Eject Eject Eject » TONE DEAF

Email This to a Friend

March 25th, 2009 11:38 am

TONE DEAF

One of the reasons I often come late to a story is because I enjoy watching them spin and evolve: it’s like a pachinko ball bouncing back and forth on the way down to bell-curve oblivion.

And so with the AIG story. First outrage, then outrage over the outrage, then the actual facts start to roll in: bonuses contractually obligated, which would not have been paid if the company had been allowed to fail, and so on.

We get to watch the very politicians that wrote the bill running around with their hair on fire, outraged about the bill. So they got the bonuses, which were then going to be custom-taxed, which were then returned, and tomorrow? Who knows? Off we go!

But despite the fact that the ginned-up outraged is a smoke screen hiding the real large-scale larceny, the fact remains that failed corporations paying bonuses or buying executive jets on taxpayer money is indeed something to be furious about. When Lee Iacocca asked for federal help with the situation he was hired to fix at Chrysler, he took a dollar a year salary until the loans were repaid; which they were, and seven years early, at that. The performance of Tylenol after their horrible poisoning scare, and Southwest Airlines after 9/11 also leap to mind as examples of outstanding corporate leadership, as do the thousands and thousands of sound judgments carried out each day by small businesses, based on nothing but common sense, integrity, character and a dedication to their customers.

Not much of that is on display these days. In fact, the attitude of some of these big corporations, with their hat out in one hand as they write enormous checks for luxuries with the other, is so out of touch with the mood of the country, so absolutely and utterly TONE DEAF that I was trying to think of the last thing I read along these lines that was this damned outrageous. And then I remembered it, and I want to share it with you since it’s such a great story.

This man is someone you, and everyone else in the world, should know. His name is Wallace Hartley. Wallace Hartley was not a great general or a politician. Wallace Hartley was a musician. A young Englishman from Lancashire, he was 33 years old when he took – with misgivings – a job as bandleader on the most remarkable ocean liner of his day.

Just after midnight on the morning of April 15^th, 1912, Wallace Hartley and the rest of his orchestra awoke to discover that their ocean liner had struck an iceberg and was sinking into the ice-cold North Atlantic. Hartley gathered his musicians, and in the space of a few minutes, these men made a decision.

These are names you should know as well: alphabetically, they were Theodore Brailey, Roger Bricoux, John Clarke, Jock Hume, Georges Krins, Percy Taylor and John Woodward, of whom no photograph survives.

These eight men, decided, as a group, to return to their cabins, retrieve their instruments, and then emerge to the deck of the sinking Titanic in order to play lively tunes to calm the terrified passengers and keep up the spirits of those facing their imminent death in the freezing water.

It was widely reported that their final song was the haunting hymn, Nearer My God to Thee. It certainly makes a great story. But the fact is, the musicians wanted to keep people’s spirits up, and Nearer my God to Thee is almost a dirge. Historians – after much argument – have concluded that the most likely tune they played as the ship slid away beneath them was Songe d’Automne, sometimes simply know as Autumn.

I’ll ask you to put yourself now in their place: eight very young men, ranging in age from Wallace Hartley, 33, to Roger Bricoux, who was only twenty. Lifeboats are being lowered, many of them unfilled.

You are not a ship’s officer. As a matter of fact, technically speaking you are not even on the ship’s payroll. All had been forced to take a pay cut, from six pounds ten shillings down to four pounds, and their 10 shilling uniform allowance – that was about two dollars and fifty cents a month – had been cut out completely as exorbitant. When these men complained about the pay cut to the White Star Line, which owned Titanic, they were told that hence forth they would not even be paid the token shilling that made them crewmembers. They would be carried simply as Second Class Passengers.

And that’s what they were on that morning. Underpaid, overworked, second-class passengers who had every right to try and gain a place among the 338 men that survived to tell the story, a story ennobled by the universal praise from the survivors for these eight men who did not run from a duty that existed not on paper but only in their own magnificent hearts.

None of them survived. Not one.

Several weeks after the sinking, the grieving parents of violinist Jock Hume – body number 193 — received a small note, almost lost in the mountain of condolences.

It was from the talent agency that represented all of the musicians on the various transatlantic liners. It read:

Dear Sir: we shall be obliged to you if you will remit to us the sum of five shillings and four pence, which is owing to us per enclosed statement. We shall also be obliged if you will settle the enclosed uniform account. Yours Faithfully, C.W. and F.N. Black.

It was a bill, in the amount of about three dollars and fifty cents, for the uniform that Jock Hume was wearing at the time he gave his life for the rest of the passengers onboard the greatest maritime disaster in history. They billed him for the uniform they found him floating in, that he actually had no obligation to wear since, like the other musicians, he was not technically an employee of White Star Lines and was paid by the agent, rather than White Star.

When the parents of the musicians went seeking some small portion of the damages being awarded to survivors by the courts, they were told by Black and Black that this was White Star’s problem, and then told by White Star that they were simple free-lancers employed by Black and Black.

And so while Black and Black were busy trying to get their three dollars and fifty cents off the family of one of the most heroic men that ever lived, and whose death benefits were denied by White Star’s chief, Bruce Ismay...

...who did survive, being lowered into a lifeboat to the calming strains of Autumn being played by eight underpaid musicians, not one of whom would live for another hour… While all of this shabbiness was going on, searchers finally found Wallace Hartley, body number 224, floating in the Atlantic where he done his duty not to White Star, but to humanity.

And at his funeral, forty thousand people stood in silent memorial. Afterward, people would cross the street to avoid Bruce Ismay.

I repeat this story for two reasons: one, it bears repeating, and often. Two, so that you realize that the sort of corporate tone-deafness that would buy multi-million-dollar French executive jets on public money is not a new thing. What is new, this time around, is that no matter where you look, there is not a single hero to be found… let alone eight of them.

Pajamas Media appreciates your comments that abide by the following guidelines:

1. Avoid profanities or foul language unless it is contained in a necessary quote or is relevant to the comment.

2. Stay on topic.

3. Disagree, but avoid ad hominem attacks.

4. Threats are treated seriously and reported to law enforcement.

5. Spam and advertising are not permitted in the comments area.

The clause regarding "hate speech" has been deleted because readers criticized it as being too loosely defined. We agreed.

These guidelines are very general and cannot cover every possible situation. Please don't assume that Pajamas Media management agrees with or otherwise endorses any particular comment. We reserve the right to filter or delete comments or to deny posting privileges entirely at our discretion. If you feel your comment was filtered inappropriately, please email us at story@pajamasmedia.com.

94 Comments

1. stringray13:

The obvious, poetic solution would be to round up the subhumans that so abuse the taxpayer’s money and put them on a large oceanliner aimed at an iceberg.

We can dedicate this voyage to the Band.

Mar 25, 2009 - 12:42 pm 2. Otto Gass:

There are plenty of heroes playing the tune of liberty, but they’re relegated to the lower decks, rendered invisible.

As to who’s on deck now on our behalf, you’re quite right.

Speak! you Representatives of our Republic, we still have boats, but not much longer…

Mar 25, 2009 - 1:27 pm 3. Blaine:

I second Otto
“…do the thousands and thousands of sound judgments carried out each day by small businesses, based on nothing but common sense, integrity, character and a dedication to their customers”
Disproves your point. But it would be nice to have them leading the charge rather than the band so that the band can live to play another day.

Mar 25, 2009 - 1:47 pm 4. MuscleDaddy:

Indeed.

Now, as then, there are plenty of band members.

This time, however – they’ve been downgraded to ‘Steerage’ – the ‘Captains’ having been swept along by the shrieking mob.

– MuscleDaddy

Mar 25, 2009 - 1:55 pm 5. Mrs. du Toit:

We don’t have enough information to make these sorts of judgments. We do not know anything except a raw number. We know who was involved in AIG during the disaster (people including Joseph Cassano), but we do not know who was paid a retention bonus to clean up the mess, those who were fired left behind.

For all we know, the people who took some of those bonuses were entitled to more, tried to whistle blow as others did (who were fired when they did so).

A public lynching of the remaining staff of AIGFP is unwarranted. There are plenty of people who have done the wrong thing, but we need to be careful about putting everyone in that same tainted basket.

Bill, if you had been part of a company that was involved in this sort of thing, you’d have stayed around to clean up the mess. Should you be tainted by association? Should you not be paid what you were promised to see it through? How much is too much?

While it is noble to suggest that people should work for nothing, the fact is that Lee Iacocca had the benefit of wealth to enable him to work for $1 a year. I don’t have that luxury, nor do I suspect, the people who are staying on board the USS AIG while it sinks into the deep.

We shouldn’t be afraid to continue to be proud Capitalists. We need to be educated Capitalists and reminded that the only thing better is nothing we have thought of yet. Capitalism doesn’t prevent greed or the unscrupulous from playing their reindeer games. It only identifies them.

Every person who bought stock in any of the failed companies should be similarly vilified, because they were just as responsible for feeding their greed as anyone directly involved. As long as they were seeing a ROI, they didn’t care how it was made. If folks didn’t know enough to know what was going on, then they had no business making that investment.

Capitalism shows its greedy skin when the people no longer include morality in their purchase/investment decision making process. Most of us are guilty of that.

The Big Takeover

Mar 25, 2009 - 2:36 pm 6. Bill Whittle:

Connie, greed and risk were once intertwined. You want a high return, you take a big risk, and no crying about it afterwards. Regardless of the specifics of the AIG details and who did what when, the fact remains that the primary source of outrage is that it looks like people are being rewarded for failure.

When failure is rewarded, you have… well… Hollywood. I am ALL ABOUT having the freedom to take a risk for a high reward. But so much of this crisis seems to be due to the fact that no one ever thought prices could go down — they can, in fact — and the bottom line is the lesson we take going forward: if you are NOT ALLOWED TO FAIL, then why NOT take this monumental risks?

Mar 25, 2009 - 3:53 pm 7. Bill Befort:

Thanks. Reminds one of the contemporary newspaper verse about Ismay and Captain Smith:

To hold your place in the ghastly face
Of death on the sea at night
Is a Captain’s job; but to flee with the mob
Is an Owner’s noble right.

By the way, one leading theory is that what the Titanic’s band played at the last was a hymn whose tune, at least in Episcopalian hymnals, is called “Aughton.” Better known by its first words, “He Leadeth Me,” it was composed and written by two Americans during the Civil War. According to my 1940 hymnal it’s to be rendered “with vigor,” and the final verse is magnificently appropriate:

And when my task on earth is done,
When, by thy grace, the victory’s won,
E’en death’s cold wave I will not flee,
Since God through Jordan leadeth me.

Mar 25, 2009 - 6:36 pm 8. Otto Gass:

um, Jake DeSantis has a point – and from what little I know he doesn’t resemble Bruce Ismay.

But he is a target of the broad brush. If I take his explanation as given in the NYT letter, it is a mistake to conflate his presence at AIG with those of the Gordon Gekko types.

We’re all bound to cry some as we peel this onion.

Mar 25, 2009 - 7:00 pm 9. Mrs. du Toit:

Bill, I agree completely that people should get whatever is on the receiving end of risk: profit or loss.

You’re assuming that failure is being rewarded. Do you know that? Do you know, with absolute certainty, that the folks who received their retention bonus are evil, greedy bastards, who set about to separate innocent people from their money? Might some of them be working their asses off, trying to clear the desks of the divisions that are closing? That’s what YOU and I would be doing. I haven’t seen one of these contracts (because they’re private and I have no right to see them), but I have no information on which to make a judgment that all the folks who got paid were good or bad.

But this is like blaming a casino for a granny betting her life savings at the crap table.

Is it news to people that investment is gambling? It is no different from going to a casino.

We’re operating so outside of normal that it is hard to address these issues with any reasonableness. The world, especially Congress and the POTUS, has gone so far away from Constitutional limitations it has become more surreal and tacky than an Ed Wood film.

We keep hearing about the loss of wealth, something close to 50% of retirement savings has disappeared. Well, where did that savings come from that is now halved? In many cases, that money doubled, doubled, and doubled again because small time investors were riding the wave of the bubbles. That wealth was manufactured in this same market that has crashed. It has now gone down, something that far too many people did not think could happen.

Guess they know now!

People have been making money on money, not by producing goods and services. The piper has arrived.

I’m not saying that there aren’t people who are guilty of playing fast and loose with the rules. I’m just saying that they didn’t do it in a vacuum. They had an endless line of people ready to hand over their cash, who are now crying because the party is over, and they expected the government to perform the due diligence, instead of understanding that they were required to do it themselves. They didn’t mind being ignorant when it was paying off.

The real tragedy is that folks who didn’t take those risks are expected to pay off the bookie for those who did.

The market was artificially high because of all the automatic contributions to IRAs and 401Ks. The government created that gravy train by offering tax incentives to do it… and the Federal Reserve has been throwing another $5 to $6 trillion at the problem, beyond the unconstitutional and unholy bailouts.

