You know we’re in a recovery, right? Just ask the CEO’s of multinational corporations meeting at the annual meeting of elite business, economic and government leaders in Davos, Switzerland. They’ll tell you everything is going to be just jake this year:
Chief executives are confident the world has averted a prolonged recession but are concerned that government regulators may slow the pace of economic recovery, according to a survey released Wednesday.
Over four in five company heads worldwide are optimistic about business conditions over the next year, according to the survey by PriceWaterhouseCoopers. CEOs pessimistic about growth prospects dropped in half to 18 percent, while the very optimistic rose to 31 percent.
Yes, curse those damn government regulators. We all know how much trouble they caused. Why if those meddling bureaucrats hadn’t been around to muck things up I’m sure the mortgage backed derivatives bubble Wall Street rode to great success in the early part of the last decade never would have burst bringing the world to the brink of a Depression.
“CEOs were very clear about the threat of over-regulation,” according to PriceWaterhouseCoopers, which interviewed 1,198 heads in 52 countries over the last four months. “They also opposed government ownership in the private sector even in the worst of times. Nearly half agreed that government ownership helps to stabilize an industry during a crisis.”
Still some CEO’s grudgingly admit that financial help from the world’s governments wasn’t totally unappreciated:
Banking and automobile chiefs were among those most appreciative of government help.
Now there’s a shocker for you. Of course if my job (and industry) had been saved by a government bailout, or I was receiving part of some of the billions of dollars or bonuses Wall Street firms are paying themselves this year, I might admit to being mildly appreciative too.
Together, the six biggest U.S. banks are on pace to pay US$150 billion in total compensation for 2009, slightly less than the record US$164 billion in 2007 before the financial crisis struck, according to the New York state comptroller’s office.
ONE HUNDRED & SIXTY FOUR BILLION DOLLARS (if I was getting any of it myself)might even color my judgment regarding the wonders of unfettered capitalism and the ability of the free market to make everything come out all right in the end, at least for the right sort of people. I’d be out on the streets clamoring about of our economic recovery, too, and warning the government to keep its paws off my money.
Jamie Dimon, chief executive of JPMorgan Chase has been aggressively lobbying in London and in the U.S. against any new taxes. He said blithely that “using tax policy to punish people is a bad idea. All businesses tend to pass their costs on to customers.”
Ah yes, customers. I wonder to whom Jamie Dimon was referring? I’ll bet it wasn’t these folks who just might have a more jaundiced view of the Miracle on Wall Street right now:
Verizon (VZ, Fortune 500) CEO Ivan Seidenberg said on the company’s quarterly earnings call Tuesday that it will slash about 13,000 positions in 2010. The telecom giant previously cut 13,000 jobs from its landline business in 2008 and another 13,000 again in 2009.
Gosh in three years that’s 39,000 jobs from just one mega corporation. I wonder if those poor unemployed people deadbeats are grateful for all that Wall Street has done for them? Somehow, I doubt it.
But who cares about the hoi polloi and their little problems? Not US Treasury Secretary Timothy Geithner and former US Treasury Secretary Henry Paulson. They see the BIG PICTURE (unlike so many of us ill mannered bloggers) and the big picture says that saving financial institutions that nearly destroyed the world’s economy is much, much more important than the job prospects of a bunch of disgruntled former employees:
U.S. Treasury Secretary Timothy Geithner denied any role in disclosures about American International Group’s payments to banks and defended his decisions as New York Federal Reserve chief to pay full price to retire AIG credit default swaps. […]
Henry Paulson, Geithner’s predecessor at the Treasury, will will tell the panel that he, Geithner and Fed Chairman Ben Bernanke “acted properly” in rescuing AIG, according to testimony released on Tuesday.
“If AIG collapsed, it would have buckled our financial system and wrought economic havoc on the lives of millions of our citizens,” Paulson said in the prepared remarks.
Yes, if AIG had collapsed and it would have cost firms like Goldman Sachs billions of dollars, dollars they now have to pay bonuses thanks to the secret agreement by the New York Federal Reserve Bank (under Geithner’s firm, steady leadership hand) to pay certain firms, such as Goldman, full price for the more or less worthless derivatives they had purchased from AIG.
The New York Fed’s decision to pay the banks in full cost AIG — and thus American taxpayers — at least $13 billion. That’s 40 percent of the $32.5 billion AIG paid to retire the swaps. Under the agreement, the government and its taxpayers became owners of the dubious CDOs, whose face value was $62 billion and for which AIG paid the market price of $29.6 billion. The CDOs were shunted into a Fed-run entity called Maiden Lane III. […]
The deal contributed to the more than $14 billion that over 18 months was handed to Goldman Sachs, whose former chairman, Stephen Friedman, was chairman of the board of directors of the New York Fed when the decision was made. Friedman, 71, resigned in May, days after it was disclosed by the Wall Street Journal that he had bought more than 50,000 shares of Goldman Sachs stock following the takeover of AIG. He declined to comment for this article.
So really, stop worrying little people. The big boys on Wall Street and in Washington will take care of everything. They always do.
And really, what are a sorrows of a few million unemployed people (many without health care) compared to Stephen Friedman’s right to make a killing by using insider information to buy shares in Goldman Sachs? If Tim Geithner didn’t think it was worth distracting our beautiful minds with such complicated details of the government’s bailout of the banks, that’s good enough for me.
Addendum: Is there any justification whatsoever to keep Geithner on as Obama’s Treasury Secretary? No matter how you look at it, whether from an economic or political or legal or ethical standpoint, the man is toxic waste. He should be fired (and his little dog Larry Summers, too) before he can do any more damage to Obama’s presidency and the general welfare of “We, the People of the United States.”
