Financial Reform

We’re Screwed

April 27, 2011 by Bitchy

Okay, we’ve been screwed for about thirty years now, but we got an indication of just how screwed we are this morning.

But the good news is that as we found out how very royally screwed we are, we also got an answer to a question that has confounded me for about a year and a half.

I’ve maintained for years now that our political parties are actors on the stage of political theater. We don’t have two parties that are on opposing sides. We have two parties that are beholden to precisely the same corporate interests. We have two parties that are designed to appeal to two distinctly different groups of people. We have one party that appeals to the authoritarian, “tough guy” and another party that appeals to the big thinker, “consider the big picture”. One party claims to be for the working man, while the other professes to tirelessly work to stay out of our lives. All of this is, of course theater. They’re both batting for the same team. One party is more shameless about who they’re working for, but make no mistake; democrats will take this country to precisely the same place that republicans will. They will just do it on a longer timeline. And along they way, I will give democrats credit for doing a few things for the American people, while republicans have done absolutely nothing for us for over thirty years. But at the end of the day, both parties are going to place the health and welfare of the corporations over yours every single time.

So the question with democrats is, “how big of a shill is my representative?” We already know that all republicans, with the exception of Ron Paul, are 100% shill.

Watching Obama acquiesce in perpetuity, to the point of absurdity had me wondering if it were possible for someone to be this bad at negotiation. Let’s review;

-He started off the health care debate by taking a public option off the table. Huh? Why not proclaim that anything short of a public option is a non-starter, and then back down slowly from there? But not our Obama! He starts in the middle and moves right from there. The end result was the Bob Dole plan from the 90s (subsequently the Mitt Romney plan). WooHoo! He got what republicans were willing to give eighteen years ago!

Republicans emphatically demanded that Obama cut 31B out of the 2011 budget. He releases a budget that cut 32B as his opening gambit. Was anyone surprised when republicans demanded he cut from where his budget started? He gave them more than they asked for as his opening move, and didn’t get any credit for that first 32B he cut. He then had to cut another 39B on top of that!

Be honest Obama supporters; if you were in the market for a new car, would you send Obama in to negotiate the price for you?

Honestly, he’s so fucking bad at this that it was becoming increasingly more difficult to believe that someone could suck at negotiating this much. I was honestly starting to think that he was the most wholly owned subsidiary of corporate America, that we’d ever seen in politics.

This morning, my question was finally answered. When Obama caved into the craziest among us, and released yet another form of his birth certificate, he definitively showed me that he just sucks at this. He’s the world’s most incompetent negotiator, truly.

He sent some very clear messages this morning. He told the world that there is no demand too crazy for him to acquiesce to. And there is no person too crazy for him to cave in to. He took off his shirt, and showed the world the tire marks on his back.

This weakness is about to fuck Americans like they’ve never been fucked before.Let me explain why this monumental display of weakness concerns me right at this moment in time.

Paul Ryan just came out with a budget plan that literally everyone, republican and democrat alike hates, despite the main stream media’s best efforts. Remember how they all used words like “courageous” and “bold” to describe the plan for the first week after it came out? It didn’t take long for Americans to figure out that this plan was going to fuck the old and the poor, for the sole purpose of making the rich richer. By Ryan’s own admission, his plan wasn’t going to balance the budget for forty years. Forty years? That’s at least five presidential administrations!

Republicans never intended for this preposterous plan to fly. I think they underestimated how big of a shit storm it would start, but they never really believed that they would pull it off. They made a tactical decision to open with the most draconian far right wing hand job they could, so that they could negotiate from there.

Obama had already demonstrated that he was going to start the negotiations from a right wing position when he appointed two well known social security haters to his debt commission. He was obviously planning on making cuts to social security and medicare. Given the birther cave-in this morning, I’m positive that republicans are now going to get way more out of Obama in terms of cutting those two programs than they initially imagined they could get. They would have to be in a halcyon induced coma not to seize on the spinelessness that Obama now openly wears on his sleeve.

In short, we’re fucked. We’re more fucked than we would be if Obama were merely being controlled by his corporate masters. Bill Clinton was obviously the most corporate friendly democratic president we’d ever had until now. Every subsequent democratic president was obviously going to slowly up the ante on the democratic party’s corporatism. This president predictably did, but he has no conviction. He has no conviction, and no hard deal-breakers. There’s nothing he’s not willing to compromise on. And even if he did have conviction, he doesn’t have the balls to stick to them.