There is a LOT of blame to go around on all of this and I don’t think the remaining folks at AIG should be made out to be scapegoats, nor should “Capitalist” ever be inferred to be disparaging. There is nothing wrong with making money and being proud of being a prosperous Capitalist. It is how you make your money, not how much, that matters.

It’s a nice scenario to think that folks should all pull together and set aside their paychecks to help us through this mess. Should that sacrifice be made ONLY by the folks who in bailed out industries? If so, why? Why not ask every American to take a 50% cut in pay.

I don’t see how you can make a moral case that we’re rewarding failure in one sector, and not EVERY sector. Everything is being artificially maintained by these bailouts… the auto workers and their suppliers, the banking/financial industry, the housing/real estate industry, the insurance industries, the stock market, etc. Should they all work for $1 a year?

Should people who sold their houses in L.A. a year ago, who made a killing on the sale, be told to give the money back to the person who bought it, because the property is no longer worth what they paid for it? Should the real estate broker return their commission? The title company return their fee? Why is a contract signed last year in an insurance company any different? If you had a contract that said that you got 5% of every sale you made, where in the Constitution does the Federal government have the authority to step in to invalidate that contract, call you before the Senate to trash your reputation, or punish you with the tax code if you don’t “donate” your money to the taxpayers who have decided you earned too much commission?

Do you know what I’d say to the Senate if they called ME before their sordid committees? I think you know me well enough to know I’d be in jail for Contempt of Congress. On what authority are they calling private citizens to appear?

If the retention bonus of $500 for an administrative assist is OK, why is $50,000 not OK, if that’s what was agreed? It isn’t OK, because Americans have adopted that horrible custom of Europeans of being envious of wealth.

I don’t see a person getting paid out on a contract as being rewarded for failure. I see it as confirmation that we are still a nation of laws, with a constitution that prohibits Congress from retroactively invalidating a contract. Without knowing the particulars of the people involved, I would congratulate them for being so respected and talented that they were able to negotiate such a favorable contract.

We have to be really, really careful not to set some sort of fixed number that defines “too much.” Obama likes to use $250,000 as some benchmark that separates us. I don’t think we should play into his hand.

These companies must be allowed to fail and pushed into bankruptcy court. That’s the ONLY way to limit the taxpayer’s exposure and reduce the amount owed to creditors (and the bonus recipients could get in that line). But Congress is not Bankruptcy court and it is NOT allowed to invalidate those contracts. It can only pass laws that change the contracts signed after new legislation is passed.

U.S. Constitution, Article I: Section 10: “No State shall … pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts.”

There shouldn’t have been bailouts. On that we agree. But we have them and the way to address this mess is not to condone scapegoating ALL the folks who worked in these industries.

Mar 25, 2009 - 10:49 pm 10. Pajamas Media » What AIG and the Titanic Have In Common:

[...] Read the entire piece here. [...]

Mar 26, 2009 - 1:52 am 11. dman:

No Heroes? The Medal Of Honor
Society, made up of all living
Medal of Honor awardees recently awarded their “ABOVE
AND BEYOND” medal to Cyril
Richard “Rick” Rescorla.
Rescorla was security chief for
Morgan Stanley who evacuated
over 2000 employees from the
WTC complex on 9/11. After
clearing the building Rescorla
with 2 of his fellow security
officers when back to check that no one was left behind.
All died when the South Tower
collapsed…

http://www.foxbusiness.com/story/citizen-honors-announces-honors–recipients/

Mar 26, 2009 - 2:54 am 12. elvis:

As a musician i find this a very fascinating story. However, i feel this is a metaphor for western culture. AIG is just a tiny part.

Mar 26, 2009 - 3:06 am 13. fear Obama:

AIG employees worked 12-14 hour days and were cheated out of 165 million in bonuses.

But Pres. Hopenchanges buddy George Soros has really suffered much more pain.

“I’m having a very good crisis,’ says George Soros as hedge fund managers make billions off recession”

http://www.dailymail.co.uk/news/worldnews/article-1164771/Im-having-good-crisis-says-hedge-fund-manager-1billion-world-plunged-recession.html

Mar 26, 2009 - 3:33 am 14. Old Soldier:

Corporations (and governments) become corrupt and arrogant when they get too big and too old. It is the natural business cycle. They hit icebergs and sink – always have.

Small, lean, innovative, entrepreneurial companies will always eventually beat the big company. Until the Statists took over! Now we spend our national treasure to prop up dead companies in dying industries. And we block the Entrepreneur with taxes and regulations. We are becoming a nation of failures.

Mar 26, 2009 - 3:51 am 15. Lord Whorfin:

Those responsible are being protected by the MSM, and may never face the music.Everyone else is fair game.

No More Bailouts!!

Mar 26, 2009 - 4:07 am 16. chris in Toronto:

Brava Mrs. du Toit (#9) Brava!

Mar 26, 2009 - 4:53 am 17. JShope:

I don’t think it is out of place to compare AIG to the Titanic. We should be careful to assign comparisons among the passengers, since we do not know their hearts.

There was an AIG executive, Jack DeSantis, who published his statement in the OpEd of the New York Times. Perhaps his pay is exorbitant, but it was a contract that should be honored. As one radio announcer noted yesterday, if he has a contract that offers him a bonus if the ratings go up, then that is contractually obligated. It is possible that earnings could go way down, for poor business decisions, while ratings go up. Is it proper to breach this contract and deny him what was promised?

The real problem with the stock market is the fact that most investors do not have a large enough stake in the market to control their investment. Banks and brokers have sold the public on Mutual Funds, which average out your risk. But, they also remove almost all control from the investor and hand it over to the owners and operators of the funds. Over the last 10 years, we have seen ever more complex and risky investments emerge, that have provided great short term gains and unbelievable losses.

EVERY investment comes with a risk, which is why nobody should invest money they cannot afford to lose. I feel bad for the victims of Madoff, the same way I feel about a small businessman who loses his business due to events beyond his control. But, we don’t revive failed businesses and we don’t repay non-insured investments. Why? Because we could never afford it and it breeds negligence, incompetence, and fraud.

The answer is not accountability to Congress. The answer is, as it always has been, in increased visibility and accountability to the people who have invested. We have the duty to protect our own investment; clearly nobody else will do that for us. The money machinists no longer feel a fiduciary duty to the investor, because the money appears to flow into the system without any effort. The answer is not ever larger corporations or more government. Our founders knew that the answer was more localized governance.

While it is true that the Titanic was a disaster, with many casualties, it is also a great success story. We didn’t bail out the company that oversold and understocked the vessel. Nor did we stop reaching for great achievements. Even larger ships have been built. Airplanes have disasters, but we don’t ground them after one crashes. No, we keep reaching for the stars even after two Space Shuttles have been destroyed in flight.

Mar 26, 2009 - 5:13 am 18. JFM:

Mr Whittle

The problem is not greed, when applied in the proper direction greed is a powerful force for economic good. The problem is when greed becomes disconnected from real economic performance.

Let’s me talk about Soviet Union. Contrarily to what most people believe, soviet workers had economic incentives. If you managed to produce two or three times more than the plan, not only were you paid two or three times more (after a time people learned that the extra money didn’t allow to buy the unavailable extra goods but this didn’t play at the beginning) but you were commended and awarded with medals, vacations on the Black Sea ans so on. Now tell me what is the simplest way to produce more? By cutting on the finishing and polishing. In a capitalist system poorly manufactured items don’t sell well and you have to lower prices to adjust them to the low value of what you are producing. Final result is the company loses money and the manager begins to investigate until he zeroes on the people who are not properly doing their job and fires them along with their supervisors. The latter know it and won’t let you cheat. In Soviet Union the plant manager had no interest into exposing the cheaters because he too was being paid by the volume of production. And that is why, in the high priority plants who manufactured drilling equipment for oil wells, over 50% of the production was unusable and went directly from factory to scrapyard. And the higher the incentives the stronger the temptation to cheat for workers and management, the higher the proportion of unusable crap they produced. That is because those incentives were disconnected from real performance, that is the one based on value like assessed by customers on a free market. It was like paying people who are loading a ship according to how much weight they put at starboard.

Now let’s return to the current financial crisis. Look at the managers of several bankrupted companies: they have retired rich enough to buy small countries despite having run their companies into the ground. However their behaviour was entirely logical when people don’t play with their own money and two years of solid growth bring you 10 each year while 1 year of flash and smoke profits brings you 100 so even if on the second year your company bankrupts you are far richer than the solid growth guy.

That is why the problem is deeper than one of greed and of tone deafness, it is one of finding a system of incentives and penalties, yes penalties, who better rewards long term healthy performance tahn hollow peaks in profits and/or share quotation.

Mar 26, 2009 - 5:22 am 19. WayneB:

I have seen Mr. DeSantis mentioned a couple of times here, but didn’t see a link to his letter, so I thought I would add it here:

http://radioviceonline.com/dear-aig-i-quit/

According to him, he was not part of the group who created the Credit Default Swap fiasco, he managed a division which averaged a profit of $100 Million a year, and he has turned down job offers because he had been contracted to receive a payout in March. Now he is going to quit, and probably leave a lot of work undone, because he is being punished after the fact and feels betrayed.

Also, apparently a lot of the people who WERE responsible for the huge losses have already jumped ship, and will NOT end up paying the piper for their transgressions.

Mar 26, 2009 - 5:42 am 20. FairestWitness:

Bill, AIG was deemed too big to fail by the Treasury and Congress. Why? I’ll tell you why: our government sabotaged it. Ask yourself what those credit default swaps were protecting and insuring. Bundled mortgages, traded and sold by lending entity after entity, ultimately landing at Freddie Mac or Fannie Mae.

Greedy AIG executives were enticed into the cesspool of toxic assets by the likes of Senator Christopher Dodd, Democrat from Connecticut and Chairman of Senate Banking Committee, the state of AIG’s home office. The very senator who placed the clause in the legislation allowing the payment of AIG bonuses.

Highly placed, powerful Democrats are deeply involved in AIG’s trouble and responsible for a good portion of it. It was a scam they concocted together, raking in obscene amounts of money. Now they’re trying to save AIG and cover their tracks simultaneously. Barney Frank is neck-deep in this debacle, too. So are several others.

This should be criminal and probably is. Will anyone go to prison? Democrats don’t go to prison for their malfeasance, they just get rich.

Mar 26, 2009 - 6:06 am 21. Locomotive Breath:

The incompetent officers ran the ship into the iceberg and have already taken to the lifeboats. As the ship goes down, the remaining competent officers and crew are frantically bailing trying to keep the ship afloat in the hopes of salvaging something of their lives including their paycheck. So when they’re being hauled up to the quarterdeck for a flogging, why is anyone surprised when they hop over the side too?

From today’s WSJ.
——-
AIG Fights a Fire at Its Paris Unit
The resignations of two of AIG’s top managers in Paris have put billions of dollars in trading contracts at risk of default.

Mar 26, 2009 - 6:39 am 22. Mike M.:

I think the big issue, which is not limited to AIG, is the increasing separation of the fate of the worker and investors versus the fate of the top executives.

Traditionally, when a company did badly, everybody suffered. The assembly line worker and the top executive both got pink slips, the investor lost his investment.

Today, this is no longer the case. When these large firms do badly, the workers still lose their jobs. The investors still lose their investments. But the top executives get massive bonuses, despite driving the company into the ground.

And we’re seeing it again. The politicans whose folly caused much of this mess are collecting more and more money, both in official pay and privileges and in soft graft…as well as refusing to pay taxes. The common citizen suffers, the political leadership profits.

Remember – when the Titanic sank, the band went down with it. As did Captain Smith. It is on Bruce Ismay, who survived, that all the opprobium fell.

And rightly so.

Mar 26, 2009 - 6:40 am 23. Ditto:

And while we all squabble about who at AIG is the good guy, and who is the bad, and whether C-level executive bonuses should be “allowed”… one salient point continues to go unheralded. Who is bestirring a “class war” – and, perhaps more importantly, why? Why would any leader who loves his country sign a bill into law that includes these bonuses and less than two weeks later, lead the public outcry against the very bonuses he approved?

Rather than helping people realize we all can work to attain lofty bonus levels ourselves, euphemistically speaking, or encourage our offspring to fare better than we did, The One instead raises the hue and cry against those who have made their fortunes. It is no longer about who received the TARP funds – it is now about families who make over the magical sum of $250K or businesses who wish to pay their employees an arbitrary amount of money another deems “exorbitant”.

Is that America I hear, groaning under the weight of such an unconstitutionally heavy hand?

People en masse respond to populist rage as a knee-jerk reaction. That doesn’t make it right, but it certainly is predictable. Anarchists count on such events, given the proper impetus from certain well-placed operatives.

