The Fed’s assumption of $30 billion of Bear Stearns obligations will go down in American financial history as one of the greatest examples of moral hazard and cronyism as has ever been seen. The fact that the Bear Stearns common shareholder is receiving even $2.00 a share is simply obscene and entirely unacceptable. They deserve nothing, not a single red penny, because for years they derived the benefits of Bear’s often nefarious actions in the marketplace, and by virtue of those same ill-considered strategies, Bear and its shareholders must suffer the negative consequences. Nor do Bear’s employees warrant any particular sympathy since Wall Street investment firms have over-compensated them via obscene stock option and bonus grants for many decades.
Did any of the Bear employees feel sorry for the millions of service workers (e.g., nurses, teachers, police, paramedics, firemen, soldiers, sanitation workers, sewage treatment employees, etc) who toil endless hours for fixed salaries that barely pay the rent, and whose compensations do NOT allow for stock options or bonus payments? Answer: they never gave a damn, the Bear employees lived the most indulgent lives imaginable, for work that entailed pushing paper on a desk, and now they are crying for government assistance? What special government assistance is provided the nurse who is released from her job or the fireman who is forced to retire early? Answer: they get the standard unemployment benefits available to anybody else in the society.
In the late Nineties, when various gold miners were going bankrupt, where were the Fed bailouts for them? Why were companies like Pegasus Gold or Royal Oak allowed to collapse and why did the Fed not provide their common shareholders so much as a red penny of financial salvation? TENS OF THOUSANDS of gold miners lost their jobs during the vicious gold bear of the late Nineties. Why didn’t the Fed take special measures to preclude the decimation of an entire industry back then?
Answer: because Hank Paulson, the single most corrupt Treasury Secretary to hold office since that other slimy Goldman Sachs partner, Robert Rubin, rigged the stock market bubble for the enrichment of his buddies on Wall Street, is utilizing his undue influence at the Fed in order to take care of “his own” via special assistance for Bear, and he could care less about bankruptcies in industry sectors such as gold mining that do not adversely impact him and his Wall Street partners in crime. The concept that Hank Paulson is precluding “systemic risk” in saving Bear is utterly preposterous. Other industrial sectors have seen major giants fail (e.g. WT Grant (retail), Worldcom (telecommunications), or Delta (aviation), yet the contagion of such failure was contained….why would anybody expect any other result in Bear’s case?
Analogously, those politicians (most notably the insufferable mercenary whore who goes by the name of Hillary Clinton) promising special relief for homeowners unable to afford the mortgages on their depreciating homes are also spreading moral hazard throughout land.
Why should the circumspect, financially prudent individual who chose to live in an apartment during the past several years (since he felt he could not afford a home) be forced to “bail out” those greedy, impatient home-owners who felt it was their entitlement to own a house, despite not having adequate financial resources to weather any kind of financial storm? Why should apartment owners be compelled to offer a single tax dollar to assist reckless homeowners who misrepresented their incomes and wherewithal in order to live the good life? Are the apartment dwellers supposed to feel sorry for the homeowners now that reality has dawned upon them? For the past decade, homeowners enjoyed nