Twice in the last week friends asked me if I were optimistic about the economy. Do they think my degree in economics and a career as a business journalist qualifies me to know more than, say, the pinheads at Standard & Poors who made a $2 trillion mistake when calculating their assessment of the credit worthiness of the United States? Do they think I know more than the complicit bean counters at S&P who valued Lehman Bros. AAA worthy even as it imploded and who gave favorable reviews to toxic mortgage-backed securities at the heart of the financial freefall of the last few years?
I’d like to say I responded with a positive take on the economy. But I would be as guilty as those fabricators at S&P who have done more to ruin our economy than a dozen Bernie Madoffs could. Yet even in their obfuscations there is a kernel of truth—there is little to be confident about the will or power of our elected officials to bring a sane, rational approach to a resolution of our financial crisis.
I’m perplexed about several parts of this unfolding story.
First, does S&P believe we need a balanced approach to setting a national budget? Does it believe only more program cuts are required, or are higher taxes on the rich and closing corporate and personal loopholes necessary as well?
Second, several interviews portrayed ordinary citizens understandably lamenting the debt ceiling deal. But in the same breadth they said they wouldn’t favor higher taxes, as desired by President Obama and the Democratic leadership. Do they not understand taxes would have gone up just for those households making more than $250,000? Have Republicans so brainwashed the common folk they believe their taxes would go up?
Third, given we live in a global economy where it is generally cheaper to manufacture in Third World countries than here in America, how long will it take for our citizenry to comprehend we are not going back to the time when the United States was the foundry of the universe. Think of most consumer products, from iPhones to digital cameras, from Christian Louboutin shoes to Nike cross trainers—they’re not made in America. During the last century we shifted from an agricultural to a manufacturing economy. Now we’re a service and information economy. Yes, there are remnants of our production prowess. But most new jobs will require the ability to say “would you like fries with that” or will rely on one’s skill to create platforms that aggregate consumers into marketable segments (at least those who retain enough money to spend on discretionary items). Or you will need to be part of the financial community that doesn’t produce an ounce of goods but earns dollars by the pound based on an ability to jimmy-up trades and market fluctuations (case in point: oil speculators with no tangible assets in the energy business who have driven up the price of gasoline and home heating oil).
Fourth, if Republicans are interested in putting Americans back to work, why don’t they push for legislation to benefit companies that hire more U.S. workers and tax those that outsource jobs?
Fifth, how can anyone see value in a bifurcated society? It wasn’t good when we discriminated based on color, or ethnicity, or sex. Yet our leaders are letting us devolve into a nation of haves and have-nots. Riots like in London, as well as the Arab Spring revolts, are demonstrations of the hopeless and destitute seeking relief against the accumulation of wealth in an elite. Verizon land-line workers are on strike. Even if you believe the company that the average Verizon workers makes $150,000 in salary and benefits, it is 120 times less than the $18.1 million compensation of the company’s CEO last year. It’s an obscene differential. Ivan Seidenberg makes $50,000 a day, every day of the year. Is his three-day compensation equal to an average worker’s full year? It’s not as if he invented a new form of communication, or discovered the cure for cancer, or helped solve world hunger. His job is to run a profitable company, even if it means squeezing his employees to pay more for health care coverage and their retirement plans. I’m not advocating wealth redistribution, but there really should be a limit on corporate compensation.
Showing posts with label Standard and Poors. Show all posts
Showing posts with label Standard and Poors. Show all posts
Tuesday, August 9, 2011
Thursday, August 4, 2011
Playing Catch-up
Turns out my personal swimming instructor/friend Ken (aka Don Quixote and Sancho Panza) actually was a swimming instructor at a summer camp in his youth. Since he’s older than I, take it from me it was a loooong time ago. But we got through the first lesson without either us losing anything, Ken his cool, me my life. Weather permitting, we’re scheduled for another frolic in his pool on Friday.
Gee-Ka: That’s the way grandson Finley pronounces grandpa, so I guess Gee-Ka will be my nickname going forward. Finley had it much easier saying Gee-Gee for Grandma Gilda.