Mar 26, 2009 - 7:00 am 24. Wearyman:

Bill:

WayneB and the other that have mentioned Mr. DeSantis are correct. Mr. DeSantis is indeed the modern equivalent of Mr. Hartley. In fact, Mr. DeSantis was ALSO being paid that same $1 salary that Lee Iacocca was paid. The bonus WAS his pay, as part of his contract.

Fortunately for Mr. DeSantis, he has the historical lesson of Mr. Hartley to follow. Even if he goes down with the ship, he knows that he will still be on the hook for the “cost of the uniform”. So he’s bailing while he can, as are many other right-minded people. The crooks are already floating away on their own personal lifeboats. This time around, the band won’t be giving them any sweet music to sail by.

Mar 26, 2009 - 7:07 am 25. ninjafetus:

Mrs. du Toit> It’s nice to read your comments here. Your former weblog was always refreshing in it’s clarity of thought, and I’ve missed it since your blogging retirement.

Regarding the actual post, I’m guessing there’s probably more heroes than we know in this financial situation; they’re probably just afraid to stick their heads out in this social climate.

Mar 26, 2009 - 7:23 am 26. tom h:

AIG is kept alive primarily to funnel money to all the people who bought default swaps from them. Those are the people getting the bailout. They bought insurance (or made bets, more appropriately, as cds’s are really just gambling contracts) from an under-captilized counter-party. They took a risk and are now being paid off by the US taxpayer, and their equity holders, employees and other investors are paying no price for it. We are socializing their risk and no one is focused on that. The biggest payoff is going to Goldman. Why the hell is the US taxpayer supposed to make AIG good on their bets so that Goldman can stay in business?

Mar 26, 2009 - 7:56 am 27. Marie Claude:

I remember the advertising on TV and papers in the late eighties, and also from the banks servants, individuals who had some spared money were adviced to play the game of “traders”, thus that their money would bring them more revenues soon, I know a lot who have tried, and they did see their bank account inflated, but they couldn’t spend their money for so, banks would charge them so much that it discouraged them to do it, but were allowed to carry on their gamblings, because they were “too small” to gain, only big players could/can save their earnings. At the very beginning of this monopoly game, the players had not the same chances, but they believed they had. So this was a croock enterprise that that an elite hold the strings and engeenred, the sames that are denounced today for their non moral responsibility of the crisis, also the sames that will not pay for it, they are part of the global design, global socialisation of the world. Would you think that they have a sense of honnor ? when was this word used ? in the knights times, in the samourai times, in the mousketeers times… but do you find a politician, or a businessman that still have the qualities of an honest man these days ? they have to play on the chess of the crookcs and liars if they don’t want to become loosers

Mar 26, 2009 - 8:28 am 28. MuscleDaddy:

With apologies to Bill & Mrs. duToit, I may not have been as clear in my original commentas I thought.

In this case, the “Captains” are the ones giving the orders – they are the ones reneging on the musicians lawful, binding contracts…

The “Captains” – since they have assumed the Helm over protest – are Congress.

No one can reasonably believe that everyone who was to receive their contracted bonuses was responsible for steering that ship into the iceberg.

And even if you do believe that, it doesn’t make Congress’ attempt at a “Do-Over” any more Legal under the United States Constitution…

…No matter what the Shrieking Mob might want.

We are not governed by a Democratic-Mob-Rule.

We Are Still A Republic.
http://www.e3gazette.com/2009/03/we-are-still-republic_24.html

– MuscleDaddy

Mar 26, 2009 - 8:32 am 29. Mrs. du Toit:

Mike M, I think you bring up a good point, but I think (using Bill’s examples) we need to pay attention to the realities.

There aren’t that many people of Lee Iacocca’s stature, tenure, and experience (we have illustrations of this in play today, because the Treasury can’t find qualified people to fill their open positions). Nor are there many people like Jack Welch (the former CEO of GE). When Jack Welch left GE, after he brought them back from the brink of bankruptcy to a shining example of a profitable company, GE had troubles.

When John Wooden (the UCLA basketball coach) had a decades long series of unprecedented successes, folks said it wasn’t him who was responsible for the team’s success. He got the better players, folks would say. Well, a year after he retired the record of success ended, with many of the same talented players still on the team. It WAS Wooden’s miraculous talent and coaching skill that made the difference.

There are maybe a hundred people (if we’re lucky) in the U.S. who are as good as they are, and that excellence, drive, talent, and experience is worth A LOT. How much is something we can argue about, but it isn’t our place to decide it. It is for the investors, shareholders, and Boards to decide. The taxpayer doesn’t get the micromanage this. Those who have a stake and the intimate knowledge of their worth/performance get to do it.

We get this and don’t have a problem with it when we talk about someone like Michael Jordan. We recognize that he was one in a billion, a shining star and talent that comes along every 100 years (or a 1,000 in his case). We marvel at their talents, gifts and drive… just as we should marvel at the Band who played on. They’re rare and exceptional and are examples for all of us… but we’re not all them. We’re not all similarly gifted or driven to that degree of excellence.

Suggesting that the average worker or share holder is somehow equivalent or equal to the talents and drive of Jack Welch is just wrong, on so many levels. When he was at the helm GE flourished. When he left, and all the other workers and shareholders remained the same, the company began to decline. One man made that difference.

We don’t like to think that way because we’re stuck on “All men are created equal.” Well, they’re not. Some people are worth more than others.

I wouldn’t attempt to put a dollar value on Jack Welch’s worth, and we tend, with our Puritan roots, to think that there can be too much reward, but we need to distance ourselves from that sort of talk and thinking that there is “too much” or value equally the contributions of the line worker. That’s the foundation layer of socialism, of feelings of envy. It is one of the deadly sins for a reason, because it is so destructive.

It a classic illustration of supply and demand. Where there are shortages, the prices rise, and the few dozen people who rise to Iacocca and Welsh’s level should be applauded and rewarded. They truly are a rare breed and their success flows to all who work for them, with them, and those who ride their coattails in their investments portfolios.

[Waves at ninjafetus... nice to see you, too!]

Mar 26, 2009 - 10:24 am 30. airfoil:

Somewhere between the bottom of the barrel and one rotten apple is a metaphor for “Don’t Risk money you can’t afford to lose”. So an Insurance Co. can’t pay its insureds? And the end of Western Civilization is around the corner? Too Big To Fail?? My Ass. No consequences, no change. Tired I am of two “standards”. Bulless.

Mar 26, 2009 - 10:30 am 31. Marianne:

may-be the anti-spam system can also figure some of us as rebels

cuz it left me on the waiting list

here is again

I remember the advertising on TV and papers in the late eighties, and also from the banks servants, individuals who had some spared money were adviced to play the game of “traders”, thus that their money would bring them more revenues soon, I know a lot who have tried, and they did see their bank account inflated, but they couldn’t spend their money for so, banks would charge them so much that it discouraged them to do it, but were allowed to carry on their gamblings, because they were “too small” to gain, only big players could/can save their earnings. At the very beginning of this monopoly game, the players had not the same chances, but they believed they had. So this was a croock enterprise that that an elite hold the strings and engeenred, the sames that are denounced today for their non moral responsibility of the crisis, also the sames that will not pay for it, they are part of the global design, global socialisation of the world. (ie Alexandre Kojeve) Would you think that these persons have a sense of honnor ?
when was this word used ? in the knights times, in the samourai times, in the mousketeers times… but do you find a politician, or a businessman that still have the qualities of an honest man these days ? they have to play on the chess of the crookcs and liars if they don’t want to become loosers

Mar 26, 2009 - 10:50 am 32. acj:

I think that this article earned a “Wow” from me.
And while we are talking about the Titanic, I fear the comparison of our economy is the a large ship that just hit the iceburg. Our country’s economy has been sailing along at a high rate of speed with confidence and no heed to warning. And our country, like the Titanic is too large to avoid disaster. And like the Titanic some people scambled with making sacrifices for others and some bonus’ing a life boat when they see it might be their last voyage.
It is after the disaster, that blame, shame, and regret linger.

Mar 26, 2009 - 11:55 am 33. Moogie:

Thank you Fairest Witness for finally saying what MUST be said: Smoke and mirrors! While everyone quabbles about who should or shouldn’t get what and who knew what and what is what, there remains one big fat question: why are the perpetrators of this fraud not being charged with a crime? This is a criminal matter – theft is theft.

Fairest Witness is right: our own government sabotaged US. Then they provided the bailout using OUR tax dollars. Then they provided a loophole for the executives to receive bonuses using OUR tax dollars. Then they cried “foul” and enacte a superfluous tax law in an attempt to retreive OUR money.

Nevermind, for just a moment, the new 90% tax, or that one nice guy who is giving his bonus to charity; nevermind the outcry from those “aghast” politicians at the unfairness of the bonuses; nevermind the knife-in-the-back 11th hour clause that was slipped into the budget guaranteeing these bonuses were exempt; and nevermind who those executives were.

I want to know who, in our government is responsible for this event, from its very beginning. I want THAT information blasted all over and I want THOSE people to be prosectued. Why hasn’t this happened? And why are the Republicans being so quiet and not insisting on this happening?

The Tea Party movement is based on a simple saying from the 1700s: “No taxation without representation.” Well, folks, we no longer have any representation.

Mar 26, 2009 - 1:34 pm 34. Bump bump bum go the tires on the bus. - VolNation:

[...] As the band plays on! (Tip, you just gotta read the second page of the link.) __________________ Veritas Vos Liberabit [...]

Mar 26, 2009 - 2:24 pm 35. BattleofthePyramids:

Mr. Whittle:

There is a larger issue here that is being overlooked. Whatever AIG’s personnel did or did not do, the fact is Congress authorized those bonuses. Specifically authorized them in a spending bill they themselve willingly passed and that President Obama willngly signed into law.

Then that same Congress turned around and is now trying to confiscate those bonuses via specialized targeted taxes. If this passes constitutional muster, then ALL privat property will be at risk. After all, if Congress can tartet AIG bonuses today, what is to stop them from targeting your 401K or for that matter your savings account tomorrow?

I don’t know enough about AIG to be able to say if their bonuses were properly earned or not. I do know that I don’t want Congress to be able to confiscate money I earned on a whim.

Mar 26, 2009 - 2:34 pm 36. George Orwell:

Hear, hear, Mrs. DuToit. I’m sad to see usually reliable people play into the trap of envy. I am still waiting for the outrage over the tens of millions earned by Franklin Raines as he ran FNMA into the ground. Google and watch Peter Wallison’s fantastic address to Reason Foundation’s fortieth anniversary, on how we ended up in this economic boondoggle. This isn’t a product of greed producing failure. It’s a product of government producing greed. It’s a product of government policy preventing certain classes of economic activity from failing, and nothing will attract the greedy like a promise of immunity from the consequences of their own actions.

Mar 26, 2009 - 3:41 pm 37. Trevor:

What AIG, Titanic, and the Federal Debt all have in common… In about 10 years the debt will be $20 trillion. Obama is behaving like an AIG Financial Products employee. Load up on trillions in company obligations, party like hell for 8 years, then make sure to be retired when the whole thing blows up. Just imagine how unworkable it will be to pay $1 trillion a year of interest on that $20 trillion. The country will survive, but make sure you have enough stuff to be self-sustaining then.

Mar 26, 2009 - 3:53 pm 38. goy:

@23 Ditto has it right, IMHO. Virtually everything said or printed about this issue these past weeks that did NOT explicitly focus on the tens of billion$ funneled from our Treasury to foreign banks, through AIG, has been a distraction. And we’d better start paying better attention.

Congress’ Financial Services gang (read: Barney Frank & Co.) has gone to great lengths for years to promote and protect taxpayer-backed investments in inherently risky loans – securities Franklin Raines actually had the temerity to refer to as, quote, “riskless”.

Clinton legislated an increase in the quota for these high-risk securities just before leaving office, Obama pursued legal action forcing banks to engage in the practice, and when improper accounting practices were discovered at FM & FM in 2003, the Democrat Congress resisted every attempt by Republicans to impose regulations that might have stemmed their raging flow the tiniest bit. That, even when Snow pointed up the astounding degree to which that market had grown (read: been forced to grow) and the increasing danger of major economic damage if a default ever occurred. Had he only known.

The response? It was: “well, the GSEs aren’t in crisis today, so kindly just STFU, m’kay?”

[One wonders how differently that situation might have turned out if not for the need to remove Saddam, or if the entrenched media and the Anti-Bush Party hadn't responded to that action with a relentless barrage of lies, misdirection, leaked national security secrets and hysterical demonization of every aspect of President Bush's administration. But that's another story.]

In pandering to the demographic from which they draw most of their political support, Democrats signaled… hell, they virtually guaranteed… that these securities would be supported forever and ever, amen, and that they would never be allowed to default. Ever. “Affordable housing” would be provided, though the heavens fall.

