Richie Rich

Picked up "The Ultra Rich: How Much Is Too Much?" by Vance Packard – published in 1989. In my life that doesn't seem so far back, but in the modern history of U.S. wealth, it appears to be ancient history. He writes about the years just after Forbes Magazine started publishing their annual "Richest 400 Americans."

In 1982, there were 14 U.S. billionaires and five years later there were 49. I see that in this year's list, every single one of the richest 400 Americans had at least 1.3 billion dollars.

Packard writes that in 1983, the Joint Economic Committee of Congress did a study that estimated the top 1% of wealthy Americans had 34% of all the wealth. That meant one out of every 100 people feast on one third of the pie. It's closer to 43% of the pie when you subtract the value of people's homes and just look at their other wealth. The good news is that ratio has stayed relatively stable these 25 years, but it's so incredibly disproportionate to begin with.

In 1987, the Forbes #1 was Sam Walton of Wal-Mart with an estimated 8.7 billion. In the 2011 Forbes list the Walton wealth has passed on to the Walton "children" and their collective wealth is $90 Billion Dollars. An increase of 81 billion dollars in 24 years! Packard quotes billionaire, Edgar Bronfman, "To turn $100 into $110 is work. To turn $100 million into $110 million is inevitable."

In 2010, the combined wealth of the Forbes 400 was 1.27 TRILLION dollars. That's more than the combined wealth of the lower 60% of Americans ($1.22 trillion for the lower 60%, according to a March 2010 study by Edward Wolff, an economist at New York University). My guess is that most Americans would be shocked to know that the lower 40% of U.S. citizens - 120 million people - account for only 3/10's of one percent of the country's wealth. (Source: Norton & Ariely, 2010.)

According to Forbes, nearly half of the 45 new members in the 2011 class, made their fortunes in hedge funds and private equity. I still can't fathom how much harder they work than a passionate high school teacher, or a doctor in an emergency room, to merit all that reward.

Serpico and Social Change Recipe

The great movie director, Sidney Lumet, died a couple of days ago. I remember how inspired I felt after seeing "Serpico", the story of a cop who refuses to go along with the corruption in the department, suffering heavy consequences along the way to a total reformation of the NYPD. I remember calling my favorite professor to recommend the movie to him. (I was a senior at UCSB.) He was unimpressed and said it was typical of Hollywood to write stories of change as though only one heroic person made it happen. He taught a class in "social movements" and was definitely a scholar on institutional change. Leaders on the left (and probably the right too) have always emphasized the importance of organizing and setting up an infrastructure to catalyze and shape change. They would point out that you can have a Martin Luther King Jr. but without the Southern Leadership Conference and Student Nonviolent Coordinating Committee you don't get a civil rights movement.

A couple of blogs back, I wondered what the secret ingredient is in all the social upheavals going on since February throughout the Middle East. Some folks rightly pointed out that Facebook and social media online is what made the demonstrations go viral. Others pointed out that with very high youth unemployment and highly repressive governments, that the boiling point was finally reached. It does appear however, that the one Tunisian man who immolated himself in protest, was way more the catalyst for what happened in the streets, than any organized opposition organizations.

I think that individual heroes, Internet communications vehicles, a shared social/political frustration, and even opposition organizations all work in concert, but most people have to feel there's a large scale happening underway - before getting involved. Somehow, the risks of getting tear-gassed, arrested, or shot are acceptable if people feel there's a mass movement going on. For many, it may be the draw of the "happening" itself. (I think that dynamic was at play when I think back to our student anti-war demonstrations at Northwestern.)

People will live, beaten down for many years and decades, even knowing there are some people protesting - and getting arrested - maybe tortured - for doing so. When the idea takes hold that there is really going to be a mass uprising, then suddenly thousands can turn out in the street and a movement is underway. I'm still unclear how that perfect storm occurs.

