"I'm Lobotomized As Hell..."
No, not me. Of course, I'm as mad as hell, and yes, same old same old, at the way Bank of America's tellers, on seven occasions, gave my money to thieves with a fake driver's license in my name and the wrong expiration date...no PIN, no signature verified...and then how Bank of America fired me as a customer, as if I'm the wrong one, not the wronged one.
I'm also angry at the way you and I are expected to bail out all the wild mortgage, banking, and finance speculators. I live within my means, rent because I can't afford to own in Los Angeles, treat my credit card like a debit card, and I'm wildly frugal. For example, I needed glasses for night-driving, and rather than having the prescription filled the way most people do, by paying hundreds and hundreds of dollars at some eyeglass place locally, I invested $39.95, including postage, to get my prescription filled at eyeglassdirect.com. Okay, truth be told, I actually spent $48.95, but I wasn't counting the actual frames, since I bought them on the beach for $9 years ago, pulled them out of a drawer, snapped out the lenses and mailed them off -- and whoops, there's another $1.95 or so right there.
Yes, after all my wild frugality, I'm expected to pay for the greedy and/or stupid who bought McMansions way beyond their means and those who made it their business to encourage and enable them to do it through fraud and other nefarious means?
I'm wondering something else, and James Grant is wondering it too, in the WSJ: Where the hell is all the outrage? The subhead says it pretty well:
Through history, outrageous financial behavior has been met with outrage. But today Wall Street's damaging recklessness has been met with near-silence, from a too-tolerant populace, argues James Grant
An excerpt from Grant's piece:
Late in the spring of 2007, American banks paid an average of 4.35% on three-month certificates of deposit. Then came the mortgage mess, and the Fed's crash program of interest-rate therapy. Today, a three-month CD yields just 2.65%, or little more than half the measured rate of inflation. It wasn't the nation's small savers who brought down Bear Stearns, or tried to fob off subprime mortgages as "triple-A." Yet it's the savers who took a pay cut -- and the savers who, today, in the heat of a presidential election year, are holding their tongues.Possibly, there aren't enough thrifty voters in the 50 states to constitute a respectable quorum. But what about the rest of us, the uncounted improvident? Have we, too, not suffered at the hands of what used to be called The Interests? Have the stewards of other people's money not made a hash of high finance? Did they not enrich themselves in boom times, only to pass the cup to us, the taxpayers, in the bust? Where is the people's wrath?
The American people are famously slow to anger, but they are outdoing themselves in long suffering today. In the wake of the "greatest failure of ratings and risk management ever," to quote the considered judgment of the mortgage-research department of UBS, Wall Street wears a political bullseye. Yet the politicians take no pot shots.
Barack Obama, the silver-tongued herald of change, forgettably told a crowd in Madison, Wis., some months back, that he will "listen to Main Street, not just to Wall Street." John McCain, the angrier of the two presumptive presidential contenders, has staked out a principled position against greed and obscene profits but has gone no further to call the errant bankers and brokers to account.
The most blistering attack on the ancient target of American populism was served up last October by the then president of the Federal Reserve Bank of St. Louis, William Poole. "We are going to take it out of the hides of Wall Street," muttered Mr. Poole into an open microphone, apparently much to his own chagrin.
If by "we," Mr. Poole meant his employer, he was off the mark, for the Fed has burnished Wall Street's hide more than skinned it. The shareholders of Bear Stearns were ruined, it's true, but Wall Street called the loss a bargain in view of the risks that an insolvent Bear would have presented to the derivatives-laced financial system. To facilitate the rescue of that system, the Fed has sacrificed the quality of its own balance sheet. In June 2007, Treasury securities constituted 92% of the Fed's earning assets. Nowadays, they amount to just 54%. In their place are, among other things, loans to the nation's banks and brokerage firms, the very institutions whose share prices have been in a tailspin. Such lending has risen from no part of the Fed's assets on the eve of the crisis to 22% today. Once upon a time, economists taught that a currency draws its strength from the balance sheet of the central bank that issues it. I expect that this doctrine, which went out with the gold standard, will have its day again.
Meanwhile, let's have more of this:
And let's call it what it is -- not FDIC insurance but FD You and Me Insurance -- because it's your hard-earned dollars and mine that are going to bail out IndyMac and all the rest.
But, hey, if we're going to be in the bailout business, where's mine? I bought KooKooRoo stock that really tanked a few years back. Do you think the government will give me my $800 back? If not, why not? Everybody else is getting their booboos fixed.
The American people are famously slow to anger...
Yet another way I'm unlike most Americans, I guess. Patience is a virtue, my ass. ;)
Seriously, there are times when patience is appropriate and there are times when anger is appropriate. I don't see anything inappropriate about being angry at your government for taking your money and giving it to someone else for no good reason. And I don't see how patience benefits either you or the public good in this case.