So let’s bang that against another all-too-common myth. No trader on Wall Street worth a dime – let alone a seven-figure salary – thought the housing market would grow forever. And even Raines never really believed mortgage-backed securities were inherently “riskless”. What they all understood, and the dynamic they were obviously working against, was the guarantee expressed over and over again by the Financial Services gang obsessed with “affordable housing”. This guarantee essentially stated that the securities managed by the GSEs would not be allowed to default. Period. The U.S. Treasury would be there to back them up, no matter what.

So here’s a question: given the all-but-handwritten guarantee that those securities were ’safe’ even if the housing market started to decline, what enterprising trader would not have used those instruments as a basis upon which to build the astounding level of profits produced by CDSes and other derivatives?

Answer: none worth hiring.

Well as it happened, the heavens did in fact fall. Since that time – especially recently – the culprits responsible for the core of this mess have gone into paroxysms of finger-pointing and outrage, all aimed at directing attention away from their own actions – and I’m obviously not referring to AIG traders who ran their business based on the direction of the hot air blowing out of D.C.

Andrew Cuomo – who, in another case of almost absolute power with no experience to guide it, gave birth to the current crisis as Clinton’s HUD Sec’y back when – has threatened to reveal the names of AIG bonus recipients. Barney Frank – who’s purchased more votes with the “affordable housing” scam, and who is now personally responsible for more “affordable foreclosures” than any other politician – has not only stooped to the same level of depravity, but has further defiled his office by simultaneously carrying on a pathetic attack against Antonin Scalia regarding a SCOTUS dissent that Frank has apparently never read and certainly doesn’t understand. Scalia is a “homophobe“, don’t you know. Maxine Waters pointed her bonus! finger at both Obama and Dodd in an effort to keep the media talking about their activities, rather than looking at her past record of protecting the risky loans which fried our economy. She had the unbelievable audacity to claim that the President had some explaining to do. And Obama’s pathetic ruse aimed at fomenting class warfare and stirring up rage against AIG employees is already common knowledge.

Anyone NOT seeing the pattern here? Someone wrote somewhere recently: It’s a fucking travesty. I completely agree.

It’s fine to look for heroes and all, and I think people like DeSantis are the closest we’re going to find in this situation. But AIG did not hit an iceberg. It was the victim of a crew who ran it aground. Now they’re trying to cover their tracks. And if we had any real leadership in the Republican Party, the public would be hearing about it day and night until Tax Day.

Mar 26, 2009 - 4:10 pm 39. bobby b:

The people who got the bonuses were not the ones who made venal, or even stupid, decisions that got AIG into its mess.

They’re the ones, though, who are absolutely necessary – absolutely – to take the remaining huge pile of impaired (?! – unbacked?) securities and continue juggling them in the air while they skillfully sell certain ones at their appropriate time and certain other ones at their appropriate time and carve out parts of certain other ones and make new combinations in ways that preserve the value while still getting out of them as they can . . . .

We now own 80% of this company. If these very skilled, very stress-absorbant technicians walk away from their juggling, the pile will simply fall to the floor, which is an overly simple yet fitting way to say that the rather huge remaining pile of securities could be worth $X!, or they could also be worth $x, or maybe even – ($x) – the difference will depend on how well they juggle them and sell them. They signed on to do this job because someone promised them these bonuses if they would do so. They’re not the ones people should be mad at.

Here’s a clue: Obama on one day just tears into this completely unexpected and outrageous development, and forgets to mention that he’d known about it for months, and approved it. The man is a pathological liar, willing to say anything that makes the one specific moment he’s in into a better moment for him.

Mar 26, 2009 - 4:39 pm 40. Trevor:

Hello?! Is that comment really so offensive that it takes an hour for moderation to approve it? I actually spent much time writing that short comment. pajamasmedia.com needs to sit down and think about what it is trying to do. I don’t want to come here any more.

Mar 26, 2009 - 4:50 pm 41. Trevor:

It is 6:14. Please accept my 3:53 comment or reject it. I apologize if I have insulted you in some way. Radio-silence seems kind of obnoxious.

Mar 26, 2009 - 5:14 pm 42. Trevor:

I retract all comments I have made on any blog posts here. Please delete all comments I have made, anywhere, here. Thanks. I apologize for wasting your time.

Mar 26, 2009 - 5:22 pm 43. Bill Whittle:

( A note regarding comment moderation: Since moving to the new site, I am being asked to moderate certain commments. I did not have to do this before. I do not know what the criteria are for having a comment held for moderation. What I DO know is that I am not able to sit by my computer 24 hours a day to moderate incoming comments. Emailing me at home to moderate a comment, or adding additional comments about meoderating comments, will not make this go any faster. I do not determine what is moderated, but I DO end up killing 50 spams a day — minimum — and the simplest way for me to deal with this is to simply turn the comments off. )

Mar 26, 2009 - 7:03 pm 44. JonathanL:

Truly inspirational.

The most incredible part of the AIG saga, as pointed out today in the WSJ: Five of the ten senior executives on the AIG Credit Committee that “stupidvised” the credit default swap business are still in their positions even after almost taking down the worldwide financial markets…

Mar 27, 2009 - 8:50 am 45. donttreadonme:

here be heroes:
the nine lonely Senators who in the fall of 1999 voted “nay” to the revocation of Glass-Steagall. The measure to bring down the walls enjoyed vast bipartisan support, but the main dissentors WERE Democrats and one solitary Repub (Shelby from AL). Before libs get all self-righteous, Clinton supported the measure and signed it into law eagerly. These nine warned of the perils that could come from dismantling G-S. Oh well.

Mar 27, 2009 - 9:44 am 46. jbrookins:

It’s not relevant whether those at AIG that recieved bonus were good or evil. The fact is we the people shouldn’t be paying for them even if they are saints.

These guys all make more money than I’ve ever seen outside of maybe a CIA sports bag in the middle of nowhere.

Mar 27, 2009 - 4:22 pm 47. Jimmy J.:

AIG is a glaring example of a widespread problem – corporate executive compensation.

When corporations first began, in order to get investors to put up money, the idea was that there would be a Board of Directors (BODs)that would keep an eye on the managers of the corporation. Their job was to look out for the rights of shareholders (the real owners). This seemed to work pretty well for many years. BODs took their responsibilities seriously and reined in executives who were self-serving. However, in the 60s as businesses grew and more corporations were started, a new trend began – the practice of putting a lot of insiders and cronies on the BODs so that the company executives have more latitude and control. It didn’t take long before corporate executives began raising their salaries and granting themselves more luxurious perks and the BODs went along. Things have gotten steadily worse over the years.

Many people in business now admit that the BODs as a watchdog for the shareholders has pretty much failed. The unfortunate thing is no one has figured out a way to reform things. My idea has been to establish a new job description – professional board member. These men would be chosen from the ranks of businessmen who are in their late forties. They would be given a training course in business ethics and compensation models. When ready to serve on boards they could serve on up to seven different boards. It would be a full time job, with great prestige attached to it, as well as stock options that could offer possible wealth when their job was done correctly. To be a board member and betray their responsibility to the shareholders would the most egregious and shameful thing they could do and would result in immediate dismissal and public shaming. I know it would be hard to implement, bvut has anyone got a better idea?

Mar 27, 2009 - 7:53 pm 48. Nahanni:

Moogie,

Smoke and mirrors! While everyone quabbles about who should or shouldn’t get what and who knew what and what is what, there remains one big fat question: why are the perpetrators of this fraud not being charged with a crime? This is a criminal matter – theft is theft.

I will tell you why.

Like Deep Throat said; “Follow the Money”. AIG is just the tip of the iceberg, Freddie and Fannie Mae is the iceberg. Here is some info on Freddie and Fannie…

http://www.discoverthenetworks.org/funderprofile.asp?fndid=5197&category=78
http://www.discoverthenetworks.org/funderprofile.asp?fndid=5197&category=78

In the end it isn’t the crime that gets them, it is the cover up. Richard Nixon learned that and soon the people responsible for this mess will too. Unfortunately for them they will not be allowed to just “resign and retire”.

When the smoke clears, the mirros are broken and we have waded through enough MSM shite to find the pony we will learn that the thieves are none other then the same Corruptocrats who are shrieking the loudest while doing their best to cover their tracks and the owners of the Corruptocrat party. The clock is ticking. They can not keep this covered up for much longer which also goes a long way in explaining the 0bamamessiah and the Corruptocrat “royalty” panicked haste covered by a thin veneer of arrogance and feigned outrage in trying to ram through as much of their America destroying Marxist agenda as they possibly can because they know that this is their last chance to do so. They have failed and they know it and are now frantically trying to salvage the situation. They thought that the American people are stupid sheep like their brain dead supporters and we would all lay down before the 0bamamessiah and lap up the stinking swill that their MSM propaganda wing and their celebratard allies feed us. They are learning the hard way that they were wrong and you can start to smell the fear emanating from them. They are beginning to feel the rage of the American people and they know that they all stand a very good chance of being guests of honor at a human pinata party if they are lucky.

Mar 28, 2009 - 12:43 am 49. Nahanni:

I forgot this link on my post.

http://pfds.opensecrets.org/092408.html

Mar 28, 2009 - 1:20 am 50. geoffgo:

Hi Bill,

Super pleased to see you here at PJM. We’ve missed your message. We desparately need your voice for as long as you’re allowed it.

For me the analogy of US vs. Whitestar’s folly – HMS Titanic – is misplaced, and fails to convey some lessons learned. “Unsinkable” is english for HUBRIS. Bureaucratic nightmare to be sure; but benign incompetence. Circa 1912, there were no complex, gov’t-backed insurance “derivatives” betting she’d sink.

Perhaps more relevant, the sister ship Brittania, of the same design + more lifeboats, was launched a few years later, and failed to complete her maiden voyage ALSO. Sailing into a minefield in the Med, with enemy subs all round, as she was ordered to do…by the folks ashore. Brittannia may be the more informative example, as she was sunk due to “hostilities” between those folks ashore. Competitors turned enemies.

In Titanic’s case, the iceberg wasn’t malevolent or steered to intercept. It was simply being a threat to the unwary. In Brittannia’s case, the threats were strategically-placed, some were steered and propelled, and all were explosive…designed to end any voyage. No matter the cost in human lives, as ordered by those now more wary folks ashore.

And Brittania’s crew signed on, volunteered, everyone knowing danger be out there; ie, the competition will be firing live rounds. Colisions with icebergs being unthinkable in the Dardinelles. Heroes all.

In our case – USS Travesty – the folks ashore have half the population busily refininishing a thousandfold increase in deck chairs, converting crewspace to steerage, removing the ALL lifeboats and defensive armament, and painting everything a drab, flat grey. No orchestra this time.

Note however, that the new, upgraded, non-polluting engines will drive US at triple speed. And the course is being fixed by GPS, to automatically steer toward any and every minefield imaginable. Passage on this last voyage is compulsory. No one is insured, except those folks remaining ashore.

Mar 28, 2009 - 6:01 am 51. Cyrus:

The problem of the million dollar AIG bonuses is merely a secondary problem–the primary problem is that the government is taxing money from the people and giving it to banks so that they can loan it back to the people with interest!!

Mar 28, 2009 - 7:56 am 52. airfoil:

With all respect, every time I click on the five dollar tariff to make my contribution, I have to watch a goofy guy in a Drudge look alike contest, and a comely Israeli who is uncomfortable speaking into a camera. I’d like to pay; a month of Whittle’s writing is worth more than the pittance charged for the whole enchilada. Maybe I’ll just contribute a similar amount to the Ted Kennedy Memorial Book Fund.

Mar 28, 2009 - 8:35 am 53. Kingston53:

Its really about the culture. Culture is the glue that keeps a society together. The kind of sacrifice seen on the deck of the Titanic required a sense of belonging and loyalty to a group. A group identified with common beliefs and values. This culture was molded by a belief in God. I would suggest that more of our Barrons of Industry have read “Looking Out For Number 1″ than the Bible.

Mar 28, 2009 - 12:28 pm 54. ObiJohnKenobe:

I agree with Mrs. du Toit.

The folks at the center of the bonus kerfluffle are not those responsible for breaking AIG, they’re the clean-up crew. From what I’ve read, many of these folks were offered retention bonuses if they foreswore opportunities at other companies for a year to stay and fix the mess. The people in charge of the division in question saved almost $2 trillion for AIG, and many of them were getting paid very low salaries; their payoff for good work was the retention bonus.

If I had been Mr. DeSantis, I would have kept my bonus that I rightly deserved. I would have used the money to fight any attempt to collect the money in taxes, and to give to the opponents of the rabble rousers during the next election cycle.

As others have pointed out, this problem of the bonuses existed because the government got involved in something it should have stayed out of. No company is too big to fail. At the rate our government is spending money, we’re going to find out if our government is too big to fail… and the answer isn’t “Yes.”