He caved to the birthers. Enough said.

Sadomasochistic Voting

April 12, 2011 by Bitchy

I know I’ve been a little absent lately, but not because I haven’t been paying attention to what’s going on. I’ve been so completely stunned by the bullshit coming out of Washington, that I needed to form my thoughts and do my research. And boy, did I research!

I’m going to disspell every stupid fucking thing that republicans have said in regard to the budget over the past three weeks, and I’m going to do it without sharing a single opinion.

Ready?

The first thing that I looked at was states’ GDP relative to their corporate tax rates. The tax rates among states range between 0% and 12%. I was surprised to find that Iowa had the highest tax rate by far at 12%. The next closest state was Minnesota with a 9.8% flat corporate tax rate. Here are the top ten states with the highest corporate tax rates (for the purpose of this post, I used the highest rate in states that have tiered tax rates):

Iowa – 12%
Minnesota – 9.8%
Illinois – 9.5%
Alaska – 9.4%
New Jersey – 9%
Rhode Island – 9%
Maine – 8.93%
California – 8.84%
Delaware – 8.7%
Indiana – 8.5%

Then I looked at the states with the highest GDP:

California – 1847B
Texas – 1224B
New York – 1144B
Florida – 744B
Illinois – 634B
Pennsylvania – 553B
New Jersey – 475B
Ohio – 472B
North Carolina – 400B
Georgia – 398B

That’s interesting, the state with the highest GDP (by far) is also one of the states with the highest tax rates. In fact, three out of the top ten states for GDP are also on the list of states with the highest corporate tax rates.

So that made me want to look at the states with the lowest corporate tax rates to see what their GDP is:

Washington – 0%, 323B
Nevada – 0%, 131B
South Dakota – 0%, 37B
Wyoming – 0%, 35B
Texas – 1%, 1224B
Ohio – 1.3%, 472B
Kansas – 4% – 123B
Colorado – 4.6%, 249B
Michigan – 4.95%, 383B
Mississippi – 5%, 92B

That’s weird, only two of the states with the lowest corporate tax rates are in the top ten for highest GDP. And one of those two states is Texas, where the oil developed before the low corporate state tax rate did.

Why aren’t any of the companies that put California at the top of the GDP food chain in any of the four states with no corporate taxes? Paying less taxes is what creates jobs, right? Shouldn’t all the jobs be in Washington, Wyoming, Nevada, and South Dakota? Washington ranks 14th for GDP. Nevada, South Dakota, and Wyoming rank 36th, 41st, and 48th. Why are Wyoming and South Dakota so unproductive, given their nonexistent corporate income tax rates? Weird.

Another weird thing that stuck out at me as I was compiling this data, is that five of the top ten highest states for GDP are solid democratic states. Three are republican and two are purple. Six of the lowest states for GDP are solidly republican, while four are democratic. That’s going to be relevant further down in this post.

The numbers clearly debunk the bullshit myth that low taxes = job creation so let’s move on.

The next thing I looked at was per capita income in each state. Seven of the top ten states with the highest per capita income are decidedly blue states. The other three are solidly red. Of the ten states with the lowest per capita income, seven are solidly red, one is blue, and two are purple.

I found it interesting that the top and bottom earners have an inverse proportion in political leanings. That inverse relationship led me to look at some other statistics, which produced some fascinating data;

Of the ten states that spend the most on K-12 education, eight are blue, while only two are red.

Seven of the states that spend the most on K-12 education are in the top ten for highest GDP.

Of the ten states that spend the least on K-12 education, nine are red, one is purple, none are blue.

Only one of the ten states that spends the least on K-12 education even cracked the top twenty for GDP.

What does any of this have to do with the title of this post? I’m finally getting there. Look, you know when you live in a shitty place. When you’re in a poor state or a poor neighborhood, you know it. There’s are no illusions about your lot in life. The biggest difference between republicans and democrats is that republicans fundamentally believe that shitty is normal, and that there’s no such thing as a government that can change that. They believe that government will only fuck things up more. Democrats believe (despite overwhelming evidence to the contrary) that government exists to serve the people. And it turns out that democrats were right. I say were because all of that is evaporating before our very eyes, but that’s another post.

