(Community Matters) I’m not at all happy that the agreed upon solution to the locked credit markets and financial system reform appears to be a program that will make so many investors so much damn money. With 85% nonrecourse notes – all upside, no downside – you can bet your panties that some folks are going to get rich, rich, rich from the workout of these assets, others richer, richer and richer. The equal equity split for taxpayers sounds terrific, though no doubt provision for management and other fees which will trim margins before calculation of profits to be shared.
I have NO PROBLEM with folks getting rich – quite the opposite – however, this rich (like the extraordinary 7, 8, even 9 figure bonuses paid during the last 7 years to financial executives on phantom profits) will come from the hundreds of billions, possibly trillions, taxpayers are spending to bail out the system.
And, I trust this is the best system we are able to come up with. The motivation of returns, the fairness of auctions for these assets, and the extraordinary government financing must be what it takes to prevent further meltdown and a recession from becoming another great depression. I know President Obama wouldn’t allow these terms otherwise. And, if he even edged toward faltering, I know Michelle would set him back on the straight and narrow. Gotta trust that what’s being proposed is the best deal we’re able to strike to prevent unprecedented pain and suffering.
I wouldn’t oppose the death penalty in cases of collusion in bidding. I’m mostly joking about death penalty though believe the building anger is a serious threat. Let’s see how well BHO does in quelling this. A study conducted in the 60s (I believe by Harvard & Cambridge) found that most American’s didn’t begrudge the economic chasm between rich & poor since they believed their children had a fair chance of participating in the better life. Since the internet boom, I’ve been concerned about the tenuousness of this optimism and what this might mean for our society.
Community Matters 