Laughing on the Outside
By David Glenn Cox
Winston Churchill once said, "You can always count on Americans to do the right thing - after they've tried everything else." The old boy had us dead to rights, as a nation we don’t learn and we don’t take advice. Churchill’s bromide could be applied to Wall Street as well with one slight alteration. "You can always count on Wall Street to do the right thing when pigs fly and chickens sing opera."
Wall Street is a one eyed monster that like organized religion hides by altruistic motives yet is responsible for a vast majority of the worlds suffering. Since it’s beginnings it has been manipulated and used by the insiders to pick the pockets of the unsuspecting rubes. Every economic calamity that has befallen this nation was born on Wall Street and suckled at the teat of the pliable public officials in Washington.
From the Knight’s Templer to the Black Hand these organizations swear a vow of secrecy to never reveal the secrets to the suckers. So what would you call a rat that rats out the other rats? There is no nobility in being a stooge nor benevolence in squealing on your compatriots especially when you do it with a smirk on your face. So who exactly is Jamie Dimon the Chief Executive Officer of JP Morgan Chase ratting out?
Dimon told Congress in January, The financial system experiences a crisis "every five to seven years" so by Dimon’s reckoning the next crash is due around 2015 provided of course that we ever recover from this one. It could be a stair step effect as each crash takes us a little lower without recovery. As it stands now there are two economies, one for investors flush with easy cash and one for everyone else with little cash, stringent credit restrictions and poor prospects.
Our new financial reform legislation promises to reign in Wall Street excesses. Just like a twelve year old promises to take out the trash...someday. The Dodd-Frank provision that brings back part of the Volcker rule to force banks to cut in house hedge funds won’t go into effect for twelve years! The Dodd –Frank bill requires 67 studies and 243 new rules to be configured or as Churchill put it, "The length of this document defends it well against the risk of its being read."
Rather than to actually regulating the banks the Dodd –Frank legislation signed into law last month asks pleadingly that the banks follow the recommendations of the Federal Reserve. So rather than an instant replay in the Super Bowl on a contested call they will instead call up to the owners sky box for a decision.
The Basil Committee is an international group of twenty-seven nations and their goal is to standardize world-banking regulations. With the idea that standardizing rules prevents one or more nations from attracting capital by means of lax regulation and attached chicanery. Would you like to take a guess which group of world bankers doesn’t like the Basil Committee?
The Institute of international Finance, an industry group representing more than 400 firms and they released a report in June that said the proposed rules would erase 3.1 percent of gross domestic product in the U.S., Euro region and Japan by 2015. The Institute of international Finance is a lobbying group made up of the 400 usual suspects and their plan is simple. Complicate, delay and water down until the recommendations of the Basil Committee aren’t slated to go into effect until 2018 if then.
Meanwhile the city of Chicago has leased the parking meter concession to Morgan Stanley Infrastructure Partners for $1.16 billion for seventy-five years.Immediately Chicagoan’s discovered that parking rates had gone up. Morgan Stanley is going to net $5 billion dollars on the deal and the citizens of Chicago will pay taxes levied by corporations because the city has also leased Midway Airport and the Chicago Skyway.
Just the other day Robert Rubin and Paul O’Neill said, that a second round of stimulus wasn’t necessary the economy was doing better all by its self. Then came this months economic numbers that proved them wrong. Unemployment up and wages rose two tenths of one percent and was the first rise in wages in a year!
Productivity was down in the new labor report and productivity is a funny number to ascertain. Suppose you have five clerks at Wal-Mart and each clerk rings up a thousand dollars in sales per hour. The manager sends one clerk home and the remaining four clerks ring up $1,100 dollars and hour that’s improved productivity. The company’s costs have gone down while profit and sales have increased but it’s a phony number. Then the manager sends another clerk home and the lines begin to back up and people begin to drop their purchases and go home.
When the line finds it’s equilibrium the clerks are only ringing up $900 dollars an hour and management is concerned about falling productivity. What’s wrong with those lazy employee’s?