So why do republicans keep voting for shitty government? Because it allows them to be right in their belief that government blows and on a visceral level, being right is all you need. They expect government to blow, so they’re not let down when it does. They keep voting for people that offer them more of the same non-governance bullshit that keeps them poor and uneducated because they’re sadomasochistic. They’re sadomasochistic, but they’re right!

The data here is clear; the democratic way is better. It’s better for you because it’s better for your neighbor. When your neighbor’s kid has a shot at a good education and a bright future, they won’t grow up, having to resort to robbing and killing you in order to survive. It makes sense to tax corporations and the mega-fucking-rich because they use more taxpayer resources than you do. This way works!

There’s no fucking reason to vote for the “screw your community, it’s each man for themselves” platform, unless satisfying your sadomasochistic tendencies is more gratifying to you than watching your kid graduate for college is.

The budget cuts that passed this week are going to speed up our race to the bottom. Make no mistake, Obama made this happen. He backed himself into a corner when he agreed to extend the Bush tax cuts. And if you didn’t see this week coming when that happened, you just weren’t paying attention.

The most fucked up thing about this, is that Obama is turning me into a sadomasochistic voter. When 2012 rolls around, despite my best efforts in the primaries, Obama is going to be our nominee. And in November, I’m going to have to hold my nose and vote for him for one single reason; the supreme court. The only thing that Obama is going to do for me, is to appoint a non-whacko to the court.

And what’s worse than the forced sadomasochism, is that I don’t get to enjoy the upside that republicans get. There’s no satisfaction in shitty government for me. It’s all pain and no gain for bitchy.

I need to figure out a way to make this sadomasochism thing work for me. Does anyone have any advice they can give me? What type of equipment should I invest in? Nipple clamps? And when I cut myself, where’s the best place to do it? Any and all suggestions are welcome!

The Demon Earmark

November 11, 2010 by Bitchy

I’m already seeing a lot of coverage around republicans and earmarks, Rand Paul and earmarks, and [insert name here] and earmarks. I’m writing this post to beg of you, please put an end to this inane conversation. Please?

Anybody who is anti-earmark is lacking a fundamental understanding of how our government works. If you know one of those people, please forward this post to them because I’m about to break it all down for everyone.

I don’t know what you think you’re voting for when you elect a congressman or a senator, so I’d like to clear this up. You’re voting for someone who will bring home the federal bacon. Yes people, it is your representative’s job grab as much federal money as they can and deliver it to your state, county, or town. Why is this their job? Because it’s the only way that the money gets dispersed to local municipalities. If your representative didn’t pork up every bill that they could for you, there would never be any federal money going into your district, ever!

Here’s the deal; if we didn’t have the pork system that we have, we would have our house and senate voting on each local spending bill individually. Let’s use the senate as an example. When New York needs money to maintain the public transportation system, and the senate has to vote on whether those funds will be allocated to New York, we would have a situation where 98 senators who don’t don’t give two shits about New York would most definitely shoot it down. This is true of any project in any state. We would have a situation where only two out of one hundred votes give a shit about the project or need. Nothing would ever get approved for funding. In the house, this would be amplified by four hundred and thirty five. Only one congressman would support any given project, because it’s their project. Four hundred and thirty four other people don’t give a damned about your district or its problems.

I’m guessing that after a few dozen failed attempts at obtaining the votes needed to secure a representative’s requested funds, they would adapt, and the horse trading would begin. Okay New York, I’ll vote to give you public transportation funds if you vote to get my funds to maintain my local parks. See how that works? We’d end up in basically the same place we are now, except with much more complex deals being made to distribute the cash.

And on top of that, Americans would be made aware of every single vote. People in forty-nine and nine tenths of each state would be outraged by the passing of any bill. Why would I, in New York, give a flying fuck about subsidizing a corporation in order to entice them to open up shop in California? And within California, Los Angeles, San Diego, Fresno, Sacramento, and Oakland would all be outraged if that money went to Santa Barbara. You think you’re pissed off at they system now? Wait till you see what happens when you “clean it up”.

I’m not saying there isn’t a better way than earmarks. I’m saying that this is the only way we have right now to distribute funds for state infrastructure, parks, and transportation projects among others.

So please democrats and left wing press, don’t spend the next two years perpetuating the same childish arguments about excessive pork barrelers. Grow the fuck up and start pointing out that given our current system, a representative that doesn’t pork up a federal bill is committing political malpractice.