There's another thing my professor said that I haven't forgotten. He was one of the earliest members of Students for a Democratic Society. He traveled to a national convention after reading a number of articles by Tom Hayden who wrote about a mass movement growing quickly at campuses throughout the country. When my professor got to the meeting, much to his surprise, there were only a few dozen people there. Apparently, Hayden was writing the articles with smoke and mirrors in order to help get a movement started. Maybe that's another essential ingredient in the mix.

What do you think is still missing from the recipe?

Flawless Bat Mitzvah

We were so proud of Viva Rose on her Bat Mitzvah this weekend. She led the Hebrew prayers, then sang the Torah portion, and gave a speech. It was one of those Torah portions that highlights the worst of the ancient texts and the Orthodox who still adhere to them as eternal truths. Viva's chapter dealt with the impurities of women during their menstrual cycle and after they give birth. According to the bible verses when women gave birth to a girl they had a double-shot of impurity and and had to bring a bigger sacrifice to the priests. Viva spoke out forcefully against those old standards and drew parallels to how women were forbidden from holding prayer minyans at the Western Wall until recently after much struggle and after a Supreme Court decision initially upheld the Orthodox restrictions.

It makes me wonder how long Viva will stick with a religion that has such sexism and intolerance built into its sacred texts - still read out in synagogues today. I remember my own decision to walk away over 40 years ago after struggling with it during my years in a Yeshiva high school (seminary).

On the other hand the Reform service had a lot of beautiful prayers and songs, led by a very dynamic, high energy Rabbi and cantor - both women. The congregation imparted a sense of community and acceptance. Indeed, Viva is the child of two Moms and the other Bat Mitzvah girl (it was a double Bat Mitzvah) was the daughter of an Asian Mom and Jewish born Dad. The congregation demonstrates that it's possible to make a meaningful service and sustain a loving, spiritual community, even while acknowledging dated, flawed texts. It doesn't have to be all or nothing as the Orthodox would have it as well as many of us "Orthodox refugees."

State of Emergency repression

The San Francisco Chronicle (3/24) reported in the wake of popular demonstrations in Syria – initially met by army gunfire, that "the all-powerful Baath party would study ending a state of emergency that it put in place after taking power in 1963."

That's an astounding 48 years! And now there willing to "study" it??! Although a state of emergency is often declared after a natural disaster, a number of countries like Syria use it to quash dissent and target particular groups. The article said that Syria's state of emergency "allows people to be arrested without warrants and imprisoned without trial. It goes on to say that there are detention centers known for torture, that hold prisoners for many years without trials.

It made me wonder how many other countries have imposed this type of "state of emergency" or outright martial law on their own citizens for long periods of time. Below are the infamous record-holders as I was able to glean from Wikipedia. I don't know how many of the countries actively used their extra-judicial powers on a regular basis to contain dissent, but if I'm a citizen in any of these countries, I'd prefer these arbitrary powers be taken off the books.

I hope that in Tunisia, Egypt, Algeria, Libya, Bahrain, etc. a shift toward democracy actually succeeds, but even an end to these "states of emergency" will be an important step forward. Notably, since the demonstrations began in February, there are new "states of emergency" in Yemen, Bahrain, and Tunisia.

Israel - 63 years (since the War of Independence; not including martial law in the occupied areas)
Egypt - 44 years 1967 - 2011 (with an 18 month break)
Taiwan - 39 years 1948 - 1987
Turkey - 24 years 1978 - 2002
Algeria - 19 years 1992 - 2011
Pakistan -11 years 1977 - 1988 (and working on a new one begun in 2007)
Phillipines -9 years 1972 - 1981 (under Marcos)

"Why Isn't Wall Street In Jail"

A very good article in Rolling Stone, March 3rd issue, about how only one person (Bernie Madoff) is serving any jail time after the Wall Street meltdown fueled by the greed and deception of so many huge firms. For the most part, the very wealthy execs at Goldman Sachs, Citigroup, AIG, Lehman Brothers, Merrill Lynch, Bank of America, WAMU, and JP Morgan Chase, got off scott-free, though a few fines were levied. For example two execs at Goldman Sachs were fined a total of $180K, a small fraction of their bonuses for even one year. The article documents the cozy, ongoing relationship between regulators and Wall Street.

