Thursday, October 14, 2010

The Ides of October

Well here we are in the Ides of October and Wall Street's favourite stockmarket is powering triple digits higher. How does that make you feel?

Meanwhile Main Steet's favourite worker remains powerless and unemployable. And how does that make your feel?

And the only economic reason given for Wall Street's celebration is that it's been down so long it all looks up from here.

That and the Federal Reserve's lack of reservation in printing as many dollars as it takes to show Wall Street a good time.

Bernanke and crew, just like his predecessor, Alan Greenspan, friend not foe to bubbles of all types, especially low interest-derived ones, is beholden to and manned by Golden Wall Street bankers. To them go the Bread. To the rest of us go the crumbs, unless the birds and mice get to them first.

If there is one thing that agitates the working man and woman in an economic recession, it's the rigged way the bankers get stuff full of feed, while the rest of the country cinches in the belt and hunkers down. Everyone except Wall Street and its minions at the Fed and in Congress seems to accept the economic cycle.

In worst of times, best of times for Wall Street
A few weeks ago, an executive with a $7.4 billion hedge fund complained publicly to President Obama that he and his Wall Street colleagues were being treated like a pinata.

Poor baby.

Here we are, suffering through the deepest recession in 80 years, a recession caused in large part by the excesses, incompetence, greed and tunnel vision of Wall Street. Millions of Americans are without jobs, homes, health care and in many cases a future.

Yet according to the Wall Street Journal, bonuses and other compensation that Wall Street executives pay themselves this year will be the highest in history, breaking the record that was set just last year. In other words, the two worst years in the American economy in three generations are going to be the two best years in history for the Masters of the Universe who helped create this mess.

Fear and Loathing on Wall Street: Shareholders, Democrats in Crosshairs
After taxpayer-funded bailouts to prevent a total economic collapse, Wall Street firms are bellyaching about President Obama’s supposed anti-business policies, because he spearheaded reforms to curb their financial excesses. How soon they forget that they took the money from our pensions, and used it like Monopoly money to fund their trades in exotic instruments that also ruined the housing industry.

CNBC: Flaherty Says Bailouts Fuel Wall Street Pay
Larry Kudlow: Keith Boykin, why do we bother to play these silly games? Who is making what compared to who and how and why? Isn’t that just a little class warfare?

Keith Boykin: Well, I don’t think that it is class warfare. I think that it is just public information to know who is getting paid what. The reality is as was pointed out on the program before, there is excessive compensation on Wall Street. People understand that. It is outrageous. The American people, I think on Main Street are not happy about that. But you know, quite frankly Larry, I am over being outraged about it.

What outrages me is not that they are getting paid so much; they have the right to get paid whatever they want, especially for the companies that are not under TARP anymore, which is basically everybody. But what they don’t have the right to do is to collect billions and billions of dollars and then complain that the Obama Administration policies are somehow hurting business. Obviously they are not hurting if they are making this much money. It just doesn’t add up. I am tired of all the complaining and carping from Wall Street.

The profits and revenue of these companies have been boosted by a whole series of government protections and subsidies unavailable to people on Main Street. That is why people are so upset.

Wall Street's record bonuses: How outrageous are they?
Big banks must pay out to remain successful: Large banks need "top talent to stay with them," says Cheryl Casone at Fox Business, and that means big bonuses. Besides, it's not as if Wall Street isn't working hard. Thanks to the financial sector, the Dow Jones Industrial Average has recovered and is flying high. "Hate the idea of fat cats on Wall Street all you want, but take a look at your portfolio before you pass judgement." "Wall Street bonuses not the enemy"

GOP Groups Launch Massive Ad Blitz
An alliance of Republican groups is launching a $50 million advertising blitz this week in a final push to help the GOP win a majority in the House, representing the biggest spending blitz ever by such groups in a congressional election campaign.

The coordinated effort, which the groups have dubbed the "House surge strategy," tops what the official Republican House election committee expects to spend on television ads for the entire contest.

Democratic candidates, notably incumbents, have raised more cash than many of their Republicans rivals in this year's most competitive House races, according to a Wall Street Journal tally of Federal Election Commission data. In the 40 races deemed toss-ups by the Cook Political Report, a political handicapper, Democratic candidates had a combined $39.3 million of cash on hand as of June 30, the most-recent filing deadline. Republican candidates had $16.5 million in the bank.

Steven Law, who runs two of the Republican organizations, American Crossroads and its affiliate Crossroads GPS, said the effort was "aimed at putting Republicans over the top by evening out the financial disparities and dramatically expanding the field of battle."

American Crossroads was set up with the help of former Republican White House advisers Karl Rove and Edward Gillespie.

The spending campaign underscores a phenomenon that emerged with force in the 2010 elections: Outside political groups, most of which don't have to disclose their donors, are rivaling the traditional dominance of political parties' official campaign committees. Many of these groups, including those launching the ad blitz, are less than a year old.

"The scales have tipped from the political party to the outside political organizations," said former Rep. Bill Paxon of New York, who once led the National Republican Congressional Committee, the party's House campaign arm.

Evan Tracey, head of Campaign Media Analysis Group, which tracks campaign-ad spending, called the combination of ad outlays by the groups "historic" in its size, an assessment echoed by other campaign-finance experts and officials.

Mr. Tracey said outside Democratic groups were running ads in nine House campaigns while Republican groups are advertising in 70.

The record fund-raising and spending was made possible in part by a Supreme Court decision that allowed companies and unions to donate unlimited funds to such groups. The decision also allowed ads by such groups directly supporting or opposing candidates to run in the weeks before the election, which had previously been off-limits.

The sentiment is perfectly timed for an election. But so was the Conservative majority Supreme Court decision unlocking corporate campaign spending.

At last corporate America has a worthy investment proposal for all that cash sitting uninvested in its coffers. How about we buys us a guvmint?

UPDATE: The new corporate business model: increase profits, not jobs

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