And to liberal voters that are pissed off at the jackasses that were elected last week – don’t harp on your friends for voting for Rand Paul, who turned out to be a hypocrite. You should instead point out that of course, Rand Paul was going to be hypocritical. He’s not the asshole. The person that voted for him based on his promise to shrink government is the asshole for falling for the same, tired unicorn they always vote for.

I Whine Because You Blow

September 29, 2010 by Bitchy

In the past week, Joe Biden has joined the white house administration chorus in crapping on the democratic base. Here, watch;

Buck up? That sounds familiar. Hmmm…where have I heard that before? Oh right I heard it from Obama here. I’ve heard this enough from the administration to now be able to decisively say that these aren’t gaffes. This is a mystifying strategy. I don’t know what they’re trying to accomplish, but I can tell you that the result is a division in the democratic party.

This happened on MSNBC yesterday:

I wasn’t watching it because I wasn’t home, but I was checking twitter from my iPhone. My twitter feed exploded with anti-Cenk tweets. I had no idea what was going on, so I had to wait until I got home to catch up. I watched the clip and agreed with most of what Cenk said (although a less red-faced delivery might have been more appealing). I listened to Cenk’s show later (The Young Turks) and heard him say that he thought all of those tweets were a concerted effort to astroturf (sometimes right wing media outlets will tell their fans to pile on a specific left wing pundit on a specific day) him. They weren’t. They were tweeted by members of the democratic base that I follow.

These people are active democrats that buy into the idea that the health reform bill was “historic”. They buy into the white houses’ narrative that the administration has delivered on “70% of the promises made in the campaign, in twenty short months”. I suppose that’s one way to look at it, but you have to overlook a whole lot in order to maintain that point of view.

Was the health reform bill historic? No. Was the fact that something happened with health care legislation historic? Yes, but only in that, the last time we reformed health care was fourteen years ago. When something occurs that infrequently, it’s not unreasonable to refer to it as “historic”.

I don’t believe it was historic because it didn’t fundamentally change the system. We all still have to buy our health insurance from private companies, and there is still nothing place to prevent them from gauging us with obscene rate increases every year. I’m not saying it didn’t help some people out. I know that it did. I see comments and blogs from people that have been able to obtain health coverage for the first time in years, every single day. I thoroughly appreciate the difference this reform has made, for the small number of people that it’s helped.

But let’s be honest, this bill wasn’t much more than adequate. It was the bare minimum that could have been passed, and still labeled a “win” for Obama. As lacking as this bill is, there would still have been one way that I would have been satisfied with it – if the administration had actually fought to get the best thing they could, I could have championed this bill. But they clearly didn’t. Does anyone remember President Obama’s moving speech, strongly advocating for a public option? Yeah, me neither. Does anyone remember President Obama strongly advocating for a medicare buy in? Yeah, me neither. Does anyone remember seeing a single republican standing on the senate floor, reading the phone book in an effort to filibuster the passage of the bill? Yeah, me neither.

I could have accepted this crapfest of a health reform bill if you had tried and failed. You didn’t. Don’t tell me to buck up. Fuck you.

Same thing with financial reform. This administration didn’t do a goddamned thing to regulate the derivatives market, which is the thing that every economist agrees, is the root of our financial instability. They didn’t even try.

I will buck up when, and only when you don’t fuck up. And I’m not a whiner, a retard, or a vicious part of the professional left that is trying to undermine you. I’m trying to make you better. If you wanted an uninformed, sycophantic base, you should have run as a republican. Oh yeah, and fuck you!

Even with this split between democrats that need to believe, and democrats that need to think critically, I’m positive that one thing will happen – we will all collectively show up to vote. Active democrats don’t sit out elections, any more than active republicans do. You know who’s not going to show up? Everyone else. The people that turned out en masse to vote for change in 2008 will not be there for you this time. And if you don’t start to deliver meaningful change in the next two years, they’re not going to show up for you in 2012 either.

The sycophants in the democratic party will show up because they feel that you’ve given them enough change that they can stay on board. Disgruntled democrats will show up because we realize that you suck less than republicans. You’re wasting your time crapping on your base. We’re going to be there for you one way or another, but no one else will. You’ve disenfranchised and demoralized everyone else with your half assed legislative “victories”.

This administration sucks at politics if they can’t figure that out. Pointing at your base and saying, “A HA! This is your fault!” when you lose in November is stupid, and it won’t help you get your shit together for 2012. This strategy makes Obama a lot like Bush in that, both love pointing the finger at someone else when they fuck up.

