Friday, October 14, 2011

Why Occupy Wall Street?

"Well, a young man ain't got nothing in the world these days," quote from "Young Man Blues," written by Pete Townsend.

This quote turns out as factually true at this particular point in our economic history.

You really have to look at the plethora of presented graphs to get a picture how modern American pirate capitalism has taken money from the middle class and given it to the top 1% of Americans. Although numbing in number, the numbers prove modern corporate capitalism has gone beyond piracy, for pirates at least had a code to live by, to scorched earth raping of every economic resource in our land.

What remains so special about this moving money to top tier of elites continues as their hubris in feeling themselves entitled by divine right to live like kings while unemployment runs rampant in the US of A, ignoring the fact preferential tax treatment of investments and capital gains and tax code loopholes combine to put more money in their pockets rather than their moral superiority.

These people who serve on corporate boards form a seamless web of interlocking corporations and capital interests, what C. Wright Mills called, The Power Elite.  Besides the egregious example of failed Bank of America executives receiving 11 MILLION DOLLARS for stinking at their jobs, we have the egregious example of a failure of an executive, Leo Apotheker, getting 23 MILLION DOLLARS as a going away present after screwing up his stewardship of the company.  He had less than a year leading Hewlett Packard.

Or take the case of former CA US Senate candidate, Meg Whitman, the stingiest billionaire alive, who oversaw a 54% loss in value of Ebay: "But Whitman's early success was not matched later on, when the maturing company faced weakness in its core business and new types of competitive threats. Two actions in particular — the purchase of Skype, the Internet phone service, and a foray into China that ended in defeat — turned out to be major mistakes that helped crush eBay’s stock price and even led to some quarterly losses. From a historic high on December 29, 2004, until March 31, 2008, the day Whitman retired from the company, eBay shares dropped by 54 percent. Over the same period, the Nasdaq technology index, which includes eBay, finished up 4.6 percent.

Even the best CEOs make bad acquisitions. What’s notable about Whitman’s career at eBay, however, is how her record cleaves into two neat parts: She did well during the company's go-go growth stage, but much less well as the company became large and mature. The state of California, of course, is likely more analogous to the latter than the former." emphasis added

Ebay overvalued Skype by 900 MILLION Dollars, "In October, eBay announced it would take a $900 million write-down in the value of telecommunications division Skype. That charge, for what accountants call impairment, essentially acknowledged that eBay executives drastically overvalued the $2.6 billion Skype acquisition, completed in October 2005."

She made 1.3 BILLION DOLLARS off Ebay for costing the company half th value: "Hell, Meg even has a Borat son named Griffin, who’s been accused of rape, racism, and violence — and just like a Kazakh oligarch, Meg Whitman bought her son’s way into Princeton by “donating” $30 million just when Griff was applying to school there. That $30 million so graciously donated to Princeton — which, you know, when all’s said and done, no one in American needed that $30 million like the desperate Slumdog Millionaires of Princeton — and that $30 million went to constructing a brand new 500-student dormitory at Princeton named after Whitman. See, she kinda had to do that because he had already been booted out of two expensive prep schools as a kid. You know, what would Meg have done with a son like that if she hadn’t soaked eBay of $1.3 billion?" emphasis added,

Great Adam Smith's ghost, when did the invisble hand of the markeet change to include a fist on the scale rather than just a thumb so abject failure gets rewarded handsomely?

Middle class people know this.

Even though they may not know the numbers of the charts, they know the numbers of so many adult children moving in with their parents, the number of empty and foreclosed upon homes on their block, in the record numbers of children going hungry or undernourished.

Those numbers explain why Occupy Wall Street has become Occupy Everywhere.

You gotta love synchronicity coming with rerun of Big Valley 1966 episode, "The Midas Man." From IMDB: "Audra falls for a shrewd financier who has come to the Valley to capitalize on a drought that has left most of the ranchers in need of loans.When he is about to foreclose and seize the land used as collateral,the ranchers blame the Barkley's-Audra offers herself as a "sacrifice" to hold off the financier. Written by Anonymous"

You see, this has all happened before; history shows us examples of investment bubble after bubble after failure and fraud, from the housing bubble to the internet boom and bust to the savings and loan crisis back through recorded human history.

Absent governemnt regulation like Glass Steagall Act, we will hae burst bubbles one after another.

The United States of America ought to once more regulate financial industries.

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