Bank of (Selling Out) America(ns). Thanks, George W. Bush!
MINT-AND-CORN COUNTRY, INDIANA — The locomotive of complete disregard for ethics, decency, and restraint that has marked and marred corporate America with particular ferocity over the last year-plus continues to steam down the tracks, this time as Bank of America tells the taxpaying public — who, courtesy of Mr. Bush’s and Congress’s corporate-socialist profligacy, bailed out the bank to the tune of fifty billion dollars (plus a guarantee of more than one hundred billion in potential losses) — collectively to go to Hell:
NEW YORK (Fortune) — Ken Lewis doesn’t have a golden parachute, but he’s all set for a comfortable landing — unlike his long-suffering shareholders.
The Bank of America (BAC, Fortune 500) chief executive officer said Wednesday he’ll step aside at year-end after eight years at the helm. Based on the company’s most recent proxy statement, he will have $53 million in pension benefits waiting for him when he leaves.
That should give him about $3.5 million a year in pension payouts for the rest of his life — at a time when people who bought the stock when he took the reins in 2001 are underwater on their investments.
[…]
Ironically, BofA decided to freeze this so-called supplemental executive retirement plan at the same time it got rid of golden parachutes, citing the need to better align executive compensation with investor returns. By any measure, those have been poor at BofA of late.
The company’s stock fetches less than half its year-ago price and remains below its level when Lewis took over in April 2001 — even after a 563% jump off lows from this March.
When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires — that we arm ourselves with pitchforks and moonshine.
I’m always a little leery of corn-pone populism, but the time may be upon us.
I hate to say it, but this is not a deficiency of Republicans or Democrats per se. It is a function of Keynesianism and the state of our academy.
OK, now I can go back to hearing Mariah Carey and thousands of screaming fans from my window. It’s a tough life.
I should say, however, that yeah, it’s about time we get out the pitchforks. Especially considering this
http://www.marketwatch.com/story//us-job-losses-accelerate-to-263000-in-september-2009-10-02
and this
http://wallstreetpit.com/10824-jim-rogers-says-us-government-lies-true-inflation-6-7
Bank of America also lead the way in offering accounts to illegal aliens. Marx was right on one point, capital has no borders.
Redistributing wealth from middle-class taxpayers to financial capital is neither socialism nor Keynesianism.
It is just banditry. Period.
The actual production-oriented sectors of the economy and productivist ideologues, be they socialist, nationalist, or libertarian, have to come together to stop this.
Dumbing down our lexicon outside of populism has few benefits.
Socialism, broadly defined, is the elimination of private property. When taxpayers are on the hook for other private losses – i.e., we are using public funds for private losses – it is tantamount, in many ways, to the socialist ideal.
Moreover, if you deny this is Keynesianism, then I’d politely say you have no understanding of the topic. Public spending to end economic depression was the essence of his prescription.
We (America) will be stuck with bad economic policy until the intellectual vanguard of our university economics departments change. It is a crisis of the intellectuals; those who make and influence policy also happen to issue doctorates. Unfortunately all of these intellectuals are on payroll from the federal government, if not the Fed itself. We need to go back to the economic studies of classical liberalism.
You are correct in one respect: calling it banditry, which it certainly is as well, will help rally the citizenry. Only when we start removing the corrupt public officials in large numbers will we shake up academia.
There is very little stimulating public spending. The main public spending consists of borrowing FROM private banks and the Fed Reserve (=same thing) to hand TO private banks and pay interest TO private banks on the created deficit. I do not believe Keynes advocated this (and no, I don’t want to advocate Keynsianism though there are worse theories).
There are very few Keynsians in modern economics programmes. When I was at Rice University a few years ago, my econ friends said there was just one ageing Keynsian econ prof in the dept. The same was true at the econ dept of my undergrad university. There are possibly more “Austrian”s teaching econ than Keynsians.
Various neoliberal models dominate in academia today. Why do so few speak out against this banditry? I would say many do, there was indeed no shortage of commentaries by experts and academics against TARP. However, the academics who get promoted through the power structure and edit various influential journals eventually find themselves somehow connected with the Fed Reserve.
I could also add the last open Keynsian in a finance ministry of a major country was Oskar Lafontaine under Schroeder’s first govt in Germany. He was forced out within a year and famously left the Social Democrats entirely.