Mar 28, 2009 - 12:39 pm 55. jms:

To me the men who stayed in the boiler room keeping the electricity generators going as the ship sank are the heroes. They are the ones who kept the boat afloat as long as possible, and because they were keeping the radio room powered, they were arguably the individuals who did the most to save the ship. If things had gone differently, and a ship had responded to the SOS, they would have been the heroes.

“Keeping everyone calm” is what the Congress and President are doing. They are offering distractions like musicians on the deck of a sinking ship — whipping up outrage over $165 million in scheduled lump sum salary payments, for a staff that has been working 12-14 hour days a for a full year to reduce AIG’s potential losses from $2.6 trillion to $1.6 trillion, many of which would have continued doing so except that they have essentially been driven away from their work — a $1.6 trillion sinking ship that they could stop from sinking, if they were not afraid for their families and themselves, and if they were not robbed by the government.

I think that the AIGFP employees are a lot closer to the men in the Titanic’s boiler room than they are to the musicians on the deck. It’s just that no one noticed them because they were working in the bowels of the sinking ship, not putting on a show.

Mar 28, 2009 - 12:39 pm 56. jms:

A point I forgot is that the men in the boiler room were keeping the generators going because they were powering the bailing pumps, trying to pump the water out of the ship faster than it was flowing in, a financial analogy of what the current AIGFP employees are doing successfully.

Mar 28, 2009 - 12:43 pm 57. gus3:

To clarify the scale a bit:

Comparing the AIG bonuses to the bailouts, is like a wine spritzer vs. a bottle of Jim Beam.

Mar 28, 2009 - 1:33 pm 58. myth buster:

MuscleDaddy,
The Captain of the Titanic went down with the ship, as did the ship’s designer. It was the CEO of White Star Line that boarded a lifeboat in ill repute.

Mar 28, 2009 - 1:42 pm 59. Robohobo:

Nope, you do not get the vilify AIG employees without some good research. He is the link to the letter from Jake DeSantis:

http://www.nytimes.com/2009/03/25/opinion/25desantis.html

According to him, he was working to deconvolve the mess at AIG for $1/year and the retention bonus approved by the Congresscritters, 0bummer and the rest via law and contract.

What we have is Kabuki theater on the part of the Congresscritters who are direct actors in this to defraud the workers at AIG of their contractually owed monies. That the uPOTUS would also take part in this speaks volumes.

At what level will the government set confiscatory taxes? And are those taxes to be retroactive? Where is the US Constitution in all of this? Or have they all decided that 0bummer is right and the Constitution is a “living” document now?

Go where your their logic is taking you. It is a truly frightening place and looks much like the old Lubyanka prison.

Mar 28, 2009 - 2:07 pm 60. toad:

Adam Smith pointed out that when a “corporation” became successful because it outdid its competition, more often than not, it would go to the government for rules which would protect it from competition. Soon there would be hands in everybody’s pockets. Even as Barney Frank goes “j’acuse!” deals are being made. Johna Golberg points out that the big boys in the financial industry have long favored Democrats as far as campaign contributions go and even now as AIG managers who had nothing or little to do with the fiasco and are being thrown under the buss or are leaving for jobs in Germany, deals over regulations and campaign money are being made between the vilified and the vilifiers.

My favorite line: “When I put my American Express on my Visa Card I’m called an idiot. When the government does it, it is called wise.

Mar 28, 2009 - 2:35 pm 61. Mary Jo:

Maybe Ismay is drowning in a frozen Hell?

Mar 28, 2009 - 2:56 pm 62. David Bracewell:

Bill says: “I am ALL ABOUT having the freedom to take a risk for a high reward.”

But this is not the model the US has. You are talking of a risk model that is a century old with capitalists who risked +their own money+.

It’s really an inappropriate model to shoehorn +managers+ of capital or even industrial goods. They risk what? Their careers at worst, careers that have already made them wealthy? Mostly they risk other peoples’ money.

And let’s be clear, if anything proves the theory or risk reward obselete in a 21st century economy, this crisis is it. Reward is based on your abiltiy to get close to the centres of capital, not on a risk model. That’s the reality.

NY firemen take greater risks very day than NY financiers. Financiers, who are not paid on risk, would be living in the tenements and firemen would be living in large appartments if such a model was serious.

Technical skill and so on of course play a part, but not as big a part as the simple ability to get close to capital through corporate affiliation.

And should this be rewarded well? Free market capitalism has 2 justifications – it claims to be able to allocate resources better than any other system. And it claims to be able to set a price better.

It failed massively – again – in both tasks. And why? Because if you structure a society for capital, if you destroy government as a potent force, then capital is such a powerful and hubris-engendering force that it sweeps away any checks and balances and reorganises society in a way that destroys the social fabric and ultimately itself (Karl Polanyi gives a really sound account of captialism in these terms).

There can be entrepreneurial societies that are not capitalist, but they are generally social democracies which regulate because they are not smitten by the power of capital.

Entrepreneurialism rewards risk. Free market capitalism rewards self-prepetuating centres of power the managers of which risk nothing.

Mar 28, 2009 - 3:15 pm 63. SkyeChild:

“We keep hearing about the loss of wealth, something close to 50% of retirement savings has disappeared. Well, where did that savings come from that is now halved? In many cases, that money doubled, doubled, and doubled again because small time investors were riding the wave of the bubbles. That wealth was manufactured in this same market that has crashed. It has now gone down, something that far too many people did not think could happen.”

Actually, I resent this more than I have words for. The portfolio my husband amassed was built on many, many hours of hard work and years of sacrificing, scrimping, and saving, so that we wouldn’t be left in our old age scrounging for scraps and/or handouts. We raised two children for many years on a military salary, and then he landed a well-paying job.

Tell me why *we* should get the brunt of your rant, Mrs. DuToit. I got half of his portfolio when I divorced. Are you thrilled that the money is dwindling in front of my eyes? That is all I have to live on for the rest of my life, Mrs. D. Am I one of those greedy capitalists who should be punished because we made wise use of our money?

Maybe I misunderstood you. I certainly hope so.

Mar 28, 2009 - 5:33 pm 64. ObiJohnKenobe:

SkyeChild, Mrs. du Toit is certainly capable of defending herself, so this reply isn’t meant to do that.

However, if you want to be justifiably angry at someone for your investments’ loss of value, how about getting angry at the group of folks who prevented any oversight at Fannie Mae and Freddie Mac, yet profited heavily at both? How about getting angry at the group of folks who decried deficits during last 8 years, but who have proposed doubling the national debt over the next 4 years? How about getting angry at the group of folks who roused the mob over $150 million in retention bonuses at AIG, yet told us that $8 billion in wasteful earmarks was no big deal? How about getting angry at the group of folks who regulated the banking industry and forced banks to loan money to people who clearly couldn’t pay the loan back?

That group of folks are the people who are responsible for the mess our economy is in now. The same group of folks who just gave themselves a payraise, increased hiring at the ‘firm’ they control, yet have run up a massive debt and promise to more than double that debt in the near future. If that group of folks was running a company they’d be in jail for fraud.

That group of folks is the Democrats. And, if you voted Democrat in the last election cycle, then the person you need to be angry with is yourself.

Mar 28, 2009 - 9:06 pm 65. Robohobo:

ObiJohn – “That group of folks” is not ‘just’ the Democrats. Fer heavens sake, all the loathsome creatures of DC get some of the blame. Time to do away with the professional political class and get back to citizen government.

Funny though, isn’t it, how us redneck rubes in flyover country got it right this time? You know, us bitter clingers who tried and tried to tell the rest of the country that The Won was poison and we got called stupid for it.

We called:
Gov’t growth = Stimzilla
That he isn’t centrist, he is Leftist Commie to the core.
The 0Bamajugend. I mean GIVE.
2A issues are spot on, just wait, they trying to build the case now – see Mexico propaganda.
Etc.

Mar 28, 2009 - 9:34 pm 66. somercet:

Mr Whittle:

A moving story, thank you. I am neither for nor against the AIG bonuses, as I knew that many AIG employees would be paid from bailout money at a rate far higher than the average American’s. If we bailed out AIG, then we paid those people.

I suppose some parts of AIG were profitable. However, I have heard that a man named Bensinger was acting CFO until Sept ‘08, and that AIG had not filled the CFO spot for months (18?) prior. Perhaps their problems were not so cleverly hidden as we may have believed.

Mar 29, 2009 - 12:01 am 67. flicka47:

John Cornyn sent me a “personal” email the other day. You know the kind asking for contributions…
His sctick was you guessed it…the AIG bonuses!
Somehow the man was too stupid to see the class warfare that the progs are pushing,and thought Republicans should jump on this bandwagon also.I was quick to abused him of the sleight of hand that these folks were trying to pull off to hide their own duplicity in the financial collapse,and to inform him that it would be much better if he and the rest of gov’t took care of the d*#m beam in their own eye first.
This is,as many others have pointed out,all smoke and mirrors to hide what many in Congress and gov’t have done that was the cause,and in many cases their own personal gain from it.And not only are they hiding their part,they are using it to push “solutions” that are seriously harmful for this country.
We need to stop these folks.

Mar 29, 2009 - 12:40 am 68. ajacksonian:

The really fun thing about AIG isn’t AIG, but the guy who was the Head of the Federal Reserve of NY: Timothy Geithner from 17 NOV 2003 to 23 JAN 2009.

For all who want more ‘regulation’, this was the guy in charge of that from the NY branch, which is quite a hefty position to be in. Where, exactly, was Geithner during the run up of AIG, CitiCorp, Lehman Bros. and the rest of them? They were following the regulations that mandated loans be put out to those who were ‘non-traditional customers’ who had little means to pay back such loans with zero down, no interest payments for years, and don’t mind the two and three year down the road ballooning effect once real interest rates and interest get put in. Those were getting bundled and sold as derivatives, and Mr. Geithner had a front row seat to what was going on having his finger on the money supply and just how solvent all these firms were.

We mistake liquidity for daily work with long term solvency, and it was the latter he didn’t bother us with.

If you want the Titanic, this was the helmsman who plotted the course on the chart, told the Captain the icebergs only rarely come this far south, and then ignored any reports of thicker than usual iceberg packs when he heard of them. Part of the duty of the chartmaster and helm are to make sure the Captain knows where he is going and what problems lie ahead. All blame goes to the Captain, of course, but in this instance the man who should have been on watch, should have warned about what was going on, and should have *resigned* when no one would listen… well he was there to engineer AIG’s bailout back in SEP 2008.

And bonuses were talked about then.

Yet the NY Federal Reserve seems to have not passed that information forward.

Funny, that.

Nor did it do so in NOV 2008.

Took some direct questioning in DEC 2008 in Congress to get that out from… AIG. Not the Federal Reserve of NY.

The interesting thing about the Titanic is that modern structural engineers point out that if the ship had just taken standard precautions and slowed down and didn’t try to avoid the iceberg, but just stop the engines and hit it, the front part of the ship with some baggage and supplies would have been crumpled… and the ship could then back off and more slowly continue on its voyage as that is what those sections were made to do.

Geithner didn’t have to be Mr. Super-Genius, just say: ‘Hey, this isn’t a sustainable situation, can we cut back a bit and slow it down to examine it?’ If he said that, no one heard him or would not listen and he thought it really was a dangerous situation, say in 2005, 2006 or 2007, and then QUIT to tell people about it, then I would have a bit more respect for him. As it is he couldn’t even use the tools he had… and folks want to give out more?

At this point I stand with the Bank Veto of 1832, and now question how the Federal Reserve has any right to do what it does. Minting and currency is one thing. Beyond upholding accounting practices, supporting loans on property is beyond the scope of those powers given to government as it can be left holding the property when it requires to States to allow that for each and every individual piece of property. This was a problem seen in 1832 and it is the exact, same problem we have today. We fixed it once and can do so again… but that requires stepping away from the regulation pen and upholding basic contracts and accounting and letting everyone else figure it out for themselves. Because only the Federal Reserve can turn a downturn and make into something far worse… as it did in 1928 and now in 2008.

Perhaps we should look at the wisdom of that previous Captain of the Ship of State… and examine just *why* such things grafted onto government are the source of graft and perversion of the public good to private gains and then public ill. It isn’t like we haven’t been here before, after all. We just had sommeone who didn’t like that set-up and wanted the common working man not to be beholden to the banks… or government.

Mar 29, 2009 - 2:43 am 69. Oyster:

Bill, I can’t think of a time when I’ve disagreed with you – until now.

“…the fact remains that the primary source of outrage is that it looks like people are being rewarded for failure. “

“When failure is rewarded, you have… well… Hollywood.”

You’re conflating the two; it “looks like” people are being rewarded for failure, then you go on to imply that anyone who got a bonus was indeed being rewarded for failure.

