"Simon Johnson's comparison of corporate financiers with Russian oligarchs has justifiably attracted attention. ... When a group becomes too rich and powerful, it can wield influence over politics and over commerical activities in which its members are not directly involved. The effect is to enhance that wealth and power. This process is likely to end in political and economic crisis. That was the history of royal courts across Europe, from Versailles to St. Petersburg. More recently, it has been the experience of many developing countries and transitional economies. ... Dukes and cardinals, oligarchs and financiers, fixers and traders become very wealthy not by virtue of their talents but as a result of the position they occupy. Legislators and the heads of large corporations readily come to feel that their functions deserve similar recognition. We may be relaxed that some people do become filthy rich, but we should not be relaxed about how they become so or how they behave once they are. Few people quibble about Bill Gates' fortune, although they may occasionally think that $50bn is rather a lot. They see the evident benefits of the personal computer revolution that he helped to bring about. ... It is difficult to think about bond salesmen in the same way, as it was difficult to feel positive about the hangers-on at the court of Louis XVI. ... Historians would find much that is familar in today's developments. In Washington, the young, fresh King Obama finds his economic councils filled by representatives of the same interests who advised his predecessor so unwisely. ... Only if the anger of the populace grows large enough, or the resources of the state are exhausted, does a counter-coup provoke change. Breaking the political power of the financial services industry will not happen easily. ... When the New Economy bubble burst in 2000 ... [m]inor courtiers were executed but the essential power structure remained. But, as Louis XVI learnt as the guillotine fell, the longer reform is delayed, the bloodier the revolution. And the more unsettled and chaotic would be the eventual outcome for us all", my emphasis, John Kay at the FT, 20 May 2009.
Llloyd Blankfein, here's my advice: take your hundreds of millons off the table, now. Then liquidate Goldman Sachs (GSG). You may live to 100. Insha Allah! Kick GSG's traders out. Now! In my 2 May 2009 post I noted GSG's David Viniar noted its dedication to public service. Create a South African-style "truth and reconciliation" commission. Thomas Jefferson opposed creating corporations, believing them tools of oppression. The kings of England granted various "monopoly" charters, like that to the East India Company. Just like we do with our 36 Treasury paper broker-dealers, and NRSROs Big 87654 CPAs, etc.
7 comments:
It's amazing. My friends who wouldn't have known the difference between the health industry and the financial industry can know talk knowingly how Wall Street packaged CDOs and shopped the credit rating agencies and sold toxic trash to Australia... and no one thinks it's ended because Bear and Lehman failed... now they wonder how Wall Street is manipulating the price of oil through the futures markets.
And they finish with... "and these are the guys that are overseeing my retirement?"
Keep at Mr. Blankfein... hire some more PR guys... lipstick... lipstick for the pig...
Anonymous:
Eventually they will storm the Bastille. Wall Street, which has a potentially useful function, i.e., capital allocation, has cleaned the public's clock for years. Under Democrats and Republicans.
IA
Good post and good advice. We might want to extend that advice to a few more people in the financial sector and CEOs of big Corps in general.
I am wondering if society needs to make a very clear statement here, that those guys are not on an acceptable branch of human development.
Alexandra:
How well named you are. I would prefer these guys go quietly, lest they meet the fate of your namesake, Alexandra Feodorovna, executed by the Bolsheviks in 1918. As well as Czar Nicholas and her children. Wiping out the Czar and his family ended that "branch of human development" in Russia. It would be nice if we don't have to go that far in the US.
This is just a symptom of the larger problem of a broken social contract.
and how will the revolution be carried off? FEMA is practicing martial law this summer with "National Level Exercise 09" (see http://www.fema.gov/media/fact_sheets/nle09.shtm).
a new dark age of corporate/fascist feudalism is very possible
I think the uprising by hoi polloi begins this summer, when California and other states and cities begin cutting off services and transfer payments and laying off workers.
Yep, if Ahhnold is forced to cut off welfare beginning in July -- and he will be forced to, unless Obama bails out California -- I expect small scale riots to begin shortly thereafter.
How to fight FEMA? Not too difficult: don't fight them, just withhold taxes and engage in similar forms of civil disobedience.
This corrupt system will come crashing down as tax revenues continue to plummet (May's Federal tax receipts come out tomorrow, and should be 'lovely') and the Chinese, Japanese, and sheikhs fail to increase purchases of Treasuries.
The end is near, coming this summer and fall, seems to me.
JG:
There was a recent Sacramento Bee article on the possible end of welfare in California. We will see. I have learned never predict when something will happen. I have been wrong by years.
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