part is to tax the wealthy, fairly and progressively. No more companies making Hummers and luxury yachts. No more 50 million dollar a year "salaries" for ball players. No more conspicuous consumption.    

    During ALL 8 years of Eisenhower's term, married couples making $32,000 paid at 50%
    bracket, couples at $100K/year 75%.

    The money not taxed has been squandered on gross commercialism, waste, fraud and abuse. It's turned us into a nation that expects immediate gratification and fast food. America creates 25% of the world's pollution. We are destroying the whole planet, and everyone wants to be just like us.

    The problem is really us; the politicians just do what we ask of them, in a sick perverted sort of way.

    We, as a society, have to change our lives and what we value as worthwhile. Until we do, nothing will change.

    Fair, progressive taxation is a cornerstone of re-establishing lasting values. It's long overdue, after 25+ years of creating monsters, it's time to put them back in their cages.

  •  You have a valid point here... (8+ / 0-)

    The engineering software company I cofounded started out with university owned software. My partner signed away the rights to this software that he wrote, so we had to go through the Intellectual Properties Office to be able to license it commercially.

    Well, this was in 1996, and this office had just hired an Entrpenuring Synergy Champion (or some such nonsense). His first piece of advice was not to ever start a company without an Exit Strategy. When I told him we enjoyed working with this technology, he said that if we didn't change our attitudes, we would be "leaving our company for our children". This sounded good to me, but he meant it as a humiliation of our simplicity.

    So, business has become one big game instead of a way to make a living.

    I voted with my feet. Good Bye and Good Luck America!!

    by shann on Fri Mar 20, 2009 at 06:53:56 PM PDT

    •  Hence the Need for Steep Top End Taxation (3+ / 0-)
      Recommended by:
      shpilk, imabluemerkin, Mike Taylor

      As commented above.

      Heavy brakes on the top earners are not for "paying fair share" or "funding" stuff -- they're an utterly essential protection for society. It's a matter of public safety, national security in fact, to prevent ownership of society from concentrating among the rich.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Fri Mar 20, 2009 at 07:04:45 PM PDT

      [ Parent ]

  •  Great job Angela! (2+ / 0-)
    Recommended by:
    Mike Taylor, JG in MD

    Thank you! Really well written and the theme comes out like an anthem.

    The problem with the financial sector is just a different rendering of the problem in general in the United States: since Reagan, mental illness, delusional disease, has been transmuted into a kind of religion. It comes out everywhere — the rejection of scientific reality, the reintroduction of a many-times discredited economic model, the clinging to the completely delusional belief that the US is some sort of beacon, and the rest. It will take deprogramming to turn things around!

    "True peace is not merely the absence of tension -- it is the presence of justice." MLK

    by dhaemeon on Fri Mar 20, 2009 at 07:12:45 PM PDT

  •  I remember the Reagan years very well. (3+ / 0-)
    Recommended by:
    blueyedace2, Mike Taylor, bluegrass50

