Economy

It’s A Small Crime

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Unless public money is used on a very temporary basis to achieve an orderly wind-down or merger of Bear Stearns this is another case where profits are privatized and losses are socialized. By having thrown down the drain the decades old doctrine and rule that the Fed should not lend or bail out non-bank financial institutions the Fed has created an extremely dangerous precedent that seriously aggravates the moral hazard of its lender of last resort support role. If the Fed starts on the slippery slope of providing massive liquidity support to non-bank financial institutions that have recklessly managed their risks it enters into uncharted territory that radically changes its mandate and formal role. Breaking decades-old rules and practices is a radical action that seriously requires a clear public explanation and justification.

I agree. Let me ask a couple of questions here.

Does Bear Stearns have a big screen TV?

What about bling? Any bling they could sell?

Couldn’t Bear Stearns just get a job, already? I mean, I know of six or seven places that are hiring. I don’t know what they pay, but surely it would be enough to keep them in sneakers and Xbox games.

I mean, just last week I heard that when we bailed out the airlines, jewelry sales at Wal-Mart went up 1400 percent. I didn’t see it myself, but my cousins told me they heard it from somebody who knows somebody who works there, and it was like Christmas morning when those government checks cleared. What can you expect, really, from people trained in government dependency, I guess, but it still pisses me off, because that’s my money. Fucking leeches.

Let me ask those questions, those questions we ask of every beneficiary of the smallest drop of government assistance. Let me ask why this is the ONLY scenario in which our parsimonious bullshit about personal responsibility, about choices and consequences, about “survival of the fittest” and other forms of sicko math, need not fucking apply.

Let me ask just how the unholy fuck it is that we can quibble every single day for hours over lunches that would feed a small village for a week about the ten dollars a year we give to some social program and how it’s going to waste because somebody fed us an anecdote about somebody somewhere faking their need. Let me ask just how the bloody fucking blue hell we can get all worked up over how the homeless people downtown don’t deserve our pennies because one of them said something rude to us on the way out of a store, and how they’re just gonna spend our 65 cents on booze and then pee on the stoop. Let me ask how on earth we can take all the time it takes to think up all the ways we think up to sit in judgement on every individual case we hear about, about how that person just didn’t work harder, didn’t suffer enough, didn’t earn “our” money, didn’t deserve “our” charity, didn’t bleed in front of us enough, and all the while, all the fucking while, we give it away by the millions and never ask where it goes. All the while.

Let me just ask. I’m sure somebody out there has the answer. After all, they had reasons why Katrina victims deserved to drown and die, be forced from their homes and screwed by their insurance companies and disregarded by their country. They had reasons why uninsured children didn’t deserve health care, why those who died from a lack of medical attention only got what they had coming. They had reasons why the people who came to emergency rooms were just looking for drugs, they had reasons why thieves got rich and saints got shot, they had all kinds of explanations for everything that looked to everybody else like a fucking problem we needed somebody to solve. I’m sure the answers here are just as simple, just as easy.

But I do think we should ask. And you know, I think we should ask in the same condescending, fuck-all-you-peasants know-it-all bullshit fuck-ass tone that we use when requesting that the rest of the nation’s needy prove their legitimacy to us. I think we should ask with the same nasty assumptions at the back of our throats, the same willingness to believe that somebody else is running a scam on us to get a fat government check, the same nasty, mean, small little pinchingness we use toward individual human beings. I think we should ask those questions.

I mean, for all we know, maybe Bear Stearns has a big ol’ diamond cross they could sell, to pay their own damn way.

A.

29 thoughts on “It’s A Small Crime”

  1. I think that these are all good questions. And, like the Catholics who practice IVF. They have an answer.
    Because unlike the money given to poor people, this money is used to keep good jobs. Also they create wealth when it is working right.
    I think we need to have people USE those arguments and see if they are in fact real. Because they might not be. I want to see the NEXT step in this bail out. Personal responsiblity if they can’t prove that this 14,000 jobs and tax base will be saved.
    What also would be nice is to insert these question into the bail out WHILE IT IS HAPPENING. So that the people in favor of the bail out will have to make explicit the underlying story about why these people deserve it more than the people in Katrina.

  2. SPOCKO! Good to see your smilin’ name in print. Welcome back to the ‘tubes!
    This happened with the savings and loan crisis during Reagan and Bush I and with Enron and Global Crossing just a few years ago. The gov’t will always come to the rescue of those who give it the most attention and hard currency. These companies are the safety net of government whores (No Eliot, not whores supported by the government) who leave to go to the private sector. Keeping them fat, rich and happy is Bush Jr. number one job.
    Katrina, the CA fires, all of the real challenges that faced this government went unanswered and neglected. They involved real people, people who aren’t Pioneers and Mavericks, or can give thousands to support a slew of nasty lobbyists. Since these people can’t help Bush, they don’t exist. Bush looks out over New Orleans and sees open land that his friends can build hotels, casinos, and resorts. He can’t understand why anyone would object to a few fat, white guys making a fair bit of coin from the suffering of a few poor folks who lost everything anyway.
    I agree with Spocko, make these assholes answer the same questions and go through the same hell that Katrina victims did.

