Socialized Capitalism

Socialized Capitalism
Posted on September 18, 2008 by katbur | Edit

I've had it. When are the American people too big to fail?

Whenever universal healthcare is mentioned, conservative Republicans start talking about Socialized Medicine. We can't have socialized medicine, we need to let the free market make the changes, medical care is not a right, regulation is the problem.

But now, if we don't bail out the greedy and dishonest mortgage industry the world is going into a depression and life as we know it will come to an end.

Suddenly we can have these same conservatives who have opposed regulation in any way begging for we measly taxpayers to bail their butts out. We can socialize investment firms, insurance companies and mortgage companies because of the decisions they made. And let's not forget. For quite a while they were making TONS of money making these decisions.

I don't know about you but I wasn't getting a check from Bear Sterns to pay my medical bills. I didn't see AIG coming to help put gas in my tank. I haven't been able to send my water bill to Fannie Mae, have you?

And yet through all of this the salaries and bonuses were more than many of us would make in SEVERAL lifetimes. For example, in 2006 Bear Stearns

Bonus Pool $10.2 $8.4 $9.7 $5.2 $2.6

Employees 25,647 54,349 55,300 24,775 13,000

Average Comp $658,946 $257,594 $291,139 $351,160 $338,462

Average Bonus $397,707 $154,556 $174,683 $210,696 $203,077
source: Bloomberg

This isn't a chart of lifetime earnings. This is one year. And anytime that a politician mentions the growing income disparity in this country they are accused of class warfare.

Do you know how we got to the place that we're in now?

After George W. Bush was "elected" President back in 2000 Phil Gramm dropped an amendment into the budget bill. The effect of this bill? Regulators could not have control over credit swaps. Things like taking a bunch of "sub-prime" mortgages and selling them as an investment to individuals and retirement funds. With this law the SEC (Security Exchange Commission) and the CFTC (Commodities Futures Trading Commission) or energy trading markets (Enron anyone?) were told that they could not investigate hedge funds or investment banks to be sure that they had the assets needed to cover the losses they were responsible for.

And it's not like we haven't been here before. The Savings and Loans crisis in the early 80's should have taught us something. The two primary reasons for the crisis? Deregulation and "imprudent real estate lending". Of course this would also lead to discussion of the Keating Five and I'll let you explore that yourself.

Here in North Carolina, mental health services were privatized. It has been a nightmare, a disaster for many of the citizens who need help. No one has come riding in and saving these people and making sure that they get the services that they need. No instead these people and their families have been hung out to dry. Services have been cut and private agencies have gotten rich.

The American people have been through hard times and have made it through. We'll figure out how to get through a crappy economy. If you explain to the American people that the choice is propping up the economy now and making their children pay the bills or pulling together through a time of struggle I am confident in what the people will say.

But. If I have to pay for their mistakes I want their cars and jets and jewelry. I want the CEO's pensions. I want to put these folks on a salary of $50,000 a year and let the rest of the money go to help the Americans that are suffering because of their greed. I know it won't happen but it doesn't make me want it any less. The article from Bloomberg discusses shopping for Ferraris and Bentleys with bonus checks. Well those cars haven't disappeared. Let's sell them on Ebay. Even if it didn't work for Governor Palin.