Time has an article in posted on January 22, 2011 by Zachary Karabell titled The Big Bad Bankers, and Their Bonuses, Are Back.
The money quote:
“There was a period of remorse and apology for banks. I think that period needs to be over.”
This is from Barclay’s head Bob Diamond. He is expected to take home a $13 million bonus this year. Because he deserves it.
His shareholders have received meager dividends (if any) since 2008.
Goldman Sachs employees won’t go hungry either. The bank’s fourth-quarter earnings may have been hurt by weak trading results, but it is still hugely profitable. Like many other Wall Street firms, Goldman responded to public outrage over its billions in profits by adopting a lower profile when it comes to bonuses, instructing its executives to take more of their pay in deferred stock grants rather than cash and conducting internal reviews (the result of one such 63-page tome can be abbreviated to “We didn’t really do anything wrong”).
This is the kind of thing I reflect on when I get the talking point from the right that most rich people worked hard and deserve the amount of money they make.
Most is incorrect.
The blatant examples of compensation with no accountability and no ties to actual performance are the rule, rather than rare aberrations.
They are making money by holding tightly on to their capital and lending almost nothing to anyone. They deserve multi-million dollar bonuses for that?
Huge banks have their fingers in every aspect of our diverse economy. Unfortunately, their failure would inevitably lead to economic collapse. They are, indeed, too big to fail.
Three firms alone — Bank of America, JPMorgan Chase and Citibank — now control as much as 30% of all deposits in the U.S.
But the arrogance and swaggering irresponsibility exhibited by these asshats makes me wonder if letting the big bankers fail might not be a blessing — a clearing of the slate to rebuild on a stronger, better-regulated foundation.
It’s apparent these giants of finance haven’t learned a damn thing, so it’s likely we’ll get a chance to test this out.
I agree with Karabell’s proposed solutions to this mess:
The bottom line is that the financial reforms of the past year need to be revisited. One solution would be to break up large banks into discrete parts, creating a new Wall Street of boutique banks without as many conflicts of interest. If we aren’t prepared to do that (and there’s a good chance we aren’t, given the likely cuts in pay and staff that would impede regulators and other public-sector workers), we need to create incentives and mandates to lend. Period. It would have been easy to make those part of the bailouts of 2008 and 2009; now it will require carrots like allowing banks more latitude in accounting for bad loans. That will be seen as extending another hand to already flush banks. Unfortunately, it may be a price we need to pay.
- Barclays boss Bob Diamond to overhaul bonuses (dailymail.co.uk)
I don’t have any great expectations for the State of the Union address tomorrow night.
Paul Krugman has been critical of the signalling coming out of the White House:
The Competition Myth
Robert Reich has a blog summarizing how our country got to it’s current state and what the president should do about it:
The State of the Union: What the Presideny Should Say
There’s much truth in what both of these economists say.
But Obama has spent much of his time trying to appease business interests and surrounding himself with the movers and shakers from the very corporate enclave that helped create our current economy.
It’s not clear exactly what helpful policies will be allowed to see sunlight in a setting in which the president is bending over backwards to satisfy big business.
- Report: Obama to Call for New Investments in State of the Union (news.firedoglake.com)
A friend of mine shared a link on Facebook today about the book business.
“Barnes & Noble Up, Borders Down” details B&N’s celebration of fourth quarter sales by the New York-based (and largest book retailer in the world).
However, the sales did not really come from selling paper books.
The company attributed the gains partly to interest in its e-reading devices, especially the Nook Color, which was introduced last fall.
I have worked at a bookstore on and off for 15 years, and have noticed a steady decline in the number of people who come in regularly to browse and buy.
The regular browsers have disappeared, having purchased an e-reader of one kind or another.
Despite the sales pitch, these devices are anti-social and raise some serious concerns about the future of society and our political system.
- Eliminate face-to-face human contact and the direct dialogue.
- Help foster the already rampant epistemic closure that threatens the free exchange of ideas (something necessary in democratic society).
- Put a reader’s access to information in the hands of corporations (see digital rights management).
- Remove the incentive to publishers to actually produce physical books (why go through the expense, when you can put a file up on a server?)
- Will cost hundreds of thousands of jobs, once enough people purchase them and make physical books way too expensive
- Will bar information access to people who cannot afford computers, e-readers and the cost of books
Much of the above has already happened with the proliferation of a cable news station devoted to partisan bickering and the equally virulent sites on the internet.
Most young people don’t read, and most older people only read what the personalities on television tell them to.
The kids I see in bookstores almost invariably are there for an assigned book (ridiculously mispronouncing book titles and authors) or for the latest in teen “romance”.
There is actually a section of on major retailer for “teen paranormal romance”.
Older people come in to get books on the bestseller list, or political books they see hawked on television by Fox News drones.
Fewer and fewer come into the bookstore to really browse and intelligently seek out books on interesting subjects.
People are told what to read, usually by a corporate marketing machine, or a political propaganda outlet. Obediently they shuffle in, grab the book in question, and leave — never glancing at anything else in the store.
We have become a nation, perhaps a world of sheep-like consumers, conforming to marketing needs of corporations.
How else to explain the runaway success of the offensive “Eat, Pray, Love”?
E-reader devices are only going to accelerate this process, and make it harder for people to break out of their boxes and expand their horizons.
Can you imagine that browsing books online will ever be as satisfying as wandering any bookstore and finding a previously unknown work that immediately grabs your interest? Me neither.
Don’t get me wrong, I love gadgets, and some of the e-readers are nifty and do some amazing, useful things, but I fear that the end of printed books is closer than you may think.
Last nail? Meet coffin.
Soon, books may go the way of the CD, and the DVD movie rental place.
Hopefully, creative people can come up with solutions to the above problems that the end of print will bring, but I am not optimistic.
I can’t help being sad about the decline of books.
In my lifetime, I have seen the beautiful artistry and package design of LP records shrink to the palm-sized jewel cases for CDs, which will soon give way to files on a thumb-sized MP3 player.
Similarly, I have seen the death of Betamax and VHS, and the birth and decline of DVDs and Blu-Ray — which will likely be supplanted by file downloads before I die.
The saddest part of all for me is watching the parade of people in and out of the bookstore, who don’t realize that with every “I’ll just order it online” and “I just got my Kindle/Nook/Sony” they are helping kill a piece of culture that I have had a personal and satisfying relationship with.
For the time being, I will console myself with a long-standing practice: I will continue to hoard books in my apartment, collecting sturdy volumes of classics and my favorites to pass on to my children and to lend to (trustworthy) friends.
As Egon says in “Ghostbusters” — “print is dead”.
Long live print.
- Why Nook Beat Print at Barnes & Noble (pcworld.com)
- Kindle is Amazon’s all-time best-selling product; Kobo and Nooks sell out during holidays (techvibes.com)
- iPad vs. NookColor: eReading Death Match, by Nico Vreeland (teleread.com)
- Barnes & Noble: Online Holiday Sales Up 67 Percent Thanks To The NOOK’s Popularity (techcrunch.com)
Another home run for Matt Taibbi at the Rolling Stone:
If you’ve read Thomas Frank’s “The Wrecking Crew”, you will be familiar with this story.
I have little to add. Read the story. Brilliant and demoralizing.
Update: Even more beauty – TPM brings the news of the sea-change in ethics washing over Congress.
“Old DeLay Hands Still Part Of GOP Leadership Under Boehner”
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