I whine, because you blow. And my whining is not the root of your problems. You blowing is.

Unacceptable!

May 1, 2010 by Bitchy

I’m referring to the merry band of miscreants that we have to choose from this November. I don’t know about where you guys live (I’d love to hear your stories), but here in New York, we’re forced to vote for another crappy senator. It doesn’t matter who we vote for, they’re all crap.

Kirsten Gillibrand is very likely going to win the senate seat she currently holds because republicans have nothing, other than a former Chief economist for Bear Stearns. Yay for us! In one of the most liberal states in America, we get to pick between two conservative corporatists. Gillibrand has spent the past year trying to “left it up” in order to secure any votes in Manhattan, but she recently showed her hand by doing her part in eviscerating the financial reform bill. She’s getting a TON of money from Wall Street to fund her campaign, which means she takes marching orders from Lloyd Blankfein. She hasn’t even been elected to that seat yet, and she’s already made it clear that her interests trump those of New Yorkers and Americans at large. What is she going to turn into after she’s obtained six more years of job security?

The sad thing is that my situation in New York isn’t even the the worst of options that Americans must make. Poor Nevada has to choose between the very the ineffective pussy that is Harry Reid and the crazy chicken lady! Arizona gets to choose between the filthy, corrupt JD Hayworth and crazy, bitter John McCain. And let’s not forget California, another liberal bastion of America. You’ve got Meg Whitman, who somehow finds time to run a campaign between board meetings at Goldman Sachs and Carly Fiorina, who was paid $45M just to get the fuck out of Hewlett Packard.

Why is this happening to America? These are not candidates that anyone can get behind, regardless of party affiliation and political ideology. No true conservative can possibly find JD Hayworth palatable if they’re being honest with themselves. And Kirsten Gillibrand, the corporatist Annie Oakley should make any self respecting democrat wretch. If we voted our conscience and our real ideology, rather than being herded by our political affiliations, we would all see that none of these people are acceptable. None of them give a fuck about protecting our interests.

Both parties have completely gone to shit, and it’s not going to stop unless we stop it. Every time we vote for one of these assholes, we’re ensuring that the next wave of candidates that our party puts in front of us is going to be worse than the last.

I have found another Senatorial candidate to support here in New York. He doesn’t have a snowballs chance of getting the word out in the face of the big money that Gillibrand is getting from Wall Street, but I’m campaigning for him. If Jonathan Tasini can siphon off 10% (I know, that’s a lot) of the votes in the democratic primary, we can send a message to the DNC.

Sadly, I feel lucky to even have another option since that’s not the case in a lot of races across the country. My plan was to just go in and undervote, meaning that I will vote on everything else, while leaving my senatorial choice blank. Trust me, undervotes do not go unnoticed. Not voting at all is completely ineffective because it appears as if we just don’t give a damn.

I fundamentally believe that the only way to change the sad state of political affairs that we find ourselves in, it for us all to work for change within our own party. I don’t believe that democrats can fix the republican party or vice versa. But if democrats send a clear message to the DNC, they’ll listen. This will never be accomplished by holding you nose and voting for the piece of shit candidate that the party has put in front of you. It certainly won’t be achieved by drinking the party kool aid and convincing yourself that piece of shit isn’t a piece of shit, simply because they’re representing your party.

It’s our responsibility to find better candidates and to support them with our votes, our time, and our money. And if you can’t find another option, maybe you should run! I’m not kidding. But barring those two scenarios, I believe that an epidemic of undervoting would send a message to our parties. We have to stop tolerating the unacceptable.

I am never going to leave the voting booth with that feeling of needing to boil my body just to clean off the stink of what I was just forced to vote for again. Are you?

Please, feel free to share your crappy candidates! It’s hard for me to stay on top of local races across the country, but I an curious!

Let’s Abandon Financial Reform

April 26, 2010 by Bitchy

I mean it. Screw trying to reform the system. This is the conclusion I’ve come to after a rigorous review of our current economic system.

Sure, our economic stability went to shit when we started peeling back regulations on banks and investment banks back in the 80s. Regulations that by the way, kept us virtually bust free for forty years. And yes, continued deregulation through the 90s and 00s did make for a more volatile and precarious financial system, resulting in shorter boom and bust cycles. But I still say fuck it. We shouldn’t bother to regulate.

I know I sound nutty again, but there’s a method to my madness.

