Politics and Media Headlines 4/21/09
Tom Friedman (No, not THAT Tom Friedman, but it’s ironic that this work of art was created by a person with the same name as the one who wrote a book called The World Is Flat, which gave little consideration to those humans flattened by his definition of a flat world. I’ve request permission to post the work.)
Here’s what happened to THAT Tom Friedman:
Thomas Friedman Will Have to Sell His Moustache For Food (by John Cook at Gawker)
New York Times columnist Thomas Friedman didn't have a column in [Sunday’s] paper. Was it because the company that his wife's fortune is invested in went bankrupt last week, and he's too sad to type? General Growth Properties filed for bankruptcy on Thursday, which is notable because it's one of the nation's largest mall operators, with 200 malls in 44 states—the Times called the company's failure "one of the biggest commercial real estate collapses in United States history."
It's also notable because Friedman's wife, Ann Bucksbaum Friedman, is an heir to the family that founded GGP, and her family still owns about a quarter of the company... [I]t's got to hurt when your spouse's family loses $4 billion. Here's what Friedman had to say about his family's business back in 2000: “My relatives are in the mall business, where everyone is worried about all the stories of the high-tech age, just around the corner, when you will be able to do all your shopping online from your Palm Pilot, and your refrigerator will automatically order more milk via the Web when its high-tech sensors indicate you're low.”
Well, Tom, you loved it when the flat earth mentality was destroying MY business (IT). How do you like being flattened yourself (by, essentially, IT)?—Caro
Tuesday: The Rich have feelings too (by riverdaughter at The Confluence)
O.M.G. This piece, The Rage of the Priveleged Class, in New York Magazine is a must read. It’s all about the trials and tribulations of the movers and shakers on Wall Street who are starting to feel the pinch both economically and socially. It is hard to find a piece of journalism that is this unbalanced by the subjects themselves. These people need a major attitude adjustment….
The hidden nugget in this piece, and one of the most important reasons why we have to kill this out of control greedy mindset once and for all, is the account of the Goldman-Sachs vet who says that last fall, G-S employees were panicky and dismal over the value of their company. They thought they were done for and were going to go the way of Bear Stearns and Lehman Brothers. Then the government and AIG stepped up to the plate with cash infusions and now they’re partying again like nothing ever happened.
Geithner says hard to set prices on toxic assets (Reuters)
Treasury secretary Timothy Geithner on Tuesday said difficulty in setting a value on banks' toxic assets was a continuing hindrance to their ability to lend and borrow.
Yes, it is hard, Tim. It’s very hard to set prices when you’re trying to shovel taxpayer money to people who should be losing their shirts.—Caro
A Crisis of Ethic Proportions (by John Bogle, thanks to Economist’s View)
I recently received a letter from a Vanguard shareholder who described the global financial crisis as "a crisis of ethic proportions." Substituting "ethic" for "epic" is a fine turn of phrase, and it accurately places a heavy responsibility for the meltdown on a broad deterioration in traditional ethical standards… [T]he larger cause [of the financial crisis] was our failure to recognize the sea change in the nature of capitalism that was occurring right before our eyes… The managers of our public corporations came to place their interests ahead of the interests of their company's owners… The malfeasance and misjudgments by our corporate, financial and government leaders, declining ethical standards, and the failure of our new agency society reflect a failure of capitalism. ...
What's to be done? We must work to establish a "fiduciary society," where manager/agents entrusted with managing other people's money are required -- by federal statute -- to place front and center the interests of the owners they are duty-bound to serve. The focus needs to be on long-term investment (rather than short-term speculation), appropriate due diligence in security selection, and ensuring that corporations are run in the interest of their owners. ... Making that happen will be no easy task.
Just remember that the 40 year campaign by a few rich, right wing families to convince Americans that greed is good (and to reduce their own taxes) is what gave us this result. It’s no accident that greed rules the American elite. Read this chapter from my partially written book, Off Balance (written before the Democratic takeover of Congress in 2006).—Caro
Business needs to speak out against greed (by Matt Miller, a management consultant and a senior fellow at the Center for American Progress, author of The Tyranny Of Dead Ideas: Letting Go Of The Old Ways Of Thinking to Unleash A New Prosperity)
[F]ar-sighted business leaders need to weigh in now on three subjects on which they have been notably absent: executive pay; the need for an updated “social contract” that fits 21st-century realities; and a strategy to make service jobs that cannot be offshored a path to the middle class. These are no longer political questions that can be left to Washington trade associations or viewed as a distraction from the “real work” of running one’s business, because failure to address them will fuel a backlash that affects every company’s licence to operate…
Chief executives face a choice. They can help bolster workers’ security, or they can hire more security guards and hunker down. There is little doubt that the risks of business as usual are far greater than the risks of such new approaches. The trouble is that every individual chief executive has an incentive to lie low. A group of 10 far-sighted business leaders who sense the threat (and the opportunity) could get this ball rolling. With business nearing the brink, who will answer the call?
Yep, it’s reform or pitchforks. I suggested to Matt that United for a Fair Economy might provide a basis for this suggested project. Any other ideas?
Inspector General Barofksy on TARP (Calculated Risk)
From the WSJ: TARP Watchdog Urges Better Oversight “A report by the TARP watchdog said the Treasury should take steps to better manage its financial-rescue effort so that taxpayer dollars are safeguarded and programs are more fraud-resistant, accountable and transparent.” And on the potential for gaming the PPIP: “‘The significant Government-financed leverage presents a great incentive for collusion between the buyer and seller of the asset, or the buyer and other buyers, whereby, once again, the taxpayer takes a significant loss while others profit,’ [the report said].”
Oh, no, they wouldn’t GAME THE SYSTEM!—Caro
Crimes suspected in 20 financial bailout cases (Chicago Tribune)
The special inspector general says TARP is 'inherently vulnerable to fraud, waste and abuse.' The risk grows as the plan becomes more complex, he says. In the first major disclosure of corruption in the $750-billion financial bailout program, federal investigators said Monday they have opened 20 criminal probes into possible securities fraud, tax violations, insider trading and other crimes.
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