They Just Don't Get It
By Steven Pearlstein Tuesday, September 30, 2008; D01
That is the technical economic term that best sums up a day in which the House of Representatives refuses to pass a $700 billion rescue plan pushed by the White House and congressional leaders from both parties, Wachovia is taken over in a deal that will have the government potentially owning 10 percent of Citigroup, a few European banks fail, the Federal Reserve and other central banks are forced to inject an additional $300 billion into the global banking system, the Dow Jones industrial average plunges 778 points, and investors everywhere rush to the safety of gold and short-term Treasury bills.
The basic problem here is that too many people don't understand the seriousness of the situation.
I enjoy Steven Pearlstein and have lauded his wisdom and clarity many a time---but on this issue he is absolutely dead wrong. Americans understand what is going on in Congress fully well enough and are unwilling to bail out Wall Street's gambling losses and send them back to the tables in Vegas.
Lost in the giddyness of $100 million salaries and joking among themselves of 'liar loans' that brought down an already structurally unsound financial house, the fraudsters, cheats and opportunists hope to fire 25,000 middlemen, be made well by Congress and ooze back to the game. The average wage of those sent home from busted brokerages was $625,000 and Mr. 'Average American," at $32,000 is (astoundingly) asked to make it all well.
This was a classic RICO scam and must be treated as one, instead of holding hostage an enraged American public with the threat of meltdown. Pearlstein would pat the over-eater on the hand and buy them a double-chocolate sundae. The American public is ready to take the hit. They are tough as hell.
What the American public is not ready to accept, is crappy and overpriced government, completely devoid of ethics, backbone, oversight and regulation. Those euphemistically called inside the beltway, rather than the paid enablers of Wall Street they are, have their tit in a wrnger over yet another bailout.
Reagan era deregulation has finally brought us down, just as the wheels came off a busted and criminal communist system. Deregulation is a failure. Hedge funds are a toxic virus to the body politic. Greed is the natural state of man, if no controls exist to rein in his ambition. RICO (the Racketeer Influenced and Corrupt Organizations Act) exists for exactly this purpose--
(Wikipedia) Under RICO, a person who is a member of an enterprise that has committed any two of 35 crimes—27 federal crimes and 8 state crimes—within a 10-year period can be charged with racketeering. Those found guilty of racketeering can be fined up to $25,000 and/or sentenced to 20 years in prison per racketeering count. In addition, the racketeer must forfeit all ill-gotten gains and interest in any business gained through a pattern of "racketeering activity." RICO also permits a private individual harmed by the actions of such an enterprise to file a civil suit; if successful, the individual can collect treble damages.
Americans are (reprising the movie 'Network') "mad as hell and not going to take it anymore." They see another scam in the making, coming out of a scam-producing Congress and the most morally disinterested presidency of their lifetimes.
We are tough sons-o-bitches out here beyond Washington and we are willing to face consequences rather than let Congress continue to piss away our lives, our fortunes and our sacred honor in the service of those whose votes were bought and paid-for.