Here's a quote from the piece by Matt Taibbi:
"In the past few years the administration has allocated massive amounts of federal resources to catching wrongdoers - of a certain type. Last year, the government deported 393,000 people.......So there you have it. Illegal immigrants: 393,000...Bankers: zero. The math makes sense only because the politics are so obvious. You want to win elections, you bang on the jailable class. You build prisons and fill them with people for selling dime bags and stealing CD players. But for stealing a billion dollars? For fraud that puts a million people into foreclosure? Pass. It's not a crime....let's just give them a piece of paper with a government stamp on it, officially clearing them of the need to apologize, and make them pay a fine instead. But don't make them pay it out of their own pockets, and don't ask them to give back the money they stole. In fact, let them profit from their collective crimes to the tune of a record $135 billion in pay and benefits last year."

Egypt; Secret Ingredient for Mass Uprising

photo by Floris Van Cauwelaert


What is the magic elixir that transforms a whole nation of people into social activists, risking life and limb to oust a government? How does it work that in one week's time a whole country can fundamentally change itself after decades of seeming complacency? All eyes are on what's happening in Egypt right now, but we've seen it happen just before in Tunisia and years ago throughout Eastern Europe, and in the Phillipines. It almost succeeded in Thailand recently, and in Iran.

I'm sure that in all these places, for many years, there were opposition parties that spoke out as they could, recruited members, held demonstrations, published writings, and had some leaders imprisoned or even killed. But why did they have so little impact and how can it all happen in an instant like a match to gasoline? As though it were waiting to explode. As though everyone was a government watchdog all along. But what is the spark that sets everything in motion? Is there any connection at all between the years of opposition activities or speeches and writings and the sudden mass uprisings we are witnessing today in Egypt and in the aforementioned countries?

Did these massive protests in Egypt and Tunisia - literally spark from the young, unemployed Tunisian who immolated himself? Were there not other publicized tragedies before? Certainly the conditions of widespread poverty and the unfair divisions between rich and poor, the corrupt government officials - were there for years. Is the spark from a rash of sudden price increases or government subsidy pullbacks? What is it?

I'm sure there are thousands of dissidents and activists fighting for change and justice, in many corners of the globe, scratching their heads and wondering what the secret ingredient is in Egypt this week, that is usually missing from civic recipes for decades at a time.

Dream Act, Dream On

Passage of the Dream Act looks bleak for the forseeable future, given the influx of Republican congress reps. It would allow about 2 million "illegal" immigrants to become citizens if they came to the U.S. before they were 16 & they finish college or military service before they are 35.

There are many in Congress who feel that our country is flooded with poor people from other countries who are taking scarce jobs from U.S. workers. They want these people out. They want more secure borders. They want to cut off any health or education to discourage them from coming.

How many of these representatives voted against measures that allow U.S. corporations to move their operations to other countries where the labor is cheaper? When corporations move operations to cheap labor countries it's called "outsourcing", and often includes tax loopholes, but when people from poor countries come to the U.S. to get work, it's never called "in-sourcing." They are "aliens."

For me, outsourcing would be acceptable if environmental standards were upheld and labor was paid fairly (not usually the case). I just think a lot of elected officials speak with "forked tongues."

Whitman Proposal to Resolve Illegal Immigration

California gubernatorial candidate Meg Whitman unveiled a bold proposal today to stop the flow of illegal immigrants from Mexico and other Latin American countries. At a press conference in the Silicon Valley, the former CEO of EBAY said she would work with major employers throughout the high tech industry to outsource over a million jobs south of the border.