I worked for a business that rebuilt industrial engines. Six mechanics working five days a week rebuilding engines. Things were getting tight so they laid off the shipping clerk his duties would be filled by the UPS clerk. After a month or so management expected that more engines should be completed each week. So the owner called a company meeting that began with, "Times are tough right now and we’ve had to let people go and if we don’t all pull together we’re going to have to let more people go."
It was a great motivation tool he could have just started with, "you guys suck!" But after his speech the boss opened the floor to suggestions, to a man the mechanics all said, "We’ve only got one crane, if someone is moving an engine to the test stand we have to wait ten or fifteen minutes to use the crane." Then someone added, I’m stuck because you only have one test stand and if they have a problem I’ve got nothing to do! I can’t start on a another engine because I can’t move the one I’ve got and if I do I’ll just have to put it all away if there is a problem with my engine. New crane or extra forklift $5,000, new test stand $10,000 the bosses solution was to lay another mechanic off.
Because the UPS clerk was unloading and loading trucks UPS shipment weren’t getting shipped out thus increasing the number of angry phone calls. The idle mechanics began loading outgoing shipments to help get the job done but when a mechanic dropped a $9,000 engine with the forklift management issued a new decree. "Only certified forklift drivers are allowed on company forklifts!"
No matters how many times management sawed on the board it was still too short!
Bloomberg- The productivity of U.S. workers unexpectedly fell in the second quarter, indicating companies may redouble efforts to contain costs as the recovery unfolds. The measure of employee output per hour decreased at a 0.9 percent annual rate, the first drop since the end of 2008, Labor Department figures showed today in Washington.
You see? It’s those lazy workers fault but Ben Bernanke’s got a plan!
Bernanke’s plan is to keep interests rates that banks pay low, very low, below the cost of lending low. Then it want’s to lower the interest rate on bank deposits and third to expand it’s balance sheet to assist troubled banks. Why it makes perfect sense to the Wall Street boys if the mule won’t eat shove money up it’s ass!
That’s why Jamie Dimon is smirking. He’s laughing on the outside and on the inside too! And he’s laughing at you and at me and at Congress and even the President because heads he wins and tails we lose. Jamie Dimon thinks he’s invincible!
"In fact, in these last four years, we have made the exercise of all power more democratic; for we have begun to bring private autocratic powers into their proper subordination to the public’s government. The legend that they were invincible—above and beyond the processes of a democracy—has been shattered. They have been challenged and beaten.
Our progress out of the depression is obvious. But that is not all that you and I mean by the new order of things. Our pledge was not merely to do a patchwork job with secondhand materials. By using the new materials of social justice we have undertaken to erect on the old foundations a more enduring structure for the better use of future generations.
In that purpose we have been helped by achievements of mind and spirit. Old truths have been relearned; untruths have been unlearned. We have always known that heedless self-interest was bad morals; we know now that it is bad economics. Out of the collapse of a prosperity whose builders boasted their practicality has come the conviction that in the long run economic morality pays. We are beginning to wipe out the line that divides the practical from the ideal; and in so doing we are fashioning an instrument of unimagined power for the establishment of a morally better world.
This new understanding undermines the old admiration of worldly success as such. We are beginning to abandon our tolerance of the abuse of power by those who betray for profit the elementary decencies of life."
Franklin Delano Roosevelt’s Second Inaugural Address
"I see millions of families trying to live on incomes so meager that the pall of family disaster hangs over them day by day.
I see millions whose daily lives in city and on farm continue under conditions labeled indecent by a so-called polite society half a century ago.
I see millions denied education, recreation, and the opportunity to better their lot and the lot of their children.
I see millions lacking the means to buy the products of farm and factory and by their poverty denying work and productiveness to many other millions.
I see one-third of a nation ill-housed, ill-clad, ill-nourished."
Franklin Delano Roosevelt’s Second Inaugural Address