Finley & Co. (Allison and Dan) visited last weekend so his parents could attend their first game at the new Yankee Stadium on his mother’s birthday (Yanks won). Hard to find a better age to babysit than a 20-month-old who eats well, lays down to nap without fuss, laughs a lot, doesn’t poop too much, always startles you with new words he can vocalize, and pretty much understands everything you say to him. Even when I mistakenly shortened his nap time it afforded us one of the more pleasurable experiences of the weekend—cuddling in our bed with him for about 20 minutes.
Credit Rating Fake-out? The NY Times implied Wednesday it would be no big deal if the credit rating of the United States dipped from AAA to AA, or even lower. Noting that most corporations long ago abandoned the quest for triple-A ratings with hardly a misstep, the article suggested only national pride and a possible blow to consumer confidence would be at risk (http://www.nytimes.com/2011/08/03/business/aaa-rating-is-a-rarity-in-business.html?scp=2&sq=eric%20dash&st=cse).
So was this whole debt ceiling pas-de-deux debate (okay, a pas-de-trois, if you count the Tea Party) really a sham, just political posturing? Could be, except the deal struck is not good news for those in need of government support, people like the long-term unemployed.
What’s also exasperating in this whole scenario is the three major credit rating agencies—Fitch, Standard & Poors and Moody’s—are the very same organizations that green-lighted all those hazardous derivative bonds that contributed to the financial failures of the last few years, precipitating the recession which shuttered businesses, reduced employment and cut tax revenues causing our national debt to skyrocket. These rating agencies did not suffer. How ironic that today they pass judgment on U.S. credit worthiness.
Jewish Humor: We might not be exposed to it frequently, but Arabs have a keen sense of humor, I’ve heard. They’re even developing stand-up comedians, according to a recent NPR segment.
Strangely, some of the comedians choose to compare themselves to American comics. One calls himself the Jon Stewart of the Middle East. Another refers to himself as the Jerry Seinfeld of the Middle East.
How comforting to know the Arab world appreciates American humorists. But do they also realize these comedians are Jewish?
Burned by Burnett: The NY Yankees should end the charade of contemplating a six-man pitching rotation by dumping A.J. Burnett. Add him to the scrapheap of failed free agent pitcher signings. He’ll fit snugly alongside Kevin Brown, Kenny Rogers, Carl Pavano, Jaret Wright, Javier Vazquez, Ed Whitson, Hideki Irabu and Kei Igawa.
Time to concentrate on developing Ivan Nova and Phil Hughes and other prospects. After last night’s outing in Chicago against the light-hitting White Sox, when the Yanks scored 13 runs in the first four innings, only to see him give up seven before being relieved with one out in the fourth, Burnett continues to show he is unreliable.
Though his stuff (for those non baseball-literate readers, “stuff” is a term used to connote the quality of a pitcher’s pitches) can be electric, more often than not since becoming a Yankee he has shocked his team and its fan base with inconsistency and disappointment. He hasn’t won a game since June 29.
Better to admit Burnett can’t pitch for New York and work a deal to dispatch him to another team, even if the Yankees have to pay his bloated salary.
Gee-Ka: That’s the way grandson Finley pronounces grandpa, so I guess Gee-Ka will be my nickname going forward. Finley had it much easier saying Gee-Gee for Grandma Gilda.
Finley & Co. (Allison and Dan) visited last weekend so his parents could attend their first game at the new Yankee Stadium on his mother’s birthday (Yanks won). Hard to find a better age to babysit than a 20-month-old who eats well, lays down to nap without fuss, laughs a lot, doesn’t poop too much, always startles you with new words he can vocalize, and pretty much understands everything you say to him. Even when I mistakenly shortened his nap time it afforded us one of the more pleasurable experiences of the weekend—cuddling in our bed with him for about 20 minutes.
Credit Rating Fake-out? The NY Times implied Wednesday it would be no big deal if the credit rating of the United States dipped from AAA to AA, or even lower. Noting that most corporations long ago abandoned the quest for triple-A ratings with hardly a misstep, the article suggested only national pride and a possible blow to consumer confidence would be at risk (http://www.nytimes.com/2011/08/03/business/aaa-rating-is-a-rarity-in-business.html?scp=2&sq=eric%20dash&st=cse).