Whitman, who has considerable experience in both layoff-management and outsourcing is bringing together her skills and vision to create a California with considerably less traffic congestion on its freeways, less smog, and far fewer illegal immigrants. Critics have pointed to a huge hike in unemployment benefit costs that will impact the state, but Whitman points out that she will keep those benefits lean and temporary. Unemployed workers are more likely to leave the state, or fill the many gardener, housekeeper, restaurant, and nanny openings when "the illegals" hurry home to scoop up the high tech assembly jobs.

Wall Street is already showing a favorable response to the Whitman Plan that promises profits and lowered costs for key corporations.

Undercover Boss

I've begun to watch one new TV show.....a Reality show called "Undercover Boss" on CBS. It features a CEO of a big corporation who goes "undercover" for a week and works alongside his (or her) employees in the field. I watched the CEO of 7-Eleven working in a store, trucking in night deliveries to stores, and doing a stint in the 7-Eleven bakery. I also watched the CEO of Direct TV do a warehouse stint, train as a tech and an installer, and take a shift at a tech support call center. In every situation, the CEO can barely keep up, let alone accomplish the tasks at hand. The employee-trainers are incredibly patient and very skilled at what they do. Usually, at some point they share some facts about their lives in a matter-of-fact, good-natured way. You find out that one goes to dialysis after her incredibly productive shifts as a 7-Eleven store manager. A Direct TV warehouseman has half his vertebrae fused together. Another is a youth pastor. Another is an artist. Two go to school after their full time hours. At the end of the week, the CEO goes back to his boardroom and speaks briefly with the other suits about his time in the field. Then he summons the employees that he worked with and heaps on praise and some meaningful gifts.

It's a feel-good show, and so far, even the CEO's have been more than decent folks. However, the message that comes through loud and clear to me is that there is no way in the world to justify a CEO salary that is more than ten times above his/her people in the field. There's just no way you can rationalize that the CEO's hours in meetings, studying spreadsheets, and making macro decisions are ten or twenty times more grueling or exacting or conscientious than the hours spent by those who do the daily work of the company.

When Ben and Jerry's was owned by Ben and Jerry, they had a rule that nobody in the company would be paid more than seven times what anyone else in the company made. In 2004, more than half of the CEO's of the top 50 U.S. corporations earned at least 104 times what their average employee earned (not their lowest paid employee), and the top 10% "earned" over 350 times what their average employee earned. The research was done by Carola Frydman of Harvard and Raven E. Saks of the Federal Reserve.

Lynchings

Lawrence Beitler/Bettmann/Corbis


I listened to a chilling 13 minute podcast on NPR's "Radio Diaries", called "Strange Fruit: Anniversary Of A Lynching" that recounts the lynching of two young black men in Marion, Indiana in the summer of 1930. Hours after a white man was killed, three black youths were arrested. By the following evening a mob amassed, broke down the prison wall and hung two of the young men in the Town Center. Photographs of the two bodies hanging were sold as souvenirs and show many upstanding, respected Marion townfolk, milling about as if they were at their county fair.

It makes you wonder what things occurring today will shock those who see photos and hear interviews 80 years from now. There are the easy ones that shock nearly everyone today..... state-sponsored Abu Grahib, waterboarding, stoning to death of adulterers by Islamic fundamentalists, etc. But it's the ones that we are blind to today - so enmeshed are we in our certainty of who's right and who's wrong. Where there is righteousness today, there may be a wake of unconscionable cruelty that won't be recognized for a number of years.

Sissy Boy

I don't think there is an award show that Sally does not make sure to watch. Yesterday I was working out at the YMCA on an elliptical machine. Next to me was a middle aged petite Asian woman. She had her TV tuned to ESPN Baseball. I had mine on the "Red Carpet" show before the Emmys - studying what the stars were wearing. Twelve years of relationship can really alter a person.

