Cut ‘em off
The War on Drugs having proved pretty much unwinnable, maybe we should try a War on Greed. It's as addictive as drugs, and as dangerous to society. Drugs didn't bring the American economy to the brink of collapse, where it wobbles still. It was the financial industry's lust for profit, by any means, that got us into this mess, and will keep us there until the people's government stages an intervention, and rather forcefully. At the very least, America must stop feeding the money fiends' appetite. At most, jail terms might be in order, though realistically relocation of the worst offenders from Wall Street to the Big House is probably too much to hope for. They have connections.
News reports show clearly that the profiteers can't control their own base desires:
•The once-mighty, now-bankrupt Lehman Brothers investment bank arranged millions of dollars in bonuses for fired executives even as it begged for a federal handout. The firm's chief executive officer, Richard Fuld, accepted compensation of almost $500 million while the company headed toward bankruptcy, and he sneered at shareholders' suggestion that top executives forego bonuses. Rep. Henry Waxman of California has said, “While Mr. Fuld and other Lehman executives were getting rich, they were steering Lehman Brothers and our economy toward a precipice.”
•Despite five straight quarters of losses and a 70 percent drop in the value of its stock, Merrill Lynch & Co. is allocating $6.7 billion for executives' bonuses. Bloomberg News reports, “The worst financial crisis since the Great Depression, a $700 billion taxpayer bailout, public outcry over excessive pay and the demise of three of the biggest securities firms won't deter Wall Street from offering year-end rewards to employees on top of their salaries, compensation experts say.”
•Banks that are receiving more than $163 billion from the Treasury Department for new lending are using more than half the money to pay dividends to their shareholders. Sen. Charles Schumer of New York and others are asking that the government require a suspension of dividend payments. That would be one small step for rectitude.
So far, all the government has done to combat the financial crisis is turn over more billions to the people who brought on the crisis. The bailout may have been necessary, but it's not nearly sufficient. From post-Depression until the deregulation fad of the 1990s, government kept the bankers and securities pushers more or less in line. In correction of a huge mistake, the financial industry must now be re-regulated. The industry has proved all too painfully that it cannot be trusted to regulate itself.