So was this whole debt ceiling pas-de-deux debate (okay, a pas-de-trois, if you count the Tea Party) really a sham, just political posturing? Could be, except the deal struck is not good news for those in need of government support, people like the long-term unemployed.
What’s also exasperating in this whole scenario is the three major credit rating agencies—Fitch, Standard & Poors and Moody’s—are the very same organizations that green-lighted all those hazardous derivative bonds that contributed to the financial failures of the last few years, precipitating the recession which shuttered businesses, reduced employment and cut tax revenues causing our national debt to skyrocket. These rating agencies did not suffer. How ironic that today they pass judgment on U.S. credit worthiness.
Jewish Humor: We might not be exposed to it frequently, but Arabs have a keen sense of humor, I’ve heard. They’re even developing stand-up comedians, according to a recent NPR segment.
Strangely, some of the comedians choose to compare themselves to American comics. One calls himself the Jon Stewart of the Middle East. Another refers to himself as the Jerry Seinfeld of the Middle East.
How comforting to know the Arab world appreciates American humorists. But do they also realize these comedians are Jewish?
Burned by Burnett: The NY Yankees should end the charade of contemplating a six-man pitching rotation by dumping A.J. Burnett. Add him to the scrapheap of failed free agent pitcher signings. He’ll fit snugly alongside Kevin Brown, Kenny Rogers, Carl Pavano, Jaret Wright, Javier Vazquez, Ed Whitson, Hideki Irabu and Kei Igawa.
Time to concentrate on developing Ivan Nova and Phil Hughes and other prospects. After last night’s outing in Chicago against the light-hitting White Sox, when the Yanks scored 13 runs in the first four innings, only to see him give up seven before being relieved with one out in the fourth, Burnett continues to show he is unreliable.
Though his stuff (for those non baseball-literate readers, “stuff” is a term used to connote the quality of a pitcher’s pitches) can be electric, more often than not since becoming a Yankee he has shocked his team and its fan base with inconsistency and disappointment. He hasn’t won a game since June 29.
Better to admit Burnett can’t pitch for New York and work a deal to dispatch him to another team, even if the Yankees have to pay his bloated salary.
Wednesday, January 5, 2011
Inside Job, Twerp Alert, Happy Birthday
Gollum Crazy: I try to avoid depressing movies, excellent reviews notwithstanding.
Inside Job received excellent reviews. It is a documentary about the financial meltdown crisis. I went to see it yesterday while Gilda was at work. I am now depressed.
I’m not depressed because my savings were ravaged in the stock market fallout (they weren’t). I’m not depressed because my mortgage is higher than the value of my home (the mortgage was already paid off). I’m not depressed I lost my job because of the lousy economy (actually, the economy was a contributing factor to my “retirement,” but I’m happy to be retired).
I’m depressed because in the face of overwhelming evidence to the contrary, the vultures on Wall Street continue to believe they did no wrong and are just as powerful as before to screw our country and the rest of the world. I wonder how these people can sleep at night. Then I realize it must be easy to nod off into dreamland on a mattress stuffed with our dollar bills, make that our thousand dollar bills. Our system of finance rewards incompetence and chicanery. We have a system wherein credit rating companies (e.g., Moody’s, Fitch and Standard & Poors) are not accountable, hiding behind the argument their work is just “opinion,” therefore should not be construed as an endorsement of a company’s solvency. In other words, investor beware. Days before Lehman Brothers imploded, they still were issuing AAA ratings for its bonds.
Deregulation opened the gateway for financial excess and distress. Yet Wall Street and the banking community resist oversight. Republicans as well as Democrats share the guilt of blind acquiescence. Economists at prestigious universities have been co-opted by the lure of big bucks from financial institutions. Deregulation intensified a culture of greed and envy. Gross compensation (reportedly a record $144 billion in 2010) turned everyone into crazed Gollums, whose only thoughts are for “precious” bonuses to buy more, more, more that are “mine, mine, mine.”