Father Knows Best

I read the cover story in The Atlantic magazine, "The Point of No Return: Israel is Getting Ready to Bomb Iran." There's quite an outpouring of comments about it on the magazine's web site. Without getting into the speculation of whether (nuclear empowered) Israel or the U.S. might bomb Iran's budding nuclear facilities, the part that intrigued me was the description of dynamics between Benjamin Netanyahu, Prime Minister of Israel, and his 100 year old father. His father is a hawk. There was an older, venerated son who died a military hero during the rescue of Jewish hostages at Entebbe Airport in Uganda in 1976. It is Benjamin, "the Prime Minister son," who disappointed his father when, under U.S. diplomatic pressure, he withdrew Israeli forces from the West Bank town of Hebron in 1999. The father got up to speak at his centennial birthday party that Benjamin arranged. He did not wax sentimental about his children. He spoke about the need to trust in the military in the face of the existential threat that Iran poses to Israel. One friend of Benjamin's told the article's author that "always in the back of Bibi's (Benjamin's) mind is Ben-Zion (his father). He worries that his father will think he is weak."

The theme of favored, absent son and ever-striving present son sounds like an Arthur Miller play. I suppose that millions of adult sons can be analyzed in their actions and found still to be trying to please or piss off their fathers - me included. But not many of us direct armed forces that rule over another people desperate for their autonomy. Not many of us have a button that could launch a nuclear war.

Let's Make the Budget Work for California

When I first came to California in January 1973, the community colleges were free, as was day use of state parks, and many communities had multiple library branches. Now there's a plan to have entry fees at the state parks (many have already been temporarily closed); California cities are shutting down library branches; and there's no more free education at community colleges. That's just the tip of the iceberg with program cuts taking place in every arena from rehab programs in the prisons to sidewalk repairs. Why has the state gone backwards?

Very few of us have paid much attention to the state economy, but I don't think that's a viable option anymore. Something has gone really wrong and there's not enough political will in the legislature to change anything. It's high time for us citizens to learn what has caused the mess and how to turn it around.

I listened to a radio show that said we now depend on 140,000 of the richest Californians for 25% of our tax revenues. Is the problem that we stopped taxing the middle class to the levels we used to? Or is the problem that the gap between rich and poor has grown so much that we don't tax those richest folks nearly enough? Did corporations pay much more in taxes back in '73? I know that Prop 13, passed in '78, keeps property taxes low. Is that where the money used to come from? Or is there some truth to the Republican chorus that we added too many state workers and benefits?

It's time for regular citizens to collect data and start to understand the reasons for this demise. If you have some answers, then help educate me. Let's put California back on track.

Pulitzer Prize Photo Subject Was Saved

I imagine a lot of people who read the SF Chronicle's article on the Pulitzer Prize winners wondered what happened to the person in the prize-winning photo above. The article only said that the man was "trying" to rescue the woman. I'm sure there were hundreds of us who googled the Des Moines Register story to find out what happened. Kudos to Mary Chind of the Des Moines Register.

The back-story was even more amazing than I'd expected. Not only was the woman saved, but the rescuer was not some kind of firefighter or trained rescuer. He was a construction worker working on a bridge above where the woman was drowning and had himself lowered from a crane to reach for her. He wants no attention for this heroic act. The woman's husband drowned and it's likely that the photo brings up some very difficult, forever-raw memories for her. "Taking" someone's picture is always a dubious matter when it isn't posed, but I'm thankful to have seen this and I know there are thousands of us today who are sending heartfelt wishes to this sad, noble, survivor.

Blackwater - uncharted and bloody waters

In September 2007, Blackwater contractors were providing security for a convoy of state department officials, when they opened up fire and killed at least 14 Iraqis at an intersection - some shot in the back as they were trying to flee. Even US soldiers testified that Blackwater started the shooting. Four Blackwater employees were indicted for manslaughter, but a couple of weeks ago, all the charges were dismissed because the prosecutors used incriminating confessions that they had agreed not to use. It wasn't clear they could have convicted the shooters anyway given the legal vacuum that they operate within.