May I recommend the following article, if you haven’t yet read it: http://www.huffingtonpost.com/2009/09/07/priceless-how-the-federal_n_278805.html
Virtually any ideology or economic theory would be better than the status quo in monetary policy, since the latter is based on corruption.
“There are very few Keynsians in modern economics programmes. When I was at Rice University a few years ago, my econ friends said there was just one ageing Keynsian econ prof in the dept. The same was true at the econ dept of my undergrad university. There are possibly more “Austrian”s teaching econ than Keynsians.”
This disqualifies you from making any further comments. It’s astoundingly uninformed. Why don’t you visit Mises.org and see how friendly/popular Austrians are with the wider economic community.
You might as well be disqualified from posting for believing in Austrian economics, which has its ideological roots in extreme liberalism. Are you looking for further validation of your theory by pointing out how peripheral it is?
There are very, very few young Keynsians in academia, just a few older ones dying out. That is the case, sorry. You libertarian extremists believe everyone is a socialist, communist, or Keynsian (or all of the above, since you are not apt enough to distinguish between your various enemies).
If by extremists, you include people with a tenable theory of money, I am one. This seems a prerequisite to commenting on economic policy. Attention to the regulation of one of civilization’s critical tools – money – I consider important, and doubly when in recession.
Reading your earlier comments again, I see no good indication that you’re familiar with economic theory beyond a superficial level. The study of production uses economic theory and deductive logic to describe the necessary outcomes of certain events. We study production through discovering the natural laws that govern economy, defining the nature of value, and establishing the ethically moral system from which it is to prosper – or a close approximation to that thereof. The pure science itself is value judgment free, although it generally incorporates assumptions of non-coercion. I quote Goethe, who recognized the elegance, beauty, and practicality in accounting practices:
“Double-entry bookkeeping is one of the most beautiful discoveries of the human spirit… It came from the same spirit which produced the systems of Galileo and Newton and the subject matter of modern physics and chemistry. By the same means, it organizes perceptions into a system, and one can characterize it as the first Cosmos constructed purely on the basis of mechanistic thought… Without too much difficulty, we can recognize in double-entry bookkeeping the idea of gravitation, or the circulation of the blood and of the conservation of matter.”
The problem with your comments is that they display a fundamental ignorance about monetary policy and the effects an impoverishing economy can have on a citizenry. If this is a blog on politics/policy, then I insist on making it known, because not only is it a developed field, but there are numerous historical events that confirm its veracity.
Moreover, you are being willfully ignorant; our economics departments are proudly Keynesian. You can find a list of who are largely considered anti-Keynesians here,
http://www.cato-at-liberty.org/2009/01/28/economists-against-the-stimulus/
but I’d wager that most of them, while being against the stimulus, would still propose inflation – i.e., lowering interest rates. This government intervention, made popular by Friedman but equally as admired by Keynes, eats savings.
“Thus lowering interest rates increases investment — it reduces the cost of getting money, which reduces the cost of making stuff, which means more things can make a profit. And if more things can make a profit, more things get made, which means more people get hired… Well, if the interest rate is the cost of money, the obvious answer is the amount of money in circulation. If there’s a lot of money lying around, you can get some pretty cheap.”
http://www.aaronsw.com/weblog/keynes
So you see, when I saw they are nearly all Keynesians, positivists, empiricists, and neoclassicals, I’m not kidding. They vary in degree and in temper, but almost all mainstream economists are interventionists (a la the spirit of J.M.K.’s General Theory).
The “Austrian” approach is a fundamentally different conception, and you’re right – it has its roots in Liberalism (and Rationalism). To be sure, it is presently radical, given the academic climate. Is it extreme? I don’t think so when you actually consider the facts and the propositions that constitute the theory. I think one of its unique insights, the cause of the business cycle, is to observably true that perpetually denying it strikes me as peculiar for otherwise intelligent people. And its original prophetic work, the critique of socialism along with the elaboration of the concept of economic calculation, sums up much of the 20th century.
If you believe that Western culture is important, you implicitly recognize the value of freedom. Being that tyranny typically comes out of desperate populations, I think it’s paramount to save the beacon of human freedom in the world, the United States, from severe depression. It would be an epochal power change, and I don’t care to experiment with the potential combinations involving the China/Russia/Iran hegemonies.
Go ahead and slander those who defend human liberty and individualism. Mock my alleged inability to distinguish among political groups. While you’re at it, do everyone a favor and stir up some animus against bank bailouts and monetary intervention.