February, 2009

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Subsidizing irresponsibility with stimulus and bailout

Friday, February 20th, 2009

David Brooks’ column in today’s NY Times (Money for Idiots) points out that these government bailouts and stimuli will necessarily end up supporting some of the most reckless while ignoring those who were responsible and prudent, but that it is probably inevitable.

This effort faces the same challenge as most government assistance. We want to provide enough help to keep the community from crumbling, but not enough to subsidize and therefore encourage irresponsibility. From there on it gets into definitions of responsibility and crumbling. The assistance has to have a price that is only a little better than collapse to keep it from becoming a subsidy for recklessness.

I do not want my neighborhood to become a sea of empty foreclosed houses, but there are limits on how much I can afford to keep it from happening before it becomes attractive to stop paying my mortgage too.

This is probably not a good time to wonder how we are going to mange all this national debt as the baby boomers come in to social security and medicare with IRAs and 401(k)s that were supposed to keep them comfortable, now worth a fraction of their value.
Seniors will be competing with youth for entry-level jobs in call centers and retail and giving an ever-larger portion of their pay to the government.

If you take the King’s shilling . . .

Wednesday, February 4th, 2009

Finally someone is going to lay done some reality rules for the firms that take OUR tax money bailout. The administration’s proposed cap on executive compensation is a good start, but also needs to address things like the infamous Merrill-Lynch executive suite remodeling and other extreme perks of the Marie Antoinette class of executive royalty that has driven many of our largest firms into ruin.

Despite what Rush Limbaugh and other entertainers will say, this is NOT undermining free enterprise. This IS the price of coming to the taxpayers with your hand out. Free enterprise means free to succeed and free to fail no matter how large or small.

The enormous salaries, bonuses and stock options are supposedly ensuring that firms can compete for the very best executive talent.  When we look at what these highly-compensated super executives have done to many Wall Street and automotive companies, it is hard to imagine how someone could have done worse. For some time now a variety of business/financial writers have been decrying the bloated compensation for top executives, regardless of their performance, but for the most part the stockholders of these firms were powerless to change it.

At least now the taxpayers won’t have to keep rewarding failed performance in this area and there is a chance that the stockholders may once again have some say.

“If you take the King’s shilling you must do the King’s bidding.”

Only the little people pay taxes – or apparently worry about the IRS

Tuesday, February 3rd, 2009

That seems to be the message we are hearing from Washington these last few weeks. If the “best and brightest” of the new administration’s nominees cannot be bothered to accurately pay their taxes we can only wonder about those passed over for consideration for a senior post in the Executive Branch.

Who would have thought that the “cleanest” one of the bunch would be Hillary Clinton. It looks like the White House needs to get the people that vetted HRC before her campaign to work for Obama’s team now.

And rememeber, if these folks had not been nominated to head an Executive Branch agency, they likely would never have paid the taxes that we now find were long due.

Surprise? – Banks sought foreign workers: AP Investigation

Sunday, February 1st, 2009

A recent AP Story, picked up by a number of outlets, details that lots of those giant banks that taxpayers are now bailing out have sought government permission to bring in thousands of foreign workers, even while they were laying off lots of American workers.

Why would they do this – because it is cheaper. If you can’t offshore the whole company, then bring in cheaper offshore labor and dump the US workers. These are some of the same giant banks that are pinging us with sudden jumps in credit card interest and incredible fees. Am I shocked and surprised that giant banks are behaving this way? No. Despite tons of public relations efforts from stadium naming rights to landscaping the public roads to anything else that will show banks as good citizens and neighbors, we are still talking about the business of usury. Banking is about one thing – MONEY. Whether you are talking about money changers from centuries past, or Potter’s Bank in “It’s a Wonderful Life” or Shylock from the “Merchant of Venice”, they are all fixated on money – or their pound of flesh in lieu of the money.

It is sad and disappointing that the very banks that came rattling their tin cups to the Treasury to save them from their own rampant greed were also going to great lengths to save money by bringing in foreign workers to fill jobs in U.S. offices while they were dumping U.S. workers. This is a the worst type of abuse of the whole H1-B visa program. This is way below bringing in scabs during a strike to keep the plant or mine running.

It is sad, but unfortunately not terribly surprising. It is the nature of the beast, no matter how much glitter or community relations they try to dress it up with.