    the Reagan years lead up to the Daddy Bush years which lead us down the path of financial ruin in the late 80's and early 90's. During the Reagan/Bush years I worked for a Savings and Loan, and Charles Keating brought that industry down, putting me out of work, and puttin my family into  a difficult financial stituation. I remember Bill Clinton running for President and his "It's the economy stupid". It was the economy, I remember Bill Clinton in N.Hampshire hugging those out of work New Hampshirites and sharing their pain.
    Bill Clinton had his problems, but during the Clinton years, the middle class was able to pull themselves up from the Reagan/Bush years and feel as though they had a chance to regain some financial footing once again.
    The Bush history rewriters are all over the place telling anyone who will listen they inherited a recession from the Clinton years. Perhaps there is some truth in that, the dotcom bubble burst, but Bill Clinton left this country with a budget surplus. A surplus that G.W. Bush quickly depleted by giving tax breaks to his wealthy contributors. Bad enough, but it didn't stop there, he not only  gave them tax breaks, but free rein to whatever the hell they wanted. Many Democrats in both the house and Senate went along with the program, sure they tried to raise their voices, but when push came to shove what did they do, they went along with Bushes policies. Follow the money, the saying goes, with every piece of Bush approved legislation you can follow the lobbyist money trail, all that money didn't just go to Republicans, but to Democrats too. Favors were done and legislation was tilted towards the corporations. Jobs were shipped overseas, America stopped manufacturing, hell we even stopped telemarketing and doing telephone customer service, it was more cost effective to ship these jobs off shore rather than pay Americans to do them. The American model of business the diarist writes about evaporated into thin air, it was replaced by corporate greed, or greed of any kind. And today we find ourselves where we are, the average middle class American didn't do this, we just got screwed in the name of profits, and more profits. We lost our jobs, our homes, and our very way of life. I am sorry folks, but I don't think our President is sufficiently outraged. Perhaps on his next trip to California instead of going to preplanned town hall meetings and appearing on late night talk shows, he should take a tour of the unemployment offices where the out of work are standing in lines and waiting to apply for jobs. Or perhaps he should visit one of these "Bushville, tent cities, and see first hand where the country he has to lead really is. Perhaps instead of touring Iraq, or any other foreign nation, a Congressional delegation can wait with their constituents in an emergency room for health care they can not afford to pay for, and then they might see the need for Universal Health Care. Perhaps it might be a good idea rather than pretend outrage at a few dozen executives at AIG who are sharing $165 million dollars in bailout money, they might actually take note of how the rest of us are forced to live these days. Not to say those AIG folks deserve a penny of that money, but let's face it, with all the money they gladly gave to the financial industry with the never ending "bailout" One hundred and sixty five million dollars is but a drop in that bottomless bucket.
    It is funny, we all know exactly how we got here, it is only those in Washington who are puzzeled, perhaps you first have to admit to your addiction before you can cure it. It appears far too many of our lawmakers are addicted to lobbyist money, and since they can not break this addiction, they choose to ignore it.
    Last night President Obama told Jay Leno he was "stunned" by what happened with these bonuses. Stunned? While President Obama is simply "stunned", the rest of us are fucking outraged.
    I have to ask myself every single day is this the change we can beleive in. It doesn't appear to be the change I thought I voted for.

    •  "Taking responsibility" (2+ / 0-)
      Recommended by:
      blueyedace2, Mike Taylor

      is only the first step. Steps also must be taken to fix the problem.

    •  "Stunned" (0+ / 0-)

      I'm sorry to say it reminded me of all the Bush enablers who were "stunned" to learn that there were no WMDs.

      But, could he have known?

      •  I would not put Barack Obama in the same (0+ / 0-)

        catagory as anyone from the Bush team. However, the word "stunned", just doesn't capture what he should be feeling. It makes me wonder, what stunned him, the fact that his treasury secretary told him the news of these bonuses, or the fact that the provisions inserted by the treasury department in the Stimulus bill enabled these bonuses to be paid? How do you become stunned when the very same company after it received the first bailout money used a portion of that money to have a huge party at one of the most expensive hotels in Southern California. AIG was throwing our taxpayer money around like "drunken sailors" at that so called retreat.
        I work hard for my money and I resent paying taxes for a bunch of criminals to have a wild weekend in a hotel I can not even afford to walk into the bar and have a beer.
        I want President Obama to tell me just what was so stunning about this type of behavior from that very same company.
        I think for the past serveral days I have been stewing over this whole thing and tonight I have seemed to reach my tipping point. I hope I am over this rage by tomorrow, I don't like being so angry.

        •  "the Bush team" (0+ / 0-)

          I would not put Barack Obama in the same category as anyone from the Bush team.

          Are you referring to people like Hillary Clinton, Tom Daschle, John Edwards, Rahm Emanuel, and John Kerry as being "from the Bush team"? Not that I would argue the point if you are, but the term "enabler" is not used to denote those who do the deed, but those who enable them to do it.

  •  Money is writing the regulations/policies. (1+ / 0-)
    Recommended by:

    Even if we could break up every monopoly in the world, new monopolies will continue to form as long money is writing the laws/regulations/policies.
    Political "contributions"(bribery) are at the root of this crisis, along with all of the greed-sponsored public policy that led to this crisis.
    As long as we have a supreme court that essentially says money = speech, nothing will ever change and none of our problems will ever be seriously addressed.
    We must work to better educate the public of this fundamental flaw(legalized political bribery) in our system of "government". Once this level of understanding has been collectively reached, we must impeach and remove every supreme court justice who "fails to understand" the immorality of political "contributions"(bribery).
    Only then will there ever be any real hope.

  •  Are you kidding? (1+ / 0-)
    Recommended by:
    yoduuuh do or do not

    Let the Financial Wizards find honest work.

    These people know only one trick. They can't do honesty. It's either dishonesty or nothing.

  •  It's a democracy. (0+ / 0-)

    The root cause of everything is We The People.

  •  they never really take any actual (0+ / 0-)

    risks with their money, just with our money.

    Look at the S&L bailout (can you say Charles Keating-John McCain? Can you say Neil Bush?)

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