HOME



Digby's Hullabaloo
2801 Ocean Park Blvd.
Box 157
Santa Monica, Ca 90405



Facebook: Digby Parton

Twitter:
@digby56
@Gaius_Publius
@BloggersRUs (Tom Sullivan)
@spockosbrain



emails:
Digby:
thedigbyblog at gmail
Dennis:
satniteflix at gmail
Gaius:
publius.gaius at gmail
Tom:
tpostsully at gmail
Spocko:
Spockosbrain at gmail
tristero:
Richardein at me.com








Infomania

Salon
Buzzflash
Mother Jones
Raw Story
Huffington Post
Slate
Crooks and Liars
American Prospect
New Republic


Denofcinema.com: Saturday Night at the Movies by Dennis Hartley review archive

January 2003 February 2003 March 2003 April 2003 May 2003 June 2003 July 2003 August 2003 September 2003 October 2003 November 2003 December 2003 January 2004 February 2004 March 2004 April 2004 May 2004 June 2004 July 2004 August 2004 September 2004 October 2004 November 2004 December 2004 January 2005 February 2005 March 2005 April 2005 May 2005 June 2005 July 2005 August 2005 September 2005 October 2005 November 2005 December 2005 January 2006 February 2006 March 2006 April 2006 May 2006 June 2006 July 2006 August 2006 September 2006 October 2006 November 2006 December 2006 January 2007 February 2007 March 2007 April 2007 May 2007 June 2007 July 2007 August 2007 September 2007 October 2007 November 2007 December 2007 January 2008 February 2008 March 2008 April 2008 May 2008 June 2008 July 2008 August 2008 September 2008 October 2008 November 2008 December 2008 January 2009 February 2009 March 2009 April 2009 May 2009 June 2009 July 2009 August 2009 September 2009 October 2009 November 2009 December 2009 January 2010 February 2010 March 2010 April 2010 May 2010 June 2010 July 2010 August 2010 September 2010 October 2010 November 2010 December 2010 January 2011 February 2011 March 2011 April 2011 May 2011 June 2011 July 2011 August 2011 September 2011 October 2011 November 2011 December 2011 January 2012 February 2012 March 2012 April 2012 May 2012 June 2012 July 2012 August 2012 September 2012 October 2012 November 2012 December 2012 January 2013 February 2013 March 2013 April 2013 May 2013 June 2013 July 2013 August 2013 September 2013 October 2013 November 2013 December 2013 January 2014 February 2014 March 2014 April 2014 May 2014 June 2014 July 2014 August 2014 September 2014 October 2014 November 2014 December 2014 January 2015 February 2015 March 2015 April 2015 May 2015 June 2015 July 2015 August 2015 September 2015 October 2015 November 2015 December 2015 January 2016 February 2016 March 2016 April 2016 May 2016 June 2016 July 2016 August 2016 September 2016 October 2016 November 2016 December 2016 January 2017 February 2017 March 2017 April 2017 May 2017 June 2017 July 2017 August 2017 September 2017 October 2017 November 2017 December 2017 January 2018 February 2018 March 2018 April 2018 May 2018 June 2018 July 2018 August 2018 September 2018 October 2018


 

This page is powered by Blogger. Isn't yours?

Hullabaloo


Monday, January 18, 2016

 

A moral and financial black hole

by Tom Sullivan

Not all drugs have to be injected, ingested or inhaled. Yesterday, I drew parallels between the man-made crisis on Wall Street and the man-made water crisis in Flint Michigan. The reason is that the amoral pursuit of personal gain is an addiction that goes far beyond Wall Street. The Big Short made a big impression, can you tell?

The Guardian's Tim Adams spoke with "The Big Short" author Michael Lewis about the film's protagonists:

The idea that the madness was going to get worse did not occur to him. “In fact, it got worse and worse to the point where people were paid unbelievable fortunes just to do stupid things with money. Even the movie can’t really get this across. The movie gets across that there was a bet and these smart guys were on the right side of the bet. And those smart guys made hundreds of millions of dollars. That inevitably leaves you thinking that the people on the other side of the bet lost. Of course, the banks went down. But the real story is the actual people on the other side of the bet also got very rich despite the banks collapsing. If no matter what side of the bet you are on things are still going to work out for you, the world is upside down.”

