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Title: The Next American Revolution: Main Street vs. Wall Street
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URL Source: http://seekingalpha.com/article/118 ... ion-main-street-vs-wall-street
Published: Feb 3, 2009
Author: Mark McQueen
Post Date: 2009-02-03 09:17:27 by tom007
Keywords: None
Views: 241
Comments: 14
The Next American Revolution: Main Street vs. Wall Street by: Mark McQueen February 03, 2009 Mark McQueen Mark McQueen Add to Your WatchlistAbout this author: The stories are well known: * American Automaker executives flying to Washington in private jets to beg for government handouts. * Two hundred thousand dollar California spa bills at AIG (AIG), even after the U.S. taxpayers had to bail that insurance company out of certain bankruptcy. * Eliot Spitzer and his difficult three diamond session. * Citigroup (C) taking delivery of its new $50 million Falcon after receiving more than $40 billion of preferred share capital from the U.S. Treasury to keep the world’s Financial Supermarket from the annals of Receivership. The impetus for the French Revolution can’t be summarized in a blog post, but there were two core elements that strike me as perfect parallels for the ongoing lack of judgment among some elites south of the border. I’ve always thought that average Americans shared many of the ideals of The Enlightenment, particularly equality and freedom of the individual. Now that American taxpayers are bailing out many of the elites of their society, the parallels to pre-Revolution France begin to appear. Louis XVI took power during a financial crisis. France was nearing bankruptcy and the costs of the government exceeded tax revenues. Some of the most blessed in society didn’t pay tax. After several years of deficits, the U.S. government has been forced to dig even deeper to ensure that Citigroup, Morgan Stanley (MS), GE Capital, General Motors (GM), etc., stay solvent just long enough for the economy to recover. In the meantime, President Obama is in the unhappy position of having to respond to the spectacle of Wall Streeters taking in $18.4 billion of bonuses even as the TARP funds continue to flow. And this is where the prospect of a virtual revolution kicks in. If you work at a technology company that is in dire straights and hits the wall, your severance and benefits are an unsecured liability, you might get zippo from your employer. At Merrill Lynch (MER), for example, insolvency was only staved off by the intervention of the U.S. Treasury. But that didn’t prevent John Thain from recommending (and paying) $4 billion in bonuses just prior to the closing of the Bank of America (BAC) acquisition. And that patent unfairness will be the genesis of this modern day revolution. It isn’t that average citizens reject the idea that risk-takers should be rewarded. Americans have none of that “Tall Poppy” syndrome that we see here in Canada. But this situation is different. Even failed risk-takers are being rewarded: that’s something that will not go over well in coffee shops across the 50 States. The idea that “we need to pay people to retain them” is just poppycock in this situation. The company is insolvent — you don’t have anything to pay them with. And, since the rest of Wall Street also took TARP funds, they probably can’t hire these teams away from you, either. The notion of pay-for-retention is a hollow argument. There won’t be torches and pitchforks in this revolution; it will be the tax system and compensation caps that are brought to bear instead. But elected officials will have to make a choice: Pick the side of Wall Street or Main Street. The choice will be an easy one to make.
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#1. To: tom007 (#0)
The real "risk takers" aren't being rewarded. The real risk takers (Investors) have already lost their risk capital and are now being taxed to reward those that risked their capital foolishly. Let's get it right. The retirement and money market investors have been robbed already, and are now being asked to reward the thieves through taxation. One last comment here. The sub-prime mortgage debacle is not the huge problem as it's being portrayed. The derivatives fraud is the elephant in the living room.
If a thousand men were not to pay their tax bills this year, that would not be a violent and bloody measure, as it would be to pay them, and enable the State to commit violence and shed innocent blood. Henry David Thoreau - 1849
I disagree. When the welfare checks stop, when 1/4 are out of work, when the produce rots in the fields, when the slaughterhouses stop slaughtering, when the trucks stop rolling because there is nothing to haul, then there will be blood in the streets. That's where we're heading. It has nothing to do with the tax system or salary caps.
Click for Privacy and Preparedness files According to some sources, some banks have something like 400:1 leverage if derivatives are fully accounted for. And a few smart folks feel nearly all large US banks are insolvent.
"Satan / Cheney in "08" Three days food supply in supermarkets under normal, non panic conditions.
"Satan / Cheney in "08" Bingo!
There's no 'feel' about it, my man. It's a fact. US bank deposits total $7 trillion. Assets total $275 billion. That leaves the banks $6.725 TRILLION short. FDIC can cover about $40 billion. Do the math.
Checked my bank (sock) this morning, two bucks safe and secure.
Being broke is the ultimate tax shelter.
The memory of the Heroic Age was eagerly seized by all who could take power, by fair means or foul, but that age could not be recaptured, and despite the temporary improvements... the racial material on which they had to work was of little value, and their efforts bore no fruit after their own demise.
That is why during the Great Depression there were NO mass riots etc. Most of us had little before, so it was not far to fall. Hitch up your belt another notch and slog on. Current generations have never know hunger, so let the riots begin.
You have inadvertently told me why there will NOT be riots. They're not only NOT hungry. The majority is obese and a "sizable" (pardon the pun) minority is MORBIDLY obese. Fat people don't riot well. They can barely even move. A lot of them just sorta waddle.
“I would give no thought of what the world might say of me, if I could only transmit to posterity the reputation of an honest man.” - Sam Houston
Yep, my gold penis ring is still secure, so my retirement plan is safe.
"Satan / Cheney in "08" Sam... Take another look at the long lines at soup kitchens and employment offices during the depression, you will see NO fat people, none.
I'm talking about TODAY.
“I would give no thought of what the world might say of me, if I could only transmit to posterity the reputation of an honest man.” - Sam Houston
That is the way it is meant to be. As long as there is plenty and our betters can live in luxury, it is fine if the rest of us have a nice living standard. However, during lean times, our betters still deserve to live in luxury while the rest of us go hungry and eat what scraps we can find.
Even failed risk-takers are being rewarded: that’s something that will not go over well in coffee shops across the 50 States.
#2. To: tom007, All (#0)
There won’t be torches and pitchforks in this revolution; it will be the tax system and compensation caps that are brought to bear instead.
#3. To: noone222 (#1)
. The derivatives fraud is the elephant in the living room.
#4. To: PSUSA (#2)
when the trucks stop rolling
#5. To: noone222 (#1)
The sub-prime mortgage debacle is not the huge problem as it's being portrayed. The derivatives fraud is the elephant in the living room.
#6. To: tom007 (#3)
And a few smart folks feel nearly all large US banks are insolvent.
Mike Flaherty: Yeah, it's been there a long time. I wish I knew which corner.
My Man Godfrey (1936)
#7. To: Esso (#6)
#8. To: Cynicom (#7)
#9. To: Prefrontal Vortex (#8)
Being broke is the ultimate tax shelter.
#10. To: Cynicom (#9)
#11. To: Cynicom (#7)
#12. To: Sam Houston (#10)
#13. To: Cynicom (#12)
#14. To: tom007 (#0)
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