In a chilling interview with NPR's Terry Gross, Jeremy Scahill, author of "Blackwater" said that the Blackwater Chief, Erik Prince, sees himself as a "Christian Crusader" avenging the terrorism of 9/11. His band of veteran, mercenary soldiers - established less than 15 years ago - work outside the laws that our own soldiers must obey, with their own weapons, helicopters, and planes. Much of their work is kept secret - even from Congress - because the CIA and JSOC (special operations) don't have to report their contracts. The state department - which does report to Congress - paid the company more than $832million for security work between 2004 and 2006 alone.

From 2005 until the September 2007 shootout, Blackwater staff were involved in 195 shootings in Iraq, according to records gathered by Congressman Henry Waxman, and Blackwater employees fired first on 163 of those occasions.

Both Obama and Clinton - as candidates - said that we must stop depending on unregulated military contractors, but yet we still depend heavily on Blackwater in Afghanistan. As Congressman Waxman wondered in the hearings he convenened, how is it that we pay a group of mercenaries when we have an army, navy, CIA, etc. etc.? I am amazed that our laws allow for a Blackwater at all - with its own military planes, weaponry, training grounds, and soldiers. The company sounds like a right-wing militia group that is wildly successful because they target Muslims instead of the U.S. government.

There are many more shocking facts in the interview, this BBC article, and the Wikipedia entry.

Garden of Eden in the Sand

A small group of us attended a talk by an extraordinary man, Arne Garvi. He's Norwegian, but has lived in an arid, impoverished part of Niger since 1986. That year, he and his wife and three young children got into their VW van and drove from Scandinavia across the Sahara Desert to implement an untested idea for growing food in the desert without fertilizers or irrigation. Twenty-three years later Arne and his son are still there. His wife passed away a year and a half ago. 2600 households in the area around his station are now eating fruits and nuts from plants and trees that grow where before was just miles of land with not a plant or tree in sight. The area gets about 9" of rain per year, enough for one season of millet, assuming no drought. After the millet season the men head out of the area to find work while the women and children fend for themselves.

Arne's idea was to find and distribute seeds for plants and trees that were once indigenous to the area, adding diversity and something edible throughout the year, let alone some greenery on an otherwise barren and monochromatic expanse of land. The locals had cleared the land of trees long before because the birds that came to the trees also ate their millet. With a diversity of plants, that's no longer a problem. Arne said he practiced "passive persuasion," growing things on his land and then hoping it would arouse the curiosity of his new neighbors. He did not want to "sell" his ideas. He imagined it would require ten years before people would get interested in what he was doing on his land, but people started coming with questions and asking for his free seeds after three years. At this point there are 2600 households that have planted the diverse plants and trees and have been eating and marketing their fruits. The work has been done by and large by women and it has altered gender dynamics and generated some income for families.

When he first arrived, he was asked by a local official, how long he'd be staying. In that area they have seen a number of do-good agencies send people to do a project that always seems to end within 2 - 5 years. Arne looked down at his son and said he could only promise them two generations. He has definitely made good on that idealistic promise. It is called the Eden Project.

Stocks Up Jobs Down

Isn't it telling that the stock market climbed back over 10,000 on the day that the national jobs report showed the highest level of unemployment since 1983? The New York Times reports that 1 out of every 6 U.S. workers is affected.

Kyrgyzstan - Base Hit!

I just finished reading "Confessions of an Economic Hit Man" by John Perkins. He details the ways that mega-corporations like Bechtel and Haliburton work in lockstep with the U.S. government, the World Bank, and the IMF to control developing countries via enormous debt for mega-projects that are built by these companies and that benefit only a small segment of the populations.