I really believe that our chances of getting the kind of regulation that we had in the 40s in place is pretty damned close to impossible. The financial industry has way too much money invested in our politicians. Our congressmen, senators, and president aren’t about to bite the hand that feeds them. We’re not going to get any kind of reform that will prevent banks from doing precisely what they did to tank the economy in 2008. We’re sure as hell not going to get any regulation that will stop investment banks from creating new “financial products” that could potentially be even more devastating than the financial products that just screwed us. So let’s not even bother. Who needs another long, drawn out battle like the one we just had on health reform, that will leave us almost as screwed as we would be if we did nothing?

I say we leave the banks alone. Let them do what they want to do, completely unmolested by government oversight.

What we should do instead, is start national banks to compete with the private banking system. I’m not talking about taking over the banks. I’m talking about creating new banks.

Right now, Bank Of America, CitiBank, WaMu, Chase, and all of the other banks that are “too big to fail” are borrowing 100% interest free money from the federal government. Money that we had hoped they would use to lend to small businesses so that we could jump start the economy. But they’re not actually lending that interest free money the way that we wanted them to. They’ve calculated that they can make much bigger short term profits if they take that interest free money and gamble it on derivatives. What they’re not gambling on derivatives, they’re lending to you in the form of credit card debt. And they’re charging you an exorbitant interest rate to borrow money that they’re getting for free.

So why not cut them out? Let’s get rid of the middle man and create national banks. We just did this with student loans. We used to let banks be the middle man in the student loan system. It was a great deal for them. They loaned out the money which they got from the federal government and charged interest for it, but were completely insured by the federal government if you defaulted on paying the loan. They got all of the reward with absolutely no risk. So we finally decided to cut them out of the equation. Student loans are now going to come directly from the federal government. The interest that you pay on those loans will now be paid directly to the federal government to keep the system going. Makes sense, right? So why can’t we do that for small business loans, mortgages, and personal loans? Why are we letting private banks interject themselves between us and the federal government who supplies the money anyway?

This would solve every single problem that we face today. We wouldn’t have to worry about the banks being too big to fail because we would have a solid banking system in place. So if you fail, fuck you. We’ll be just fine. A national bank would give consumers more options. We could decide for ourselves if we trust the private system over the government bank. We wouldn’t have to worry about small businesses being left out in the cold by banks that don’t want to lend to them. We certainly won’t be paying 30% interest on credit cards since national banks wouldn’t have derivatives trading to finance. We wouldn’t have to worry about ever bailing out another undeserving bank executive again. And since banks are so averse to government interference, we could stop the FDIC insurance system that we currently provide them. And we can charge the private banks interest on the money that they’re getting for free now.

This is the perfect solution to every single problem that we face. And the banks would get what they want; free reign.

I honestly don’t know why we’re not having a serious conversation about starting national banks. Unless I’m missing something, it seems like the solution to all of our national problems. And it creates more competition. Who can argue with that?

Capitalism And Leprechauns

April 21, 2010 by Bitchy

I am constantly amazed and confused by people that wax poetic about American capitalism. I can’t tell whether they just don’t understand the fundamental principles of capitalism, or if they’re simply not paying attention to what’s going on in America today.

So let’s clear a few things up by starting with the definition of capitalism:

An economic system based on a free market, open competition, profit motive and private ownership of the means of production. Capitalism encourages private investment and business, compared to a government-controlled economy. Investors in these private companies (i.e. shareholders) also own the firms and are known as capitalists.

In order for capitalism to exist, you must have a situation where the shareholders who have invested in a company partake in the profits of that company. We don’t have anything resembling that anymore. We have a system where executives of a company take all the profits that are left after purchasing a congressman, leaving the shareholders with nothing.