You simply sound like you’ve fallen prey to the populist outrage against individuals working for a company that has gained notoriety due mostly to the actions of many who have long since left the company. Whether or not that’s your intention is lost in the sweeping generalizations you make.

In the meantime I’ve not heard a peep out of the top recipients of AIG largess directed toward their campaigns giving the slightest indication that they should return them. As I’ve heard time and again in regard to the global warming alarmists as they fly around the globe in their private jets: I’ll believe it’s a crisis when they start ACTING like it’s a crisis.

Mar 29, 2009 - 5:07 am 70. David Bracewell:

ajacksonian: “Where, exactly, was Geithner during the run up of AIG, CitiCorp, Lehman Bros. and the rest of them? They were following the regulations that mandated loans be put out to those who were ‘non-traditional customers’ who had little means to pay back such loans with zero down, no interest payments for years, and don’t mind the two and three year down the road ballooning effect once real interest rates and interest get put in.”

This is assertion based on nothing, in fact based on ignoring the evidence that we have .

You don’t quantify this by providing figures and you don’t explain how private companies were ‘mandated’ to make these loans to a ruinous extent .

Next you’d have to ignore the testimony of one of your examples, Lehman Brothers CEO Richard Fuld before the House Committee on Oversight and Government Reform

MICA: And one of your big com — well, one of the big packagers, or the competitor, so to speak, was Fannie Mae, which was deep into this. And you were — you were dealing in some of the paper, I think, for secondary markets and other securitized mortgage paper, to basically package it and make money off it. Is that right?

FULD: Yes, sir.

MICA: What was Lehman Brothers’ exposure to the debt of Fannie Mae and Freddie Mac, and what role did their collapse play in precipitating some of your financial troubles?

FULD: Our –

MICA: It didn’t matter or you –

FULD: Our exposure to both Fannie Mae and Freddie Mac was de minimis, sir.

Second. In a securities and exchange commission filing +before+ the current collapse in 2006 Fannie Mae reported:

“We did not participate in large amounts of these non-traditional mortgages in 2004 and 2005.” … These trends and our decision not to participate in large amounts of these non-traditional mortgages contributed to a significant loss in our share of new single-family mortgage-related securities issuances to private-label issuers during this period.”

So Lehman, the major trigger of the current crisis doesn’t agree with you and the Fannie Mae legally binding security filings pre-crisis, when subprime was all the rage, laments its lack of involvement in the subprime market.

Mar 29, 2009 - 12:36 pm 71. Mike M.:

Jimmy J, you’ve identified the problem, but neither cause nor solution.

I think the main issues are institutional investors and stock proxies. Institutional investors give the common man a stake in the stock market, but often don’t vote their stock. They give proxies authorizing someone else to vote for them…often to the corporate executives.

Who are then in a lovely position to pack the board with cronies and loot the company.

The solution is to restrict proxies. A law stating that an individual can’t vote more proxies than the shares he himself owns would do nicely.

The stock corporation has served us well. We just need to fine-tune the administrative details.

Mar 29, 2009 - 1:11 pm 72. goy:

- You don’t quantify this by providing figures…

Heh. Heheh. Looking for figures?

“… de minimis …” – de minimis is not a figure.

“… did not participate in large amounts …” – large amounts is not a figure. And figures (of speech) reported in 2006 about previous activity don’t explain outcomes based on activity in 2006, 2007 and 2008.

“… major trigger …” – major trigger is not a figure. It’s not even demonstrably accurate.

- … you don’t explain how private companies were ‘mandated’ to make these loans to a ruinous extent.
Uhm… stuff like this is now pretty common knowledge.

Mar 29, 2009 - 1:39 pm 73. David Bracewell:

Well Goy, your link is more confirmation of the insignificance of the regulatory framework in +causing+ the issue by its overbearing nature. Lack of regulation is at the heart of the crisis, not regulation per se.

Here is the accusation in the link which undermines the idea that it is at the heart of the crisis.

“In fact, intimidation tactics, public charges of racism and threats to use CRA to block business expansion have enabled ACORN to extract hundreds of millions of dollars in loans and contributions from Americas financial institutions .”

If the current crisis could be expressed in “hundreds of millions of dollars ” then we’d be laughing. The US spends that much in Iraq on a weekly basis.

In terms of providing figures, it’s customary for those who make accusations to provide backing for them.

‘De minimus’ is pretty clear to anyone who is interested in hearing it. But you have to be ready to drop your preconceptions.

If people want to pick up the far right claptrap around Fanny Mae culpability that’s fine, but it is in their interests, if they want to be heard, to provide evidence and not just anecdote (that in any case shows no compelling or even tangential evidence of what they are asserting). I’m interested in seeing the evidence.

If you cannot provide figures linked to a coherent narrative then you’re just reaffirming your prejudice.

“What can be asserted without evidence can also be dismissed without evidence”

Mar 29, 2009 - 3:18 pm 74. goy:

- … your link is more confirmation …
Really? Perhaps you are mistakenly assuming that all banks required ACORN’s and/or Obama’s thuggery to comply, and that many didn’t simply go along with CRA regulations (oops – there’s that dirty R-word again) to avoid it. Since there’s no way to know the answer to that for sure, you’ll have to prove that it was not the case in order to demonstrate that this smoking gun was never actually fired, and proving the negative here isn’t likely going to happen.

Then again, perhaps you’re mistakenly assuming that the assessment offered there comprehensively addresses the breadth and depth of the issue. Perhaps you’re mistakenly assuming that the additional buyers foisted onto the real estate market by CRA didn’t lethally magnify the housing bubble already stimulated by low interest rates. Hard to tell what fantasies your preconceptions are stimulating.

Three to four million families facing foreclosure (hey, there’s a ‘figure’!) certainly adds up to far more than mere “hundreds of millions of dollars”, which the government spends on maintaining a standing military whether they’re in Iraq or not. Ten million new home buyers stuck with negative equity (crap, there’s another figure) certainly adds up to far more than mere “hundreds of millions of dollars”.

The problem (for you) is that the figure is more like three to four million – as in foreclosures. That’s three to four million tens… or hundreds… of thousands of dollars – which is more like tens of billions (hey, another ‘figure’!), depending on the size of the average mortgage involved in each foreclosure. Let’s conservatively call that $50k, average (uh-oh, another figure), knowing that the actual value is probably much higher. This puts the total at a nice round $175 billion. Yeah, I have to admit, that’s “hundreds of millions” – in fact, it’s many thousands of millions. Now multiply that by the dependent derivatives – which were wholly justified by government guarantees which gave FNMA and FHLMC triple-A ratings, irrespective of whether or not you personally “like” the idea – and you get a good picture of the problem.

- Lack of regulation is at the heart of the crisis…
Touche. Now go talk to Andrew Cuomo about his years of manipulation of the system while HUD Sec’y, and Frank, Waters and the rest of the Usual Suspects in Congress who repeatedly resisted regulation of the GSEs at the core of this issue. Or maybe you’re claiming that the banking and/or derivative sector should have been forced to accept regulation of practices leveraging taxpayer-backed instruments, while the special interest whores in Congress responsible for management of those instruments themselves, were justified in openly ridiculing efforts at regulation? Interesting fantasy. Especially given how things turned out.

- In terms of providing figures, it’s customary for those who make accusations to provide backing for them.
Yet you failed, utterly, to do so. Odd, that.

And yes, de minimus is very clear: it’s a characterization, not a figure – as you demanded in your earlier retort, but then failed to provide.

- If you cannot provide figures linked to a coherent narrative then you’re just reaffirming your prejudice.
Right. Your last two posts provided ample examples of that.

Mar 29, 2009 - 7:05 pm 75. David Bracewell:

Start with the end:

“- In terms of providing figures, it’s customary for those who make accusations to provide backing for them.
Yet you failed, utterly, to do so. Odd, that.

And yes, de minimus is very clear: it’s a characterization, not a figure – as you demanded in your earlier retort, but then failed to provide.

- If you cannot provide figures linked to a coherent narrative then you’re just reaffirming your prejudice.
Right. Your last two posts provided ample examples of that.”

You miss my point seemingly willingly. You make the accusation, not me. It is your burden, not mine, to delineate it and you don’t really try.

In any cae I can outline the part about deregulation quite simply.

Securitization was undertaken voluntarily and legally by the large banking and insurance houses within a loose set of regulations that +they+ lobbied for during the Clinton administration and helped craft. No one put a gun to their heads. While FM and FM did lend out along policy lines that saw loans go to lower income people in areas that were informally deemed off-limits, they are not the heart of the meltdown. Nor, obviously is ACORN.

Fannie Mae and Freddie Mac for instance had $1.5 trillion in mortgage backed securities. Of that, $225 billion were subprime . The rest were AAA. The subprime element was the risky part, not the AAA and this was largely due (granted) to their ridiculous overleveraging.

Lehman (the trigger for the crisis – a trigger is not a cause, it is a catalyst and what Bear-Stearns failed to catalyse in the stock market, the bankruptcy of Lehman did), Lehman had twice this debt, over $600 billion – in worthless securities.

Merril Lynch had $50 billion losses in mortgage backed securities.

AIG has a $440 billion exposure to CDOs and has been bailed out to the tune of $170 billion. More is to come.

We don’t really know what the other houses had because this is hidden from us.

However, the corporate shortfall still to be marked to market is probably, according to Nouriel Roubini, around $3.6 trillion. This puts the FMs’ subprime mess in its appropriately tiny perspective – less than one tenth of the mess in gross terms.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aZXiD0hnsSD8&refer=home

All of this was aided and abetted by disastrous +private+ rating agencies that packaged junk as AAA when they didn’t know, or worse when they did know they were selling junk.

There are tens or hundreds of trillions of bets out there in the shape of new financial instruments. They are almost all private or corporate instruments. The CDOs, credit card debt, SIVs, the gutting of manufacturing in the US and so forth – ie corporate, rather than GSE investment vehicles and choices are the huge underlying reason for this crisis. Subprime is a part of this, but only a moderate part.

That government was deeply implicit in this won’t get an argument from me. It was. It largely crafted its legislation with corporate executives holding the pens. It structured +deregulation+ of the market to suit the corporations. Moreover, even a cursory glance at the above figures tells you that FM, FM and ACORN are not at the heart of this crisis.

That seems to be your argument. That the financial mess in the USA is largely an Acorn, FM and FM responsibility. That’s not supported by the figures.

My position is simple and supported by what we know. Both the corporate sector and the government working hand in hand to deregulate it are largely responsible for the mess. FM and FM who came in on this corporate action late in the day (tells you they didn’t structure subprime themselves but got caught up in corporate-driven instruments, as does their report of losing ground to corporate subprime business I gave above) have had some bearing on this crisis.

But to blame government +overregulation+ for corporate malfeasance where the huge trillion dollar losses are in the corporate sphere is about as insupportable as a sub-prime loan.

Last thing.

Lehman’s CEO tells the congress that FM has very little to do with Lehman’s problems. Yet he had only compelling reasons to lay the blame at a GSE’s door. Only compelling reasons. And what did he do? He absolved it.

And if we are to believe your thesis, he lied. He absolved FM by lying against the interests of his own company. He helped to destroy his own job by absolving FM. This would rank as the most mind-numbingly moronic failure to defend his own corporation, one that opens him up to a lawsuit by his shareholders and for a contempt charge in Congress for perjury.

You get the last word.

Mar 29, 2009 - 10:15 pm 76. SkyeChild`:

ObiJohnKenobe:
Believe me, I am furious at all those involved in the disintegration of the economy. Neither side is blameless. I have contacted my congressmen and senators (one of whom is republican and one of whom is democrat, so it’s pretty much a wash).

BUT, I strongly resent those who label me and my family as “greedy” or “greedy capitalists” because we made our money work. Granted, I don’t understand the “dot.coms” and the “bubbles” and the “bull” and “bear” markets very well, but I suspect the majority of the people who DO have money are hard-working, average Americans, not “greedy capitalists.”

Mar 30, 2009 - 6:57 am 77. Scott:

The strictly ‘mercenary’ types at AIG are long gone after the damage was done. To take the analogy further, how many of the Titanic’s crew would have signed on after they hit the iceberg?

It would have had to have been a significant amount paid to survivors to generate any sort of interest at all.

How many of us have been in a situation in which we were told to make lemonade out of lemons? How many of us have told upper management to pound sand? I’d say that it’s not a 1:1 ratio.

What would have happened if the people that stuck hadn’t? If those brought in during the crisis had said sorry, but I can’t? Right now, you’re hammering the band, and the tax bill is being presented to the crew as they lower lifeboats.

Mar 30, 2009 - 7:48 am 78. airfoil:

It’s eighty years on since MONEY was a “Thing”. Absent Gold, or backing, it is merely a concept. 8% of mortgages are in default, fewer are in foreclosure. Alot, but to “Bail Them Out” is a mistake, as is “acquiring” GM. We haven’t lived and functioned in a Capital economy since the Thirties. Money is Fuel, not conveyance; it is also merely a Tool, as evidence of that, notice how easily folks are distracted by the shiny object? Goodbye Sweet America.

