The rhetoric of fear made its way into the election as still President Bush (for 111 more days) put on his serious face, stared into the camera, and lied to bail out his Wall Street pals just like he did for his oil buds six years earlier.
They need us to buy into this Ponzi scheme, disguised as reform. Part of the lie is to make it sound so big and outside our ability to understand. I prefer simplicity.
An example of how it would work is the Blockbuster business model. Wayne Huizenga is a brilliant businessman. Living in South Florida at the time, I was able to watch him grow. After several successful businesses, he started renting videotapes and DVD’s through his creation, Blockbuster Video.
Blockbuster taught him a simple principle, if there was an asset you could re-sell and re-use (thus earning income) over and over again, you could make an infinite return on your initial investment. He would rent videos earning much more then the purchase price then re-sell the asset at a discount but still make a huge profit.
He bought Alamo and National Rent a Car and founded AutoNation. He would buy the auto fleet from a manufacturer at volume discount, earn back the purchase price++ renting the autos to customers, then sent them over to AutoNation to re-sell at 60-70% of what he paid and made money three ways on the single automotive asset (asset depreciation on his books being the third way).
Simple and brilliant.
And that is what Wall Street wants us to buy into now.
They took assets (mortgages) re-packaged them as securities (sub prime paper) and sold them (making huge commissions) and now want this package where the government buys the bad debt paper, they make money on the transaction and a commission when the loan is re-sold while we hold the bag.
Simple and brilliant.
CEO pay accountability is the tip of this iceberg. It’s what gets printed in the annual report and everyone, including politicians and Joe Six Pack can easily see. The top traders though at Lehman earned more than the CEO. And any reform has to impact these speculative traders and their ill-gotten gains.
Even the Archbishop of Canterbury here in England yesterday said shame on you for this un-Christian like behaviour to top traders robbing from the poor to give to themselves.
We were scared into the Iraq War. When Dick Cheney went to Capitol Hill this week to cow his Republican cohorts into accepting the bailout, because… he said so, he barely escaped alive. With his political capital in shards, he slinked out of there scowling more than usual.
When former majority leader Dick Armey tells an author in tears that he felt betrayed because Cheney came privately to him and said look, Saddam has a suitcase nuke… he had no choice but to rally the party. There is no limit to the lengths they are willing to go.
Now with dire threats of a 1930’s style Depression unless you do this bailout our way leading the talking points list, Congress and the public aren’t fully buying it.
Even perky, spunky Sarah Palin entered the media fray with her third interview. This time it was with the anchorwoman who epitomised perkiness whilst host of The Today Show, Katie Couric. Couric tried her best to pin Sarah down where “Charlie” (Gibson of ABC News) failed.
Katie looked pissed. She neither hides her emotions (disdain in this case) well nor suffers fools lightly. It was clear she did not like this woman masquerading as Veep candidate.
So in the specifics, Congress needs to do more than symbolically go after CEO pay, they need to frog-march those responsible to jail and seize/sell their ill-gotten assets.
Where are they?
Well in the words of Sarah to Katie when asked a third time what, specifically, John McCain has done being pro-regulation, “I’ll try to find some and I’ll bring ‘em to ya.” I would love for Rachel Maddow to have two minutes with her.
Denis Campbell is a US journalist based in the United Kingdom. He contributes to newspapers and magazines, is a BBC Radio election commentator and publishes the daily e-magazine The Vadimus Post from the Latin Quo Vadimus – where are we headed and do we know why?
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