I just finished reading "Confessions of an Economic Hit Man" by John Perkins. He details the ways that mega-corporations like Bechtel and Haliburton work in lockstep with the U.S. government, the World Bank, and the IMF to control developing countries via enormous debt for mega-projects that are built by these companies and that benefit only a small segment of the populations.

I guess my radar was way up when I saw a scant two-sentence article in the SF Chronicle this week, saying Kyrgyzstan had granted the US an extension on our airbase in their country after telling us to leave a few months ago. Kyrgyzstan? It's one of those "new" countries from the former Soviet Union that most Americans (like myself) have not added to our mental globes.

I looked it up on Wikipedia and found that sure enough it is one of the poorest countries in that neighborhood. Also this article from the Encyclopedia of Nations, says the IMF is very involved in propping up its currency.

Nevertheless, in this case Kyrgyzstan may have found a product to sell to the highest bidder and maybe even reduce some of their debt. Seems that Russia recently gave them 1.3 billion to evict the U.S. The New York Times did a much better job than our Chronicle and recounted some details of what Kyrgyzstan got from the U.S. - which uses this base extensively in our war against the Taliban in Afghanistan. I imagine that author John Perkins could rattle off several indicators that point to even more back-story on what leverage we used to get this agreement.

Tie Dye leaves home

When Alex and Zac were nine or ten, we were talking about college. Alex asked me if I would take care of Tie Dye, our 2 year old tortoise shell cat, until they got back from college. I was tickled and touched that he assumed life would resume and be the same, with all of us living together again after "college."

Sixteen years later he knows that nothing stays the same. He and Zac have been on their own, in different cities, since they finished college a few years back. And Tie Dye breathed her last yesterday, almost exactly 24 hours ago, when she was euthanized.

Zac and Alex were her "pet humans" and they gave her all the love a little cat could purr up. I'd never adopted a tortoise shell kitty and was trying to steer the boys to a tabby or a black cat at the Humane Society. They said, "Dad, it's the personality that counts!" and that was it.

As I held her lifeless bony body yesterday, I looked down at the variegated orange, rust-brown, and yellow pallette of her fur and buried my face in her side, breathing in as much of her beauty as I could.

She had an uncanny ability to know when it was exactly 6 PM. She'd come get me wherever I might be in the house and tell me it was time for wet food with the exact same meow-tones. It was her favorite time of day and as sick as she got in the final week, she only missed the call one time. Yesterday, the vet left Sally and me alone with Tie Dye for a few minutes before the euthanization, while emotions took over. I noticed a bag of treats on the desk and grabbed some. Tie Dye perked up for the first time all day and gobbled down several. Her purr was mostly wheez at this point, but it was a sweet moment none the less. And it was just a few minutes past 6.

Regulating Banks

This American Life (my favorite radio show) produced a recent episode on the current economic meltdown, called The Watchmen. They explore who was supposed to be regulating the Wall Street companies before they collapsed and required trillions in taxpayer bailouts.

We all know now that mortgages were being handed out like handbills at a political rally or maybe more like credit card enticements we get in our daily mail - regardless of anybody's ability to pay them off. It turns out many jobless people were given a mortgage while the bank execs and jr. execs were swimming in bonus millions – soon to be joined by creative insurance companies like AIG. But who was watching the store for us depositors and taxpayers and regular people who work far from the financial sector doing little jobs like teaching, construction, nursing, and firefighting?

They trace down three regulating bodies that could have put an early stop to the whole thing, but didn't. One was the Office of Thrift Supervision. One was Congress which has committees overseeing the banks. One was the ratings agencies like Moody's and Standard & Poor's. ("Poor" must be some kind of joke for that firm.)

The Office of Thrift Supervision is funded according to the number of banks and holding companies that it regulates. When banks close OTS'ers lose their jobs. Congress members depend dearly on the campaign contributions from the banks they regulate. The ratings companies, it turns out, are also paid by the issuers of stocks and bonds that they rate. What's wrong with this picture?