It is too late to teach America the difference between Power, and Influence.

Mar 30, 2009 - 8:22 am 79. goy:

- You get the last word.
Okay, here you go:

The deregulation you refer to is repeal of Glass-Steagall. Since the government insures against loss of deposits, not against insurance payout exposure incident to derivative contracts (the overwhelming portion of debt leading to the call for a bailout), that particular deregulation wasn’t even a factor here.

Meanwhile, citing numbers and their relative sizes ignores the sensitive dependence on initial conditions necessary to understand the entire chaotic sequence. Lehman was far from the only participant here, and the circular logic of insisting they were the ‘trigger’ – which requires ignoring the root cause – is an ideologically driven thesis aimed at blaming business for maximizing profits based on the rules defined by government.

The End

Mar 30, 2009 - 10:23 am 80. David Bracewell:

The Gramm-Leach-Bliley Act which repealed GS act did more than that.

http://www.kutakrock.com/publications/bankingandcommerciallending/gramm-leach-bliley_act.doc

See:

SELECTIVE SUMMARY OF TITLE II: FUNCTIONAL REGULATION/Highlights/Sections 201 through 241

–provides for limited exemptions from broker-dealer registration for transactions in the following areas: trust, safekeeping, custodian, shareholder and employee benefit plans, sweep accounts, private placements (under certain conditions), and third party networking arrangements to offer brokerage services to bank customers, among others;

–allows banks to continue to be active participants in the derivatives business for all credit and equity swaps (other than equity swaps to retail customers);

And also a handy summary in wiki:

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act#Effect_on_usury_law_in_Arkansas_.26_other_states

“It exempted swap agreements from regulation in amending the Securities Act of 1933, Section 2A, and similarly the Securities Exchange Act of 1934, Section 3A, to read, in part:[20] [21]

1. The definition of “security” in section 2(a)(1) does not include any security-based swap agreement (as defined in section 206B of the Gramm-Leach-Bliley Act [15 USCS § 78c note]).
2. The Commission is prohibited from registering, or requiring, recommending, or suggesting, the registration under this title of any security-based swap agreement[.] …

3. The Commission is prohibited from … promulgating, interpreting, or enforcing rules; or … issuing orders of general applicability; … as prophylactic measures against fraud, manipulation, or insider trading with respect to any security-based swap agreement[.]”

It is these derivatives that more than anything are at the heart of the crisis, since as the sub-prime crisis kicked in, as the lack of worth of financial institutions was finally exposed, a massively increased risk of triggering these CDOs also kicked in.

THAT is at the heart of the credit crunch and the obligations under these CDO are absolutely mind-blowingly crippling to the US. As you say, but do not actually bring to your argument – placing it all on government regulation of all things – there is a sensitive dependence on initial conditions necessary to understand the entire chaotic sequence.

But the initial conditions were deregulatory as shown by the repeals of those sections of the Securities Act, not “regulatory” and it is hard to see how anyone could argue otherwise. Ideologues certainly weren’t in 2006 when Gramm’s act was seen as ‘deregulation’ by the broad political spectrum and held up proudly as that. It is only now that deregulation is being seen for the absolutely crass handover to Soviet-like organizations that are fused in many formal and informal ways to government and that have nothing to do with real entrepreneurialism, nothing to do with actually building anything, that the word is being replaced by ideologues with ‘regulation’.

You are the one with the ideological bent here because in the very same paragraph in which you call on my faculties to appreciate that ‘sensitive dependence’ you say I am “blaming business for maximizing profits based on the rules defined by government.”

That “blaming business for maximizing profits” is a giveaway.

This is a way of exculpating idiocy. There is no business environment in the world that doesn’t operate on rules. Some are corporate driven as in the United States – that is, the corporations spent vast quantities of money to undermine their democracy in order to structure according to their desires, actually writing the legislation alongside officials who were for the most part from that industry; some are driven more by the electorate where oversight is taken seriously. What you are effectively saying here sort of has a built in definitional removal of business from any blame. The definition between regulation and deregulation is obliterated by you.

If the government owns the rules, then by your ideological definition it is always a problem of regulation.

It doesn’t really matter who triggered the crisis, it’s just that Lehman’s termination did. If FM had triggered the crisis it would not have placed FM at the heart of the issue. As I make clear, the scale of the financial problem is not at all matched by the scale of FM and FMs’ subprime problem which were a mere half of Lehman’s.

I find it incomprehensible how so many Americans confuse this statist, corporate driven nation, which drives out small business and fosters oligopolies, with an entrepreneurial nation. It ceased being that fifty years ago. It does oligopoly better than anyone else in the world. Products are great and so on. But its not business as we know it Jim. It’s a huge vortex sweeping up capital and talent and rearranging peoples’ lives in disastrous ways that foster +dependency+, not independence.

Go read Tocqueville’s ‘Democracy in America’ to see what Americans were like back in the age of true entrepreneurship. What is striking about it is that egalitarianism and far smaller wealth differentials were at the heart of US success then, just as this corporate disaster now is a product of over concentration of capital, which is manifested most strongly in an industry the size of which has no possible justification. It’s a leech industry, a manifestation of the degradation of entrepreneurship as a national treasure and it was enabled by deregulation which was proudly called ‘deregulation’ prior to it imploding the wealth of America.

OK, so I couldn’t help myself

Take care

David

Mar 30, 2009 - 12:28 pm 81. ZZMike:

There’s no shortage of heroes. Unfortunately, few of them in the financial sector. And even fewer in the halls of power.

One that should not be forgot is Rick Rescorla, who died in the WTC on 9/11:

Rick Rescorla

Born in Britain, served in Rhodesia, moved to the US, joined the Army, went through OCS, served with distinction in Viet Nam. After that war, he came back, went to work for Morgan Stanley as their security chief.

The morning of 9/11, he helped evacuate about 2700 Morgan Stanley employees. From the Wiki article:

“… sang God Bless America and other military and Cornish songs over his bullhorn to help evacuees stay calm as they left the building, including an adaptation of the song Men of Harlech:

Men of Cornwall stop your dreaming;
Can’t you see their spearpoints gleaming?
See their warriors’ pennants streaming
To this battlefield.
Men of Cornwall stand ye steady;
It cannot be ever said ye
for the battle were not ready;
Stand and never yield!”

Then he went back in to bring out more people.

He was the Vice-President of Security. I doubt anyone saw any other Vice Presidents running evacuation.

Mar 30, 2009 - 1:13 pm 82. Bill Whittle:

Men of Harlech is an AWESOME song. At the end of ZULU the British at Rorke’s Drift sing this song and it’s enough to make your heart burst with pride.

Mar 30, 2009 - 1:53 pm 83. Mikael:

Other heroes on the Titanic (or at least displaying stoicism) are the male 1. class passengers who – after having seen to that their wives and children were safe in the lifeboats – went back to their cabins and changed into dinner jackets, because that’s how a Gentleman should meet his maker.

It was a very different mindset back then.

Mar 31, 2009 - 2:21 am 84. Mrs. du Toit:

Tell me why *we* should get the brunt of your rant, Mrs. DuToit.

You didn’t.

If you are investing money you can’t afford to lose, then stop investing it, and put it under the mattress.

You want the unregulated risk that brings you fortune, but not the other side of the risk coin, which is loss?

Can’t have it both ways. Choose.

Mar 31, 2009 - 6:00 am 85. airfoil:

Mr. Bracewell, well put. How ironic the language of the Gramm Bill echoes the Constitution in “preventing” an intrusion of government into “swaps”. As I say, we haven’t functioned in a capital economy since the 1930’s. The “citizen” is the corporation, not the individual, and its life parallels what was intended by the Framers. Swaps are a preotected form of Casino where the player doesn’t have one role, he is house and bettor. A metaphor for the decrepit state of the State, where individual primacy is a ghost,and has been supplanted with Global Backgammon players.

Mar 31, 2009 - 8:05 am 86. goy:

- The Gramm-Leach-Bliley Act which repealed GS act did more than that.

Of course it did, David. But none of it is relevant to the root cause of the problem.

You say it “doesn’t matter” what triggered the crisis. You sling magnitudes of the sums as though they’re the overriding – or perhaps even the only significant – factor. You don’t appear to understand (or are willfully ignoring) the dependency in the relationships of those sums to one another – relationships that are independent of their magnitudes. You hold the popular, erroneous opinion that derivative markets have nothing to do with building anything. This process was a reaction chain, David, and it had initial conditions and a root cause. I have no intention of attempting to convince you, but since you can’t be taken at your word, let me continue by way of spelling all that out for you, in case you really were interested.

GSEs didn’t increase their purchase of high-risk mortgages because the derivative markets were demanding more securities on which to base new instruments. GSEs increased those purchases because of an overweening, increasingly socialist government’s religious obsession with “affordable” housing (read: vote buying), built on the backs of the U.S. Taxpayer – that productive portion of our society that shoulders the bulk of the tax burden for all 300+ Million (plus illegals). Derivatives were not the motivation for the GSEs’ decision to purchase ever-increasing bundles of ever-higher-risk loans.

Derivatives – regulated or “deregulated” – didn’t artificially inflate housing prices by flooding the market with millions of unqualified new home buyers, who would otherwise have been barred from the market if it hadn’t been corrupted by the GSEs’ promotion of high-risk home loans backed by the Treasury (i.e., the Taxpayer). Derivatives didn’t contribute to the housing bubble which took down not only the “bad” loans when it popped, but far too many of the “good” ones as well, along with any derivative instruments that depended upon them.

Derivative markets didn’t cause the pandemic negative equity that resulted once artificially inflated housing prices were corrected. This negative equity was the source of the “toxic assets” at the heart of our lending institutions’ inability to provide credit. Derivatives weren’t responsible for this. On the contrary, this pervasive negative equity contributed to the losses incurred throughout the derivative markets that depended, sometimes by multiple layers, upon the mortgage securities involved.

Derivative markets didn’t cause the record millions of mortgage foreclosures experienced by new home buyers (or those who refinanced themselves into an overleveraged state) as interest rates were raised 17 times and the artificially inflated housing market corrected itself. Those foreclosures were in large part the result of bad lending practices implemented by banks trying to comply with CRA, who justifiably feared litigious thuggery from people like ACORN and Barack Obama after Citibank was made an example of, and who – most importantly – knew they could sell those mortgages to FM and FM after Clinton legislated lower standards for GSE mortgage purchases. Derivatives didn’t cause bad loan policy, they were its victims.

The federal government was forced to double its GSE bailout total for FM & FM in February – from $200B to $400B. $200B used to be the amount that was considered much more than the GSEs would ever need to cover their defaulting securities. As of this last month, $400B is NOW the amount they claim will really, honestly, absolutely, beyond a shadow of a doubt be more than the GSEs will ever need. Next month, who knows?

The government wasn’t forced to double this burden on the taxpayer because of derivatives. It was forced to do so, at least in part, because of damage done to the derivative market. This damage came from the combination of a popped housing bubble and disastrous federal economic policies. Confidence in the economy has been shattered, and that’s had its own effects on an economy that was already in a mild recession as a result of business’ response to the newly elected Democrat majority in Congress. Going by root cause, the government was forced to double this amount because of its own (i.e., the GSEs’) suicidal economic policies – policies blessed by the federal government and all but legislatively guaranteed by same as impervious to the Law of Unintended Consequences, through backing from the Treasury.

Magnitudes of sums are not the issue here. Cause and effect is the issue. Without the cause, and the effect, the magnitudes of the sums are irrelevant. QED.

This is all discussed above, and a vital element necessary to understanding it is the chronicle (linked up there) of Cuomo’s exploits as the utterly-inexperienced-but-all-powerful (sound familiar?) czar in charge of federally-guaranteed “affordable” housing. It even pays homage to some of the shibboleths you think are most significant, David, and places them in context of the larger problem.

There seems to be a pervading opinion in some circles that CRA and the government policies that drove and supported it have “plausible deniability” in terms of their part as the root cause of all this. Absent a root cause, the inclination is to look for what made the result of this “causeless” fiasco so severe. The easiest target for a class-baiting administration and Fifth Column media – as always – is “corporate greed”, “Wall Street” and financial markets that “don’t build anything” and which are “deregulated” such that they grow to a size for which there is “no possible justification” (well, other than the market they serve).

Of course no one complains as long as everyone’s profiting with little apparent risk. I find it interesting that the financial industry – including the derivatives market – wasn’t deemed a “leech” as long as it was endlessly increasing the value of the middle class’ 401-Ks and providing billions in cash for investment in the stock market (i.e., in other businesses, etc.), as well as billions in corporate tax revenue for a Congress whose nominal comprehension of business is as a revenue source. See Mrs. du Toit’s #83 for the basics in this regard.

The notion that the size of a particular sector has “no possible justification” is pretty revealing of any adherent. This thinking goes hand-in-hand with the notion that some arbitrary salary – when it reaches a high enough level – has “no possible justification”. The fact is that the market determines the justification.

Finally, comparison of today with a predecessor scenario where life was “more egalitarian”, and the concomitant assumption of causation without evidence expressed by “small wealth differentials were at the heart of US success”, equates to measuring horse-driven carts against space shuttles, using informal fallacy as a guide.

Mar 31, 2009 - 12:36 pm 87. David Bracewell:

Yet again you make assertions without providing hard linkeages to help prove them.

You challenge me to produce numbers and when I do you say:

“You sling magnitudes of the sums as though they’re the overriding – or perhaps even the only significant – factor.”

As if magnitude were not a measure of root causes. It’s been said that ice cubes, as an example, would not have sunk the Titanic where a massive chunk of iceberg did. Magnitude is central to the issue of root causes.

In any case I don’t “sling magnitudes of the sums as though …[they] were the ONLY significant .. factor”. Not at all. I specifically say sub-prime was a +moderate+ part of the problem. FM a much smaller part. I also show that the very deep-rooted nature of the US government structures favouring corporations fosters dependency on subsidised corporations even as they take their manufacturing and money elsewhere.

But let me be clear. While I see this as multi-causal, you are arguing that government ’socialism’ and specifically FM are at the heart of the crisis. So you in effect reverse the reality. You are the one supporting a mono-causal narrative.

You assert this:

“Derivatives – regulated or “deregulated” – didn’t artificially inflate housing prices by flooding the market with millions of unqualified new home buyers”

I’m saying to you a very simply thing. The sub-prime problem is a fraction of the overall problem, which existed in a risk model that would have failed in any case – that didn’t require the subprime mess (let alone the smallish FM portion of it) to cause the chaos.

If it hadn’t been subprime it would have been credit card debt, or foreign nations balking on US treasuries or balance of payments problems or social unrest as further manufacturers fled the US. These are issues that would ultimately have triggered the event because there are structural problems along with inefficient income distribution and industrial viability in the States – created by corporate-pocketed government. And because of this, because Americans are tapped out debtors, it was just a matter of time until the swaps issue, based around US consumption, would have arisen.

Now I’m sorry if this order of magnitude thing gets to you, but it is the underlying reality. To get back to Bill’s topic, your argument is effectively:

“Bracewell, you are a mono-causal thinker because you refuse to recognise that it wasn’t the whole iceberg that caused the titanic to sink, but just the tip of it that made that almighty gash.”

Well no, if that tip weren’t there, there is always another to spearhead the monstrous inertia and weight of that object. The tip alone would have been brushed aside. FM wasn’t even the tip.

Let me tell you categorically that the sub-prime mess is handlable by itself. It may have caused a recession, but it is a combination of the US’s deep indebtedness to the world, flight of manufacturing, loss of decent wages and lastly the derivatives industry that are the killers, because the contracts out there are several times US GDP, tens and tens of trillions of dollars.

Governments are bailing these corporations out for 2 major reasons.

- Derivatives, the collapse of which would see the economies of the world go down rapidly.
- And protection of foreign government treasury and bond holders who hold the US in hock because of its consumption profligacy.

Take these 2 things out of the equation and the sub prime mess becomes handlable. You can simply take the financial industry through a bankruptcy procedure. Recession yes. Depression – and we are going to have one – no. The bailouts are peripherally to do with subprime. They are actually about keeping those 2 issues – foreign bond holder confidence and the attempt to limit swaps triggering in a bankrupt environment – from getting out of the bag. The second issue is what made the Lehman bankruptcy such a watershed moment. It told government there was no room to move – not because of sub-prime but because of the triggering of insolvent swaps that saw markets plunge (Dow by 500 points) across the world the day after.

None of this has a remote relationship to what you laughably call ’socialism’.

So:

- You don’t support the argument that subprime is of the scale to have caused this crisis. You won’t be able to because it is not of an order that could cause anything but a recession.

- You don’t support by figures any crippling amount of the subprime mess that was +forced+ on private industry. You won’t be able to.

- You can’t provide figures of a scale that would show GSEs are at the heart of it. On the contrary, you show figures that indicate the moderateness of the issue.

- You don’t recognize that sub-prime preceded any GSE involvment in it, that it was a corporate and not a government instrument, and that the holders of these securities are mainly corporate holdings, not GSE holdings. Also that these private contracts were undertaken +voluntarily+, not by order of government.

This sort of comment is bewildering :

“You don’t appear to understand (or are willfully ignoring) the dependency in the relationships of those sums to one another – relationships that are independent of their magnitudes”

Not because it is beyond me, but because you keep making a claim on this enormously subtle narrative that you fail then to cogently produce. Your narrative is predetermined. It’s socialism, quasi government companies are to blame, regulation not deregulation is at the heart of the mess. Nothing will change this for you because it is an article of faith for you. I know its an article of faith because you shy away from the scale of the other issues, the reality of the figures that sit largely in the corporate realm and from blindingly obvious responsibility of deregulation that even Alan Greenspan now agrees was an issue.

Until you can show how the GSEs, through “the dependency in the relationships of those sums to one another “, have a greater impact on this crisis than the private sector which carries enormously larger sums of debt instruments, subprime among them; or show that GSEs have a greater impact than the avalanche of swaps and private sub-prime entered into voluntarily by corporations, you don’t have a narrative that comfortably fits your view of its reliability.

For instance this may be true:

“GSEs didn’t increase their purchase of high-risk mortgages because the derivative markets were demanding more securities on which to base new instruments. GSEs increased those purchases because of an overweening, increasingly socialist government’s religious obsession with “affordable” housing (read: vote buying)….”.

But its not relevant as a root cause of the problem, only as a trigger – which is not even my argument – to the current crisis exactly because of its scale, which is piddling.

And this:

“Derivatives – regulated or “deregulated” – didn’t artificially inflate housing prices by flooding the market with millions of unqualified new home buyers, who would otherwise have been barred from the market if it hadn’t been corrupted by the GSEs’ promotion of high-risk home loans backed by the Treasury ”

Is a feckless conflation of the GSE dabbling in subprime with the major players’ full blown jumping into it. Those who invented and foisted sub-prime on Americans in the first place were corporations who were doing this on a large scale YEARS before FM went into the market. And not for socialist reasons but for ideological ones and with the feckless belief that housing prices would never come down.

We can agree on this: “This damage came from the combination of a popped housing bubble and disastrous federal economic policies.”

The policies that produced thses things were fundamentally redistributive (upwards), destructive of real industry, profligate in terms of letting this leech sector grow and so on.

As far as the industry being a leech industry, I’ve always called it that and for anyone with eyes to see, this crisis was a long time coming. It’s no surprise to me and my feelings toward the dependency structures of the US haven’t changes in years. Corporatism is government run by industry for industry and shares many common features with a Soviet economy. That is what Republicans with the Democrats meekly trotting behind ultimately bequeathed the US, A deeply dependent people completely tapped out and unable to fight the economies of scale, the increasingly corporate-favourable legislation and the suction of all business life upwards .

Mar 31, 2009 - 2:56 pm 88. enscout:

Wait a minute. Give credit where it’s due.
There’s MEP Hannan:
http://www.youtube.com/watch?v=94lW6Y4tBXs
Speaking for conservatives everywhere.

Mar 31, 2009 - 3:42 pm 89. Jim Callihan:

I’ve heard it said that the WTC buildings, you remember those shacks? Those shoddy tender-boxes that fell and burned like pine cones…from “280 degree” heat; well at least two of them, the third building, though never physically touched, simply imploded out of fear. Well anyway, the guy that spent 150 million dollars in payments on them, Larry-Boy, got a check for “7.4 BILLION DOLLARS” from his insurer…rumored to be none other than AIG. How can this be investigated? And if that be true…sound like “hush money” or “gratitude payments” by a country that FREED IRAQ simply because they had oil and cash…ooops! I mean a really bad guy running their country…and, uhh, errr…I mean “they threatened us with weapons of mass destruction”. (btw – go to YouTube and watch the Paul Oneil/60 minutes “lost” interview). AIG is a hero and a patriot if this is true. In fact…they ought to be getting some of those oil revenues to repay them! And…forever held in high esteem by the Carlyle “Iron Triangle” Group! Anybody need guns? Tanks? Warplanes? Depleted Uranium?

One giant cluster-f$%^K from the global bankers…same ol same ol, different victims. http://publiccentralbank.com

Have a great day!

Apr 1, 2009 - 6:22 am 90. Fritz:

Hey, what’s with the blue background? It makes the text very difficult to read. And it looks awful!

Apr 3, 2009 - 4:57 am 91. Stogie:

There are a lot of misconceptions about AIG and the failure of the banking system. Seems many people would rather rely on their first, emotional, uninformed gut reaction than to find out the facts. Read “Meltdown” by Thomas E. Woods Jr. And PUH-LEEZE, don’t talk about “greed” and “morality” in the marketplace — economic forces are largely impersonal. To do so implies you are a moonbat liberal who thinks the marketplace should be less free and more managed by socialits. Yeah, that’ll work. /sarc off

I loved the story of the Titanic musicians. They were indeed brave and gallant men. I read that a trumpet was found near the Titanic wreck and cleaned up and restored; however, no one is allowed to play it. The conservators of this artifact realize that the last person to play it was the Titanic musician who owned it and they don’t want that to change.

Apr 7, 2009 - 11:59 am 92. MarkD:

Thank you for writing this.

I’d argue the larger failure is that we do not shun today’s Bruce Ismays. We get what we tolerate and we tolerate too much.

Apr 9, 2009 - 11:20 am 93. Alchamar:

This is one of them there “Sad but True” parables. The fact is, this sort of nonsense is seen as acceptable because it is so in practice. Very few people today are held accountable for their poor behavior or performance. And that gets skewed even further when you factor in wealth and fame. The threat of law has been replaced by style points for how much you can get away with and how good your formulaic public apology is. Meawhile, honorable conduct is viewed as antiquated and not good for the bottom line. We have these leaders ( both in politics and business) because we put up with them and the things they do. Make scandal and failure too terrible to bear ( like through real, equally enforced law and social stigma) instead of rewarding such mickey mouse b.s., and see how fast things change.
The way things are now, I’m truly afraid of what the future holds. When I’m a crotchety old man the world will be in the hands of a generation that never got spanked when they screwed up. An entire generation of men and women that never learned what it means to be held accountable, to take responsibility for their actions. It was always ok to fail, always someone else’s fault, or fill in the latest pop psychology sensation of your choice. Feh.

Apr 12, 2009 - 1:39 pm 94. ASM826:

Heroes are often unseen and unheralded, particularly in the media. I would only object to your closing comment, in that we don’t know that there are no heroes today, and we don’t know what they may be doing.

If this accident had occurred today, would the band have even been mentioned in the news coverage?

May 4, 2009 - 11:53 am

Provinces

Rachel Lucas
Smart, funny, fearless, cute and the inventor of the! slam! critique! format! The nicest person I have never met.

USS Clueless
The most superb analysis of military, engineering and scientific systems available in this medium. Read EVERYTHING in his Best Log Entries and Essential Library. When you have finished you will feel like you spent hours under the Krell mind machine.

James Lileks
The Bleats are hysterical, the Screeds are brilliant and hysterical, and there is no more entertaining afternoon on the web than a tour of The Institute of Official Cheer. Beyond genius.

Belmont Club
Stunningly original insights and what has been simply the best analysis of events on the ground in Iraq that I have ever come across. Genuinely magnificent thinking.

The Anti-Idiotarian Rottweiler
Emperor Misha I gets his blood pressure up so that you don't have to. Real red-meat attacks on Idiotarians and America-haters, both foreign and domestic.

Transterrestrial Musings
Rocket science analysis of space and politics from a genuine rocket scientist!

The Futurist
Profound megatrends and very original insights. Plus graphs, so it must be true!

IMAO
I could write as funny as this if I wanted to. I could. I could! Damn you, Frank...

National Review Online
Top-notch conservative commentary from actual journalists! Watch especially for Goldberg, Derbyshire, and the TITAN of conservative thought, the brilliant, irreplaceable Victor Davis Hanson.

Instapundit
All hail the Blogfather! Glenn Reynolds practically invented the medium. Without him, you'd be staring at your screensaver right now. If you want to know what's going on RIGHT NOW you go to the Instameister. So go!

Name:	(required, displayed)
Email:	(required, not publicized)
URL:	(optional, displayed)
Comments:

Pajamas Media

Email This to a Friend

TONE DEAF

94 Comments

Write a Comment

Recent Posts

Archives

Provinces

PajamasXpress Blogs

PJM Political

DAILY DIGEST

THE EDITORS @ PJM