I'm opposed to the major bailouts that have been done or proposed lately: Bear Stearns, Fannie Mae, Freddie Mac and mortgage holders. As far as I know, taxpayers had/have no obligation to bail those folks out.
The IndyMac incident is something else entirely. The expectation of government insurance was there ahead of time. Certainly one could argue whether the FDIC should exist and if so, how it should be funded, but as long as it exists in its current form, insuring funds at incompetent banks is its job.
Shawn at July 20, 2008 8:24 AM
I'm not arguing against the FDIC, but the fact that it seems like we're paying because people speculated, and I'll speculate that there are a few fraudulently acquired loans in there, too. These people who are losing their homes -- in many cases, they were guilty of fraud in lying about their income -- and they were likely encouraged in it by those who got the biggest commissions from their getting to the biggest home possible.
Amy Alkon at July 20, 2008 8:31 AM
If Chucky Schumer had kept his fat fame-seeking mouth shut, IndyMac would have been able to do an orderly reorganization of assets and possibly even have stayed in business without hitting up the FDIC for a penny.
Congress was complicit in the problems at Fannie and Freddie, and the only reason anyone's talking about a bailout there is because of fear that it could collapse the whole economy. Personally, I think it's more likely because the congresscritters are in total ass-covering mode.
brian at July 20, 2008 9:49 AM
Sigh.........I think the FDIC is a good thing, with it's current limits. I think it was supposed to end bank runs and that sort of thing. But bailing out the others is sooo wrong. If it kills the economy, fine. A better one will rise, and life will go on. I don't see the current one doing all that great anyway. Sometimes a lame duck should be allowed to die.
momof3 at July 20, 2008 11:35 AM
This is the age of the irresponsible and the dishonorable. Unfortunately, the rest of us are indeed too passive and silent to cause politicians to heed them. If they can get more votes by supporting the parasites, they will. The good folks need to vote and speak out, then things may change.
Bruce Long at July 20, 2008 11:50 AM
I agree with many of sentiments expressed here, especially with the guy who lamented the creation of exotic financial instruments that NO ONE understood completely. However, I can't help but wonder where is the outrage over the ONGOING smoke and mirror games being played with Social Security and Medicare? These pyramid schemes already dwarf the Bear Stearns fiasco. I suspect that fixing Social Security doesn't fit the leftist agendas of these people holding signs outside Bear Stearns front door however.
John Mc at July 21, 2008 12:18 PM
Small point, John: none of us were given a choice whether or not to participate in Social Security. Hence, you're comparing apples and oranges. It's not exactly the same thing as assholes voluntarily taking out a mortgage on more house than anyone would half a brain would know they could afford.
And, unless you want to put the elderly and disabled -- heck just say disabled because by elderly I mean too old to work -- they're gonna have to come up with something.
Plus I paid into it for three decades (and, yes, I know that money went to the retirees then collecting) and they damn well better give me something or refund my money or I'll organize a tea party myself.
Now that I'm over myself, I admit I'm banking more on my employer's pension plan, what savings I can put by and, if necessary, moving somewhere with a lower cost of living than the state I live in (though I hope to avoid this one because yes -- strike up the music -- I love NY!) but if it is working in NY or chilling elsewhere, I'm picking the chilling elsewhere.
I've been honest and hardworking all my adult life while I've watched slackers and criminals being handed shit left and right on my tax dollar. I've earned it and one way or another, I'm gonna fucking get it!
T's Grammy at July 22, 2008 10:00 AM
I've been honest and hardworking all my adult life while I've watched slackers and criminals being handed shit left and right on my tax dollar. I've earned it and one way or another, I'm gonna fucking get it!
So have I. The only difference, I suspect, is that at the age of 47, I have no illusions of there being any money left by the time I retire. On the contrary, I strongly suspect that in order to pay for a bankrupt system, those who have not saved will demand from a compliant and corrupt Congress that they begin to raid private IRA and 401Ks. I have never had the benefit of a company pension, nor have I ever had a company match my 401k contributions. My retirement will be ENTIRELY self financed. My fear is that those who have not saved, not thought ahead, will demand in the name of "fairness" that my money be taken from me and given to them.
John Mc at July 22, 2008 11:00 AM
You entirely missed my point. The money has already been taken from you. You're only 3 years younger than me. If you've been a salaried employee, you've already been taxed and had it given to those generation older than you.
Damned straight I'm gonna demand fairness when it comes my turn. Of course, our definitions of fairness may differ. If I have enough to live on without being a bag lady or living in a roach motel eating dog food in my old age, I'll be content Social Security or no. If I'm okay, I can't be riled up enough to "demand" anything.
But, as I said, I am relying more on my pension from my employer than Social Security. Others, as you point out, aren't lucky enough to have that back-up and, frankly, they aren't out of line to demand something. As I pointed out (and the issue you ignored) it doesn't compare to the credit cards and home loans because they didn't have a choice about participating.
T's Grammy at July 24, 2008 7:41 AM
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