The first thing we do, lets kill all the investment bankers.
Well, I recently read a few interesting articles: Californians Lose $1 Billion From Unconstitutional Bond Sales and The Looting of America: How Wall Street Fleeced Millions from Wisconsin Schools. Even if one doesn’t have the time and inclination to read them, note that one is from an unabashedly liberal site, while Bloomberg.com is owned by the eighth richest man in America. To summarize both of these articles, it seems that Wall Street investment bankers targeted the billions of dollars of investments that school boards across the country held, and talked these people into buying into really sketchy investment schemes.
I have some big problems with this. Public moneys held in trust, and it’s hard to imagine anything much more public than educational funds, should be placed in the safest most secure investments possible. Instead, because school boards knew nothing about these complicated derivative schemes, and even the sellers in some cases didn’t know much, they invested their money in ways that only made money if the economy and national real estate prices kept rising. If the economy and especially real estate prices took a downturn, they would lose it all. This is a pretty risky thing to do with money for schools, and while the school boards “should” have known better, that doesn’t change the fact that a lot of fancy investment bankers that did know better bamboozled them into making these poor investments. Because no matter what, the investment banking houses (an oxymoron nowadays) that sold these goods made a fortune in fees, and their profits in the deal were guaranteed.
I also found this interview with the author of the book: Q&A with Les Leopold. It was illustrative too, he reiterates the greater point that most people still don’t get. Yes, the US economy grew by leaps and bounds after World War Two, and the middle class prospered right along with it. Then, in the mid seventies, it all started to change. The rich kept right on getting richer, but the middle class stalled. And the gap has continued to grow since then. And a huge part of this is that the money that should have been re-invested in the basic nuts and bolts economy (the way the Free Market advocates like to claim is the “natural” result of deregulation, snort) instead was invested in this giant fantasy investment market. So the financial sector of the economy kept right on growing, but the rest of us were left to fend for ourselves.
Or, as in the case of the above mentioned school boards, people were robbed blind by these financial “wizards.” We let the bankers make up the rules, and the results were predictable. Imagine playing a game of Monopoly, where the player who was the banker was allowed to make up and enforce whatever rules he/she wanted? How would the game end? The banker would get all the money and all the property every time of course, and there would be nothing the other players could do about it. And that, in essence, is the story of the past 30 years in the USA and the roots of our current economic problems. (Some would date it to 1913 and the creation of the Federal Reserve.)
And I don’t use the word robbed lightly either, these predatory investment bankers knew exactly what they were doing, and they had the power of the law behind them. Because the authorities have been co-opted into a crime doesn’t make it less of a crime. It makes me angry and frustrated. Angry because the greatest theft in history has taken place before my eyes, and frustrated because not only can’t I do anything about it, I don’t even have any good ideas.
Except blog about it of course. And throw in things like firing squads to get people’s attention. I’m not seriously suggesting putting investment bankers up against a wall and shooting them. Still, their crimes are very much crimes of premeditation and deliberation. And while I am not a big advocate of the death penalty, mainly because it won’t deter the sorts of crime people want to use it for, if we put a few bankers up against the wall and shot them for stealing billions from children’s schools … it might have a very salutary effect on the rest of them.
I don’t know what’s going to happen, but I do know that we can’t all be rich investment bankers, so something is going to have to give sooner or later. Only so much wealth can be transferred upward before there’s no wealth left to transfer. When that day happens, we’re in for some fun.
Read the links, see what you think:
(The above image is a Soviet infiltrator being executed by a Finnish firing squad during World War Two. It is public domain under Finnish copyright law. As far as I know it’s real, at the very least it was a real moment in time. That alone never ceases to amaze me about old photographs. As for the title: “The first thing we do, lets kill all the lawyers.” is from Shakespeare’s Henry VI, part 1.)