  3. That. Was. Magnificent.
    I’d like to force everyone in the world to have to listen to that rant spoken aloud with vigor in just the voice I heard in my head reading it.
    God, I remember when I used to write like that. I don’t know what your voice sounds like, but the voice I heard it in was mine.
    You have my awed admiration.

  4. Bravissima!!! I wish I could FORCE your rant to be heard and/or read to every stupid talking head on teevee, the entire wingnutosphere, and on the floor of the House and Senate. And I would add another question at the end, where will we get the money for the bailouts after we have spent it all on the wars?

  5. Sorry, Spocko — those 14,000 jobs are NOT going to be saved — Citibank already announced massive cuts last month… JPM buys Bear (what’s left of it) and will slash and burn the staff — easily 10,000 will be gone. And worse for them: just like Enron, the employees are HEAVILY invested in Bear stock!! So, they’re savings just got wiped out. And the buzz over here in London is Lehman is next…

  7. Very right on Athena, but I’ll quibble on a small point.
    It’s not privatized profits, socialized losses. Socialized losses would come with some sort of socialized gains for the investment. This is piracy.
    Krugman sez Bear Stearns apparently has

    …a particularly nasty reputation. As Gretchen Morgenson of The New York Times reminds us, Bear “has often operated in the gray areas of Wall Street and with an aggressive, brass-knuckles approach.”
    Bear was a major promoter of the most questionable subprime lenders. It lured customers into two of its own hedge funds that were among the first to go bust in the current crisis. And it’s a bad financial citizen: the last time the Fed tried to contain a financial crisis, after the collapse of Long-Term Capital Management in 1998, Bear refused to participate in the rescue operation.
    Bear, in other words, deserved to be allowed to fail — both on the merits and to teach Wall Street not to expect someone else to clean up its messes.


    These people are Bu$hie’s ba$e.
    These people are setting up a raid on the Treasury that may end up dwarfing anything we’ve spent on Iraq.

  8. That was wonderful.
    On a snarky note, who would buy Bear stock? Seems like a clear warning to me.
    Then again, I possess no advanced degrees, nor am I an economist.

  9. who would buy Bear stock?
    Well that question has been answered. At $2 per share who wouldn’t. JP Morgan scores a coup while the rest of us pay.

  10. God, I love you, Athenae.
    What scares me is how much liability Bear Stearns really has. You know it has to be colossal for them to be sold off at $2 a share when their headquarters building is valued at 1 BILLION. Jeebus. Their total value was something like $4 billion.
    Drunken hausfrau is right–there are going to be a lot of very unhappy Bear Stearns employees in very short order.

  11. And worse for them: just like Enron, the employees are HEAVILY invested in Bear stock!!
    Well, see, that’s their own fault. Everyone knows you shouldn’t invest in the company you work for, cause then you lose your job AND your 401K. /snark
    And that CEO of Bear EARNED his mega-million salary and bonuses, dammit, because playing bridge tournaments while your company is going bankrupt is hard, hard work.
    These people piss me off soooooo much.

  12. Bridge is hard work. It’s hard work, you know. Bear’s CEO had a choice – that’s hard work too – he could do the really hard job, putting forth his all to win a Bridge tournament, or spending his usual 2 hours on the job, looking for someone to save Bear. But, being a manly man he went for the hard work. He played Bridge, which is hard work. Let’s hope he got adequately compensated for his devotion.

  14. FromWikipedia: “Historian Gaetano Salvemini argued in 1936 that fascism makes taxpayers responsible to private enterprise, because ‘the State pays for the blunders of private enterprise… Profit is private and individual. Loss is public and social.'”
    Yeah, it’s a dangerous precedent. And hopefully shareholder lawsuits will make the management tear off and sell each and every diamond cross they own.

  21. Brilliant rant A. I think Keith Olbermann needs to channel you for one of his special comments.

  26. Nice. Thank you.
    As I understand it the rank and file employees of the company and it’s shareholders would probably have come out better through a normal bankruptcy, but the boss wanted to sell so as to limit his legal liabilities. I bet he is a proud and upstanding member of the party that touts “moral values”. Probably at least a “Pioneer” or “Ranger” for the shrub.
    Is using public funds to save companies from the errors of their ways fair? Of course. That is the fairest decision that money can buy.

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