Everybody is aware by now, of the exorbitant bonus structures in the financial industry. On the day that the FEC announced that they were filing charges against Goldman Sachs, the company announced that it would be paying out $5.4 billion in bonuses. This, just 15 weeks after they had paid out $16.2 billion in bonuses. If you take a close look at the readily available financial disclosure information for all of the big banks and investment firms in the US, you’ll see a pattern emerging. Executives seem to be shifting most of their compensation into cash pay outs, rather than accepting stock grants. They’re obviously looting the companies for every cent they can get, while they can get it. None of the five biggest banks in America currently have any assets. You read that right, they’re not worth anything. Their liabilities far exceed their assets, making them “zombie” banks. I’m not going to get super financial wonky on you because this would be a really long post, and I want to focus in on what corporate executives are doing to America. But trust me, I’ve done a lot of research into this, and listened to all of the economists that correctly predicted the subprime collapse. They are all in agreement in their assessments that our banks are worthless. They are also all in agreement that another major collapse is eighteen to thirty-six months away. But more important than what these very smart economists with solid track records of forecasting our economic situation, is what the executives are doing. The fact that they’re suddenly shifting compensation packages to cash payouts tells me that they don’t want stock in the companies that they’re running into the ground. If you don’t want to believe the “doomsday” economists, then look at the evidence and apply a little bit of common sense.

So as these executives are looting the companies that they’re running into the ground, they’re royally fucking their shareholders, who are seeing none of the fake profits. I say fake because the banks are leveraging taxpayer bailout money to show liquidity that doesn’t really exist.

Who are the shareholders? That would be anyone with a 401k in America. Your 401k is invested in virtually all of the companies in the Fortune 500. Because of the way 401k investment options are packaged, most people have no idea what exactly they’re invested in. It’s safe to assume that you own some Bank Of America stock and some Citibank stock and some Goldman Sachs stock, as well as bundles of tech stocks and retail stocks. One of the many shitty things about this system, is that Goldman Sachs is moving most of your 401k money around. They are one of the biggest investment firms in the world, which means that they’re steering your 401k investments. They’re the reason why the dotcom bust happened. They were IPOing total crap companies, in an effort to create imaginary money so that they could amass real profits for themselves. When that well went dry, they created imaginary money in the form of inflating the real estate market. They drove up the value of your house by “qualifying” a pizza delivery guy to buy the house next door to yours. It didn’t matter that the pizza delivery guy couldn’t really afford to buy a house. Goldman Sachs figured out that they could sell the pizza delivery guy’s debt to you, by investing your 401k money in real estate bundles that were worthless.

They got you to create debt on the basis of imaginary equity that they then got you to buy! Amazing, right?

And while they were creating huge profits for “the company”, they weren’t creating any profits for you, the shareholder, because they were taking the lion’s share of the profits out and paying themselves enormous bonuses. The more they understood the precariousness of the financial structure they had created, the more imperative it became for them to grab all the cash they could while there was any cash to grab.

This isn’t limited to the financial sector. Here’s a great story that got on my radar thanks to The Young Turks. It’s a story about Abercrombie & Fitch, whose profits have plummeted in the past 2 years. In 2009, the company netted $254,000, way down from $273M in 2008 and $476M in 2007. Their CEO’s (Mike Jeffries) compensation package for 2008 totaled $71.8M. Think about that for a second, he got paid about 1/3 of everything that the company made in 2008! But that’s just his compensation. We’re not even adding perks into what he cost the shareholders. His travel expenses in 2008 were $1.3M! We don’t know what his total compensation for 2009 was just yet (I’m DYING to find out), but we do know that the board of directors took some steps to tighten his belt. They decided to limit his travel expenses to a mere $200,000 per year. But before you start weeping uncontrollably for his terrible fate, you have to know that in exchange for amending his employment contract (which expires in 2013), Jeffries received a lump sum of $4M! Yes, he got a lump sum that amounts to sixteen times what the company made in profits last year, for simply agreeing to amend his employment contract. A little quick math tells me that if he continued his lavish travel through the end of his contract, the cost of the tab to the company would have been $2.6M. By amending his contract, they brought that cost up to $4.4M.The worst part is that he’s going to walk away a very rich man as a reward for bankrupting the company that he works for. It’s the same racket that Carly Fiorina ran with Hewlet Packard. She got a golden parachute which cost the shareholders $45M just to get her to leave! And now this stupid bitch that failed her way to massive wealth may become the next US senator from California? Unbelievable!

See what I mean about looting? And once again, who gets fucked? That would be the shareholder (i.e. you).

We don’t have capitalism in America, anymore than Ireland has leprechauns. We don’t live in a country where hard work pays off anymore. We live in a place where the system is gamed to favor the rich, while sticking you with the tab when they fail.

Take a look at this lovely chart, which shows the ratio of CEO compensation to the average worker’s salary.

Charming, right? A CEO today makes 319 times what the workers in their company makes. I predict that we’re going to see a huge spike in CEO compensation for 2009 and 2010 because of a last ditch effort to squeeze every cent out while there’s a there there.