It’s too painful to recount all the details. Go see Inside Job. You won’t be happy when you exit the theater, but you’ll be more informed.
Twerp Alert: Gilda is on a crusade, a jihad against twerps, who she defines as short, inconsiderate, measly-faced, well-tailored commuters who refuse to clean up after themselves.
On Metro North Tuesday morning she encountered a twerp who threw his discarded newspaper on the floor and refused to pick it up when the train reached Grand Central Terminal even after she and others admonished him and advised a newspaper receptacle stood right outside the door on the platform. Once before Gilda had remonstrated against this twerp, telling him it was not the conductor’s job to clean up after him. He’s apparently a slow learner, someone who believes he’s above participating in train car housekeeping, though he no doubt wants a clean environment during his commute.
Sounds to me like another one of those “entitlement” guys who got us into the financial mess we’re still in.
Happy Birthday: My father was a successful businessman. He sent his children to private schools, graduate schools, sleep-away summer camps, trips abroad. His one vice was buying a new car every five years. He bought Buicks all but the one time our mother talked him into a Cadillac. He was not stingy, not profligate. He provided for his family, friends and workers. He was charitable with his time and money for causes he believed in. He would have turned 100 today.
Inside Job received excellent reviews. It is a documentary about the financial meltdown crisis. I went to see it yesterday while Gilda was at work. I am now depressed.
I’m not depressed because my savings were ravaged in the stock market fallout (they weren’t). I’m not depressed because my mortgage is higher than the value of my home (the mortgage was already paid off). I’m not depressed I lost my job because of the lousy economy (actually, the economy was a contributing factor to my “retirement,” but I’m happy to be retired).
I’m depressed because in the face of overwhelming evidence to the contrary, the vultures on Wall Street continue to believe they did no wrong and are just as powerful as before to screw our country and the rest of the world. I wonder how these people can sleep at night. Then I realize it must be easy to nod off into dreamland on a mattress stuffed with our dollar bills, make that our thousand dollar bills. Our system of finance rewards incompetence and chicanery. We have a system wherein credit rating companies (e.g., Moody’s, Fitch and Standard & Poors) are not accountable, hiding behind the argument their work is just “opinion,” therefore should not be construed as an endorsement of a company’s solvency. In other words, investor beware. Days before Lehman Brothers imploded, they still were issuing AAA ratings for its bonds.
Deregulation opened the gateway for financial excess and distress. Yet Wall Street and the banking community resist oversight. Republicans as well as Democrats share the guilt of blind acquiescence. Economists at prestigious universities have been co-opted by the lure of big bucks from financial institutions. Deregulation intensified a culture of greed and envy. Gross compensation (reportedly a record $144 billion in 2010) turned everyone into crazed Gollums, whose only thoughts are for “precious” bonuses to buy more, more, more that are “mine, mine, mine.”
It’s too painful to recount all the details. Go see Inside Job. You won’t be happy when you exit the theater, but you’ll be more informed.
Twerp Alert: Gilda is on a crusade, a jihad against twerps, who she defines as short, inconsiderate, measly-faced, well-tailored commuters who refuse to clean up after themselves.
On Metro North Tuesday morning she encountered a twerp who threw his discarded newspaper on the floor and refused to pick it up when the train reached Grand Central Terminal even after she and others admonished him and advised a newspaper receptacle stood right outside the door on the platform. Once before Gilda had remonstrated against this twerp, telling him it was not the conductor’s job to clean up after him. He’s apparently a slow learner, someone who believes he’s above participating in train car housekeeping, though he no doubt wants a clean environment during his commute.
Sounds to me like another one of those “entitlement” guys who got us into the financial mess we’re still in.
Happy Birthday: My father was a successful businessman. He sent his children to private schools, graduate schools, sleep-away summer camps, trips abroad. His one vice was buying a new car every five years. He bought Buicks all but the one time our mother talked him into a Cadillac. He was not stingy, not profligate. He provided for his family, friends and workers. He was charitable with his time and money for causes he believed in. He would have turned 100 today.
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