Christmastime is bonus time on Wall Street, and the Gucci set has been blessed with another record harvest.
Forget the turbulence in the financial markets and the subprime debacle. Forget the dark clouds of a possible recession. Bloomberg News tells us that the top securities firms are handing out nearly $38 billion in seasonal bonuses, the highest total ever.
But there’s a reason to temper the celebration, if only out of respect for an old friend who’s not doing too well. Even as the Wall Streeters are high-fiving and ordering up record shipments of Champagne and caviar, the American dream is on life-support.
I had a conversation the other day with Andrew Stern, president of the Service Employees International Union. He mentioned a poll of working families that had shown that their belief in that mythical dream that has sustained so many generations for so long is fading faster than sunlight on a December afternoon.
The poll, conducted by Lake Research Partners for the Change to Win labor federation, found that only 16 percent of respondents believed that their children’s generation would be better off financially than their own. While some respondents believed that the next generation would fare roughly the same as this one, nearly 50 percent held the exceedingly gloomy view that today’s children would be “worse off” when the time comes for them to enter the world of work and raise their own families.
That absence of optimism is positively un-American.
So the non-churchy crowd can mark this up to “survival of the fittest,” presuming that the folks whose ancestors left a wad of precious metals behind are somehow of a stronger breeding stock. If this isn’t ridiculous enough, the churchy crowd follows suit with justifying amassed excesses with “the manifest will of God (Reformed)” or “the birthright of the believer (Charismanic).” Folks who don’t officially belong to either group just like to go along with their “common knowledge” without thinking about it too much. After all- It feels good not to be obligated, right? I think Jesus had a few words about all that, and to take His words seriously about true riches is to see that Kreflo does not have the dollar, and Donald does not hold the trump.
I’ve been reading those same poll results for decades, and we have yet to see the onset of the Apocalypse. That said, I wonder if Bob Herbert lives similarly to his fellow NYT op-ed scribbler, [url=http://www.powerlineblog.com/archives2/2007/12/019305.php]Tom Friedman[/url]:
[i]I lived within shouting distance of Friedman. Take a look at the carbon footprint this guy leaves. He lives on about seven acres — it was once the home site of a prominent Washington attorney…The house sits on a hill with a great view and a western exposure. Friedman bought the house from the late lawyer’s family about five years ago, tore down the huge older house and constructed an [over 11,000] square foot residence, with 7.5 bathrooms, on the hilltop. It is beautifully landscaped, as you can tell from the aerial/satellite photographs, and the foliage likely requires a lot of water. The property is listed on the tax rolls for [well over $9,000,000]. It makes me feel better that those who preach environmentalism practice such a modest intrusion on the environment itself. [/i]
Take a look at the next cubicle, Bob, for your overpaid fatcat.
Jeffersonian – um – why the ad hominem attack? Tom Friedman writes for a living and gets paid by honest work. If you look at Wall street, they are moving other people’s money around with models nobody understands.
A friend of mine who just got a $100,000 bonus as a trader of some sort said to me, “all I do is click my mouse. I’m a good clicker.” He smiled and said, “I’m not a good person, father. I just want to make a lot of money. I love our system.” Then he bought me a drink.
Mr. Herbert omits to mention that one major reason Americans are drowning is the crushing tax burden, federal, state and local, which without exception increases every year. Governments are much more sly about sucking money out of citizens. Now new taxes are called “recycling fees,” “affordable housing requirements,” “sewer upgrade fees,” “universal cable access fees,” “carbon taxes,” “911 emergency system upgrade charge,” “fuel tax surcharge,” and on and on and on. For an example, take a look at your phone or cable bill.
Jim, you are right. The greater the tax burden the lower the actual money supply, the more restricted growth capital which would otherwise allow (not “create!”) new jobs and small business growth which is, arguably, the very backbone of the economy. The question I would really love to keep in the discussion, though, is not what other person we can blame for the current problem, but what can we, who call ourselves “Christian,” do either to turn it around or at least keep the damage from being as bad as it is. If I have two coats, and I know that someone is shivering for lack of even one coat, what does Alan Greenspan have to do with whether I obey my Lord and give that poor man my spare? We’re not all called to be bankers, or economists, or politicians, but we are all “called to be saints.”
[blockquote]Jeffersonian – um – why the ad hominem attack? Tom Friedman writes for a living and gets paid by honest work. If you look at Wall street, they are moving other people’s money around with models nobody understands. [/blockquote]
Unless said money-shuffling is entirely random (and if it is, why are these firms paying all of this money to these guys instead of hoarding it themselves? They are axiomatically greedy, right?), then these money managers are providing a service through the use of their specialized knowledge. They make money for people like you and me when we invest. To disparage this act as “just clicking a mouse button” is ridiculous. Why not disparage the obviously well-paid Mr.’s Herbert and Friedman for “just tapping on keys all day” as if they were part of a million monkeys in front of a million word processors trying to crank out King Lear?
