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Greed is Good Redux

Posted: December 20, 2011 | Author: | Filed under: #Occupy and We are the 99 percent!, The Bonus Class | Tags: , |17 Comments

The real life Gordon Gekko set went to an investor’s conference in Gotham City to defend wealth this month.  I dare you to find much difference between some of the quotes I read in this Bloomberg article and the Greed is Good speech.  Remember most of these are guys are bankers.  These aren’t guys that make cars, produce wheat, or build houses.  These are functionaries of overhead and gambling.  They still don’t seem to get that people don’t hate rich people that come by their money without manipulation of laws, favorable tax treatment, and government subsidies and bailouts.  It’s people that get wealthy by gaming the system, raiding the US treasury, and extracting huge salaries for running failed casino operations that are the targets of anger these days.  I guess all that money doesn’t guarantee you’ll actually be able to use your brain or your common sense to solve a problem.

Here’s a pretty good example of some whining that deserves no sympathy.

The organization assisted John A. Allison IV, a director of BB&T Corp. (BBT), the ninth-largest U.S. bank, and Staples Inc. co- founder Thomas Stemberg with media appearances this month.

“It still feels lonely, but the chorus is definitely increased,” Allison, 63, a former CEO of the Winston-Salem, North Carolina-based bank and now a professor at Wake Forest University’s business school, said in an interview.

At a lunch in New York, Stemberg and Allison shared their disdain for Section 953(b) of the Dodd-Frank Act, which requires public companies to disclose the ratio between the compensation of their CEOs and employee medians, according to Allison. The rule, still being fine-tuned by the Securities and Exchange Commission, is “incredibly wasteful” because it takes up time and resources, he said. Stemberg called the rule “insane” in an e-mail to Bloomberg News.

“Instead of an attack on the 1 percent, let’s call it an attack on the very productive,” Allison said. “This attack is destructive.”

Oh, wait.  There’s more.

Asked if he were willing to pay more taxes in a Nov. 30 interview with Bloomberg Television, Blackstone Group LP (BX) CEO Stephen Schwarzman spoke about lower-income U.S. families who pay no income tax.

“You have to have skin in the game,” said Schwarzman, 64. “I’m not saying how much people should do. But we should all be part of the system.”

Some of Schwarzman’s capital gains at Blackstone, the world’s largest private-equity firm, are taxed at 15 percent, not the 35 percent top marginal income-tax rate. Attacking the banking system is a mistake because it contributes to “a healthier economy,” he said in the interview.

Paulson, the New York hedge-fund manager who became a billionaire by betting against the U.S. housing market, has also said the rich benefit society.

“The top 1 percent of New Yorkers pay over 40 percent of all income taxes,” Paulson & Co. said in an e-mailed statement on Oct. 11, the day Occupy Wall Street protesters left a mock tax-refund check at its president’s Upper East Side townhouse.

I’ll quote just one more and then you can read the others on your own.

Tom Golisano, billionaire founder of payroll processer Paychex Inc. (PAYX) and a former New York gubernatorial candidate, said in an interview this month that while there are examples of excess, it’s “ridiculous” to blame everyone who is rich.

“If I hear a politician use the term ‘paying your fair share’ one more time, I’m going to vomit,” said Golisano, who turned 70 last month, celebrating the birthday with girlfriend Monica Seles, the former tennis star who won nine Grand Slam singles titles.

There’s an entire rogue’s list of the persecuted 1 percent there along with some eye popping quotes.  I can’t decide if I should close with a reference to the Julio-Claudian period in Rome or the Bourbon monarchy in France.  Do these guys really think their contributions to civilization are all that?  Since when did destroying the savings and home values of most of the country become something to brag about?

Pitchforks or Guillotines?

17 Comments on “Greed is Good Redux”

  1. ralphb's avatar ralphb says:
    December 20, 2011 at 12:46 pm

    This is indefensible, when you’re largely responsible for murdering the economy.

    The top 1 percent of taxpayers in the U.S. made at least $343,927 in 2009, the last year data is available, according to the Internal Revenue Service. While average household income increased 62 percent from 1979 through 2007, the top 1 percent’s more than tripled, an October Congressional Budget Office report showed. As a result, the U.S. had greater income inequality in 2007 than China or Iran, according to the Central Intelligence Agency’s World Factbook.

    Not all affluent Americans are on the defensive. Billionaire Warren Buffett, 81, chairman and CEO of Berkshire Hathaway Inc., has called for increasing taxes on the wealthy, as has Patriotic Millionaires, a group whose supporters include Ask.com co-founder Garrett Gruener and Peter Norvig, director of research at Google Inc., according to its website.

    “Rich businesspeople like me don’t create jobs,” Nick Hanauer, co-founder of aQuantive Inc., an online advertising company he sold to Microsoft Corp. for about $6 billion, wrote in a Dec. 1 Bloomberg View article. “Let’s tax the rich like we once did and use that money to spur growth.”

    Two out of three Americans support raising taxes on households with incomes of at least $250,000, according to a Bloomberg-Washington Post national poll conducted in October.

    • djmm's avatar djmm says:
      December 20, 2011 at 3:16 pm

      They must live in such a complete bubble to think the way they do. Incestuous amplification. Rich people were not stung up from the lampposts during in the Clinton years when tax rates were higher than they are now. In fact, the rich got richer. But some of the good fortune was shared by most in the country back then.

      djmm

  2. boogieman7167's avatar boogieman7167 says:
    December 20, 2011 at 1:26 pm

    OT but it looks like there will be a dem POTUS primary afterall dont know much about this guy
    but he is he did flie flie to run this is a link to his site http://www.darcy2012.com/2011/10/10/darcy-on-the-issues/

  3. dakinikat's avatar dakinikat says:
    December 20, 2011 at 3:07 pm

    http://www.project-syndicate.org/commentary/johnson27/English

    Santa Claus came early this year for four former executives of Washington Mutual (WaMu), a large US bank that failed in fall 2008. The Federal Deposit Insurance Corporation (FDIC) had brought a lawsuit against the four, actions that included taking huge financial risks while “knowing that the real estate market was in a ‘bubble.’” The FDIC sought to recover $900 million, but the executives have just settled for $64 million, almost all of which will be paid by their insurers; their out-of-pockets costs are estimated at just $400,000.

    To be sure, the executives lost their jobs and now must drop claims for additional compensation. But, according to the FDIC, the four still earned more than $95 million from January 2005 through September 2008. So they are walking away with a great deal of cash. This is what happens when financial executives are compensated for “return on equity” unadjusted for risk. The executives get the upside when things go well; when the downside risks materialize, they lose nothing (or close to it).

    At the same time, their actions – and similar actions by other bankers – are directly responsible for both the run-up in housing prices and the damaging collapse that followed. That collapse has impacted non-bankers in many negative ways, including through the loss of more than eight million jobs.

    It is also leading to austerity – taxes are increasing and government spending is falling at the local and state level around the country. A difficult fiscal conversation still lies ahead at the federal level, but cuts and contractions of various types seem likely.

  4. northwestrain's avatar northwestrain says:
    December 20, 2011 at 4:06 pm

    That movie is a classic — because of “Greed is good”.

    Every time a new Wall Street greed is exposed — we probably ask ourselves — can these jerks sink any lower and scam the world for more loot.

    Apparently when it comes to greedy jerks — nothing is beyond their greedy grasp.

  5. Branjor's avatar Branjor says:
    December 20, 2011 at 9:21 pm

    OT: Look at these mass demonstrations of females in Cairo. Holy Hannah!

    http://photogallery.thestar.com/1105018

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