Oh yes, the people out there screaming for capitalism confuse me. I wouldn’t be confused if they were all Carly Fiorinas, but they’re not. They’re the people who work hard, only to earn less than they were earning ten years ago, while their retirement funds are routinely looted by a handful of very powerful people.

Don’t worry, this post isn’t all about doom and gloom. The good news in all of this is that I still believe we can turn it around (although that window is closing). We just collectively need to realize that we have all the power. We still get to vote every year.

I know that our government sucks. Our system has entirely too much corporate money in it, thereby eviscerating its efficacy to actually do something good for the people. But the alternative view of trusting corporations to do right by us is completely insane. I can’t do anything about Mike Jeffries, but I can vote out Charlie Rengel. I understand that I have more power over the government than I do over corporate executives.

The first thing that we can all do, is to move our money out of the big banks. If our government won’t stop them from becoming “too big to fail”, then we can. Move your money is an excellent resource to help you find a good community bank.

The next thing we can do is to start collecting signatures in each state to put a “clean election” measures on the ballot. If we mandate that our elections are publicly financed, we take the first step in taking back our government. The biggest problem we have right now is that it costs an average of $8M to win a senate seat that pays $175,000 a year. Does anyone else see a problem with this? If our representatives didn’t have to whore for corporate cash just to get elected, they just might start representing you for a change. Keep in mind that this culture of CEO looting didn’t happen without the help of the government.

And lastly, we can keep ourselves informed. We have to keep a close eye on the people we elect. You can’t just assume that your congressman is “the good guy” amid a sea of corrupt politicians. And it shouldn’t matter if your representative is they guy you voted for. That should be more of a reason to keep an eye on them. Democrats didn’t keep an eye on Clinton. What did we get in exchange for our blind faith? We got NAFTA and a massive deregulation of our financial institutions. How did that work out for you? Republicans didn’t keep an eye on Bush. We’re all to familiar with what they got in return. I’m not going to go through all of the damage that he did. This post is long enough!

My point is that we would all be better off if we policed our own party, instead of policing the party that is never, ever going to get our vote. Doesn’t that make more sense to everyone? We’re not getting anywhere with partisan attacks on the opposing team. It’s just not working. We need to let our team know that they’re going to lose a vote that they previously had if they don’t represent us well. And we need to mean it.

I guess what I’m saying is that we need to get proactive! I really believe that if we do, things will get better. We are not as powerless as most of us believe we are.

We Need To Band Together To Sue The Shit Out Of S&P

May 11, 2010March 15, 2010 by Bitchy

Both S&P and Moody’s, actually. 60 Minutes did a fascinating piece on the financial meltdown last night. You can watch it here.

I’ve had an idea in my head for about a year now. And every time I read another story about this financial meltdown, I am more convinced that I’m onto something. I think that every single person in America with a 401k or a 403b should band together to instigate a class action suit against S&P and Moody’s. I believe that unions are the logical place for these class action suits to start.

Why sue the rating agencies? Because if they hadn’t rated these sub-prime mortgage bundles as AAA, they never would have ended up as investment options in your 401k. These agencies are responsible for analyzing investments and rating their viability. They were the first step in the disaster that we’re all suffering under now. I understand that Moody’s and S&P are relatively small fish in the grand scheme of companies that are responsible for stealing your money. But I believe that the discovery process in suing them will lead to the much bigger fish. I believe that the discovery process will show that the rating agencies are paid BY INVESTMENT FIRMS to rate their investment offerings!

I honestly don’t know why Moody’s and S&P are still in business. And why aren’t they forced to put emoticon winkies next to each and every investment rating that they put out?

Americans are understandably pissed. I’m pissed. So why are we acting like we’re powerless?

Our system of “capitalism” is broken and our government isn’t going to help us because the people that are benefiting from this broken system have bought our legislators. If go down the line and sue each of the players in this game of “raid America’s retirement plans”, we can start to fix our broken capitalism system by using it against the people that are using it against us.

No, it’s time that we took matters into our own hands. It starts with going after the rating agencies. I’m convinced that doing so will lead us to Goldman Sachs (and their brethren). We do have the strength in numbers thing going for us. We just need to get organized and band together to make things happen.

If we do nothing, I can assure you that there will be more privatization of profits and socialization of losses to come. This is surely something that we can all agree on regardless of party affiliation, isn’t it?