God help us if we ever have Bob Herbert deciding what you and I should be paid.
Jeffersonian, you seem to imply that people who handle money aren’t susceptible to human greed and folly. You remember the story of Jonathan Lebed, right? But in the end the way people invest has little to do with firms creating value, than with a more sophisticated form of gambling.
Jim – who is going to pay for this expensive war? Taxes pay for our legal system; they pay for roads; they pay for the institutions that ensure liberty. health care is more of a crishing burden for people than taxes. And without taxes, lots if things will get much more expensive.
You have an idealistic view of human nature if you think that the wealthy are more deserving than the poor.
[blockquote]Jeffersonian, you seem to imply that people who handle money aren’t susceptible to human greed and folly. You remember the story of Jonathan Lebed, right? But in the end the way people invest has little to do with firms creating value, than with a more sophisticated form of gambling. [/blockquote]
Quite the contrary, John, I am assuming that those who dole out these bonuses are indeed quite greedy. So greedy, in fact, they would much rather hang on to that $38 billion than hand it over to these money managers as bonuses. If said managers are just performing a chimpanzeean level function of clicking a mouse randomly, their bosses are guilty of the most gross malfeasance. Given certain firms’ long track record of performing better than the market, it’s clear they know something you, frankly, do not.
[blockquote]Jim – who is going to pay for this expensive war? Taxes pay for our legal system; they pay for roads; they pay for the institutions that ensure liberty. health care is more of a crishing burden for people than taxes. And without taxes, lots if things will get much more expensive. [/blockquote]
JW–That’s the myth; that taxes are actually being spent on doing things. The fact is most of it gets sucked up along the way and never gets to where it’s supposed to go. That’s why government “feasibility studies” just to decide whether to do something cost over a million dollars. That’s why putting up a community destination sign in my area cost $800,000. It’s why the county spends millions of dollars designing and building useless roundabouts when a four-way stop would work just as well. It’s why we just got a letter from our mortgage company saying that we were being assessed a $2,000 increase to our mortgage impound account, because the mortgage company determined that would be the amount of increase in our sewer fees this coming year. We had 30 days to come up with that money or face foreclosure. Why? Because the previous county administration had looted the sewer trust fund to pay for union contracts and make-work construction programs for political supporters, and now we’re being sued by the EPA for failure to properly maintain the sewer system and we all face special assessments to pay for things we’ve already paid for, but the money in essence was stolen by the government. Our roads are falling apart, for the same reason the sewers are. Why is health care so expensive? In part because the government requires the health care system to treat people on Medicaid and then won’t reimburse the cost. That increases the cost of medical care for the rest of us and forces us to pay for the government stiffing the health care system. We pay out the nose for public education. And yet the schools supposedly cannot afford to buy textbooks, and the buildings are all falling apart. And then, let’s take the myth of recycling. Our State and county fight over who can scam people the most over this. Initially, the county said it would do recycling for free as part of what we already pay for in garbage pickup services. Then the State legislature enacted a law imposing “deposits” on the purchase of all recyclable containers. But that’s ok, we can get the money back if we go to their recycling centers. But then we find out that the more we actually recycle, the more they are going to increaase the “deposit” on the containers, because they won’t make enough money from the deposits to “run” the program if people actually recycle instead of continue to throw the containers in the rubbish. Then the county, not to be outdone, says they are going to institute mandatory recycling curbside, and that they are going to halve the garbage pickup service and yet impose an additional recycling fee to pay for their mandatory recycling program. So the county is now going to charge us to separate and put curbside the same recyclables which the State is already charging us for if we don’t return them to the State recycling centers. But the fact is, neither the State or the county are actually recycling because they can’t find anyone in the private sector who is willing to take the materials. So it just sits in lanfills or will be put on barges to be sent elsewhere. It is just getting absurd.
Jim, you must be in a different state.
The reason for all the dysfunction is not too much money, but too little. The different organizations are all fighting for little money, costing the system even more money. If you want something to work – as a corporation knows – you invest in it.
As far as education – you could be right, but lots of people still prefer to pay for expensive colleges unless the state subsidizes good schools. Good public schools cost money.
Of course there will always be some waste. The myth is that corporations waste less than the government. Check out how Halliburton and Blackstone are using our money in Iraq. You mention small things (recycling centers?). But medicare works much better than medicaid, in part because corporations don’t want sick poor people.
You didn’t answer the question: who pays for the war if we don’t pay taxes?