Kind of Red

March 23, 2009

Bear Market

Filed under: Uncategorized — The Painted One @ 1:34 am

GO TO now, ye rich men, weep and howl for your miseries that shall come upon you.2 Your riches are corrupted, and your garments are moth-eaten. 3 Your gold and silver is cankered; and the rust of them is a witness against you, and shall eat your flesh as it were fire. Ye have heaped treasure together for the last days. 4 Behold the hire of the labourers who have reaped down your fields, which is of you kept back by fraud, crieth: and the cries of them which have reaped are entered into the ears of the Lord of sabaoth. 5 Ye have lived in pleasure on the earth and been wanton; ye have nourished your hearts, as in a day of slaughter.

James 5:1-5

Bear Market

Don’t look now; the market is bear, and far too many Americans have found their cupboards bare. Thousands more who lack their own cupboards, and houses for that matter, have begun taking shelter in motels and tent cities. We as a nation are in dire straits. Moreover, the conditions in the job market have plummeted to the point that a Rhode Island Strip Club believes it can take advantage of the skyrocketing unemployment rate by hosting a job fair to fill 30 empty positions. Somewhere out there Taraji P. Henson is singing and Terrence Howard is nodding along in approval.

It's Hard Out Here For a Pimp

It's Hard Out Here For a Pimp

Amid this crisis, American International Group, the insurance behemoth whose tentacles spiral across the globe, announced a $61.7 billion quarterly loss on the same day most of the nation learned it distributed at least $165 million dollars (but potentially $218 million) worth of bonuses to its executives. This was in addition to $121 million worth of previously scheduled bonuses and after the company received $170 billion dollars of our money. As we have heard more times than we might have ever wanted, the bonuses were defended by arguing they were the product of contractual obligations forged before the financial crisis. Nevertheless, Professor Lawrence A. Cunnningham of George Washington University Law School has identified a slew of perfectly legal means for abrogating the payments, yet few seem to heed such advice because chaos rules the day.

As a taxpayer and now shareholder in the company, I was a bit incensed by it all, and the rest of the general public seems to agree with those sentiments. The worst part of it all is that it did not end there.

citigroup-jobs-2008-11-19-12-7-51

Not to be outdone by A.I.G., Citigroup Inc. announced its reward for Chief Executive Officer Vikram Pandit and his lieutenants steering the company shares to a value below the price of a Starbucks’ frappuccino was a new $10 million executive suite.  If only ever field held such rewards for incompetence.

The furor over executive bonuses at A.I.G. even caused Federal Reserve Chairman Ben Bernanke to call for greater levels of scrutiny of executive compensation and called for banking supervisors to pay “close[r] attention” to compensation practices. One would imagine he should have stumbled upon such a revelation sooner, but bettter late than never I suppose.  Additionally, some members of Congress say they have heard the clamoring of their constiutients, and are promising revenge to quell the growing public fury. Nonetheless, these are the same people who resisted proposals for imposing executive compensation limits.  In earlier years, these were the same people who demanded the government drastically limit regulations of our financial markets under the guise of free market principles.  When those free market principles failed before our very eyes, these are the same people who demanded that Sen. Chris Dodd insert exemptions into the stimulus bill that allowed bailout recipients to receive bonuses.  These efforts thwarted the efforts of Senator Ron Wyden and Senator Olympia Snowe to insert a provision that would force recipients of government funds to cap their bonuses at about $100,000. These people decrying the greed of Wall Street are the same people who used our money to dole out $9.1 million worth of bonuses to their staff last year.  There’s a reason why I do not place my trust in people, especially not these people.

Public Outrage

It’s been encouraging to see ordinary Americans take the streets and express their outrage in this despicable practice, yet the answer does not rest solely in our right to peacefully assemble (and unfurl our fury on such worthy recipients).  The above-cited warning offered in the epistle of James comes as more than an indictment on the greed of the wicked, but it also offers solace to the poor and down trodden who cry out to God. Does He see?  Does He hear?  Does He care? Here, scripture reminds us how the Great Judge sees and hears all, and will execute His judgment both unexpectedly and suddenly. This manifest avarice we witnessed this past week will not last, and if any good comes from it is that we all have witnessed the potential end of much of life as we know it on Wall Street.  Let’s hope when it does, some of these executives join Terrence Howard and Ms. Henson in their singing.

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