A welcome to readers

As a resident of this planet for more than four fifths of a century, I have enjoyed both successes and disappointments in a wide variety of vocations, avocations, and life experiences. This blog satisfies my desire to share some thoughts and observations--trenchant and prosaic--with those who are searching for diversions which are interesting, poignant and occasionally funny. I also plan to share recommendations about good/great movies I've watched and books and articles which I've found particularly mind-opening, entertaining, instructive. In addition, I can't pass up the opportunity to reflect publicly on how I am experiencing the so-called Golden Years. Write anytime:

Monday, April 4, 2011

Bernake, derivatives, and credit swaps, eaten with Frank's Famous Hot Sauce

Several nights ago, Liz and I watched a current movie rented from Netflix. We've seen lots of films in the past five years (usually over a jointly prepared dinner) in part because I have always been a movie buff, but also because Liz missed lots of movies during her early married life which was spent in the Middle East and Africa. So I have taken on the pleasant duty of helping her "catch" up with films she missed. At the same time, of course, I relish the opportunity to revisit and relive some fabulous visual experiences for a second or third time, and do so while enjoying our jointly prepared gourmet meal (last night, for a different movie,  it was Feisty Charleston Shrimp over cheese grits liberally doused with Frank's Hot Sauce--way better than Tabasco).

So, on Friday night, appropriately the first of April, we chose to watch Inside Job, a current documentary film which won lots of awards, including the coveted Oscar from the Academy of Motion Picture Arts and Sciences . This film detailed the causes and course of the economic crisis (some call it the Great Recession) of the past several years. We found the presentation to be straight forward, intelligent, minimally biased, and carefully researched, and we left the viewing with a better understanding of this cataclysmic series of interrelated economic events which negatively touched the lives of literally billions of people around the world while destroying the dreams and livelihoods of millions more. The film makes no pretense of being objective; the methodology is that of investigative reporting.

I emerged from the experience more frustrated, pissed off, and viscerally angry that I have been in years. Inside Job, the movie's title, set the stage. The movie related how a relatively small number of current and former Wall Street insiders were so motivated by personal financial greed that they risked overturning the world's economic structure and stability in order to reap monumental personal gains from both institutional profits and losses. In addition, these people received salaries and perks that were so huge that we ordinary mortals were simply unable to believe that the amounts could be true or real (e.g., a CEO heading a firm that is losing money gets fired and then is given a compensation of $25 million for his agreement not to sue...and as a "reward" for his failing efforts. This is not a world with which I am personally familiar.)

Indeed, if we go back and look at the dollar totals of bonuses, Golden Parachutes, salaries and total compensation of those who managed and directed the economy during the past 5 years, the figures of their yearly incomes was reported publicly in the press in 7, 8, and 9 figures. As a fairly "typical" American economic producer and consumer,  I have become accustomed to hearing about relatives, colleagues and friends making yearly salaries in the $100,000-200,000 range,  figures which are genuinely mind-blowing.

To make matters worse for the nation and world, many of the people who were so incredibly enriched by the shenanigans of the corporate "players" that they often abetted the larceny and deception for their own gain were also those who were charged with the responsibility of enforcing governmental regulations and the law. Not surprisingly, we learned that many of the decision-makers, regulation-enforcers and captains of industry were mostly drawn from the same talent pool.  They had gone to school with each other, vacationed together, worked previously with each other, employed each other, etc. They often moved from one firm to another and from one economic domain to another, or from private sector to public and back. Look, for example, at the histories of our current Secretary of the Treasury, Timothy Geithner, our recent Federal Reserve Chairs,  of Larry Summers, and the executives of many of the major trading, banking and insurance houses in the world.

Even after the incredible economic damage became known by the public, the same folks who were major players in causing the economy to crash were still allowed/encouraged/chosen to be directly in charge of our nation's economic regulatory and policy-making machinery. Many were elevated to top executive positions in corporate America; others into the financial arms of the government. As for the "rule of law" which is allegedly still in effect in our country, there has been virtually no criminal prosecution of those individuals or firms who repeatedly and knowingly broke the laws which led to this economic debacle.  Mr. Fox was clearly in charge of the hen house, and he appears to be there still. My conclusion is that so many people, including our elected officials, have fallen victim to the temptations of power, greed,  and the doctrine of "more is better at whatever cost," that American democracy would be better called American plutocracy. Corporations and money interests are now in charge of government. Cupidity and avarice are right up there with "purple mountains majesty."
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For those who are interested in history, the Supreme Court Decisions that ruled that corporations were to be understood legally as "people" set the stage for the demise of political democracy as once envisioned by the Founders and practiced by most Americans until the late 1800's: The first case granting personhood to corporations was Dartmouth College v Woodward (1819), but the principle was blatantly driven home in the 1886 Supreme Court decision granting corporations the same rights as living persons under the Fourteenth Amendment to the Constitution.

Quoting from David Korten's The Post-Corporate World, Life After Capitalism (pp.185-6):

          In 1886, . . . in the case of Santa Clara County v. Southern Pacific Railroad Company, the U.S. Supreme Court decided that a private corporation is a person and entitled to the legal rights and protections the Constitutions affords to any person. Because the Constitution makes no mention of corporations, it is a fairly clear case of the Court's taking it upon itself to rewrite the Constitution.
          Far more remarkable, however, is that the doctrine of corporate personhood, which subsequently became a cornerstone of corporate law, was introduced into this 1886 decision without argument. According to the official case record, Supreme Court Justice Morrison Remick Waite simply pronounced before the beginning of arguement in the case of Santa Clara County v. Southern Pacific Railroad Company that
          The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of opinion that it does.
          The court reporter duly entered into the summary record of the Court's findings that
          The defendant Corporations are persons within the intent of the clause in section 1 of the Fourteen Amendment to the Constitution of the United States, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws.
          Thus it was that a two-sentence assertion by a single judge elevated corporations to the status of persons under the law, prepared the way for the rise of global corporate rule, and thereby changed the course of history.

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If after reading this blog, you still want to watch the movie Inside Job, drop me a line and I'll send you the recipe for the Feisty Charleston Shrimp with grits and Frank's Hot Sauce so that you can get totally "burned up" in one gut-inflaming multi-media experience.


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