In a pivotal scene, two cocky, Florida mortgage brokers explain to hedge fund traders how they are getting rich selling subprime, adjustable rate loans to immigrants and strippers. Flabbergasted, the hedge fund boys step out of earshot to consult:

Mark Baum: I don't get it. Why are they confessing?
Danny Moses: They're not confessing.
Porter Collins: They're bragging.

The street-level brolers were simply the bottom feeders supplying Wall Street with the raw material for more and more mortgage-backed securities. They mirrored the upstate New York broker, Glen, from Planet Money's May 2008 "The Giant Pool of Money":

Alex Blumberg: Glen had five cars, a $1.5 million vacation house in Connecticut, and a penthouse that he rented in Manhattan. And he made all this money making very large loans to very poor people with bad credit.

Glen Pizzolorusso: We looked at loans, these people didn't have a pot to piss in. I mean, they could barely make the car payment, and now we're giving them a $300,000 to $400,000 house.

Alex Blumberg: But Glen didn't worry about whether these loans were good either. That was someone else's problem. And this way of thinking thrived at every step of this mortgage security chain. A guy like Mike Francis from Morgan Stanley, he told me he bought loans, lots of loans, from Glen's company. And he knew in his gut that they were bad loans, like these NINA loans.

He just didn't care. Everybody else was doing it. And they were all getting rich doing it.

The gravitational attraction of the kind of personal wealth being accumulated not just on Wall Street but in the metastasized global economy is a kind of moral and financial black hole from which few escape. The traders Lewis found to profile are not heroes. They themselves profited from the financial corruption by betting against the banks peddling the fraudulent loans. What made them open up to Lewis was that he had worked at Salomon Brothers left to make a name for himself by exposing Wall Street's excesses in "Liar's Poker." Lewis left Salomon Brothers to write his book after receiving a $200,000 bonus. His father urged him to stay another 10 years, then write his book:

Lewis was 27 at the time. He looked around at colleagues at the bank who were 37, the men who might 10 years ago have said the same thing. He saw nothing left in them that suggested they could leave. They had been so transformed by the rates of pay and the needs it had created in them, they couldn’t escape from it.

The charter school industry, and the privatization of prisons, water systems, highways, and other public infrastructure – hell, the Powerball lottery – are simply quieter manifestations of the cultural celebration of greed as a virtue and wealth accumulation as a secular sacrament. In the Midas Cult, Donald Trump and Jamie Dimon are high priests.

Malcolm Harris writes at Al Jazeera about how that concentrates rather than distributes power in what is still nominally a democratic republic. So much so that the emerging oligarchy is becoming open about it:

Democracy isn’t supposed to be a vehicle for wealthy people to hedge their bets, but the open secret is that capitalism is more than just an economic regime. It’s a total social system, and it’s ruled by a small class of people, not elected representatives as such. The practices that we think of as making up democracy — like voting, volunteerings, protesting, writing op-eds — are just part of what determines the structure of American social reality, and not a very big part when it comes down to it. Between “money is power” and “all power to the people,” we know which one describes life in the United States.

That imbalance threatens to shift the world's axis. Oxfam UK released a report in which it finds "62 of the world’s richest people own as much as the poorest half of humanity combined."

Oxfam GB chief executive Mark Goldring explains:

“It is simply unacceptable that the poorest half of the world population owns no more than a small group of the global super-rich – so few, you could fit them all on a single coach,” he said.

“World leaders’ concern about the escalating inequality crisis has so far not translated into concrete action to ensure that those at the bottom get their fair share of economic growth. In a world where one in nine people go to bed hungry every night we cannot afford to carry on giving the richest an ever bigger slice of the cake.

“We need to end the era of tax havens which has allowed rich individuals and multinational companies to avoid their responsibilities to society by hiding ever increasing amounts of money offshore.

Wall Street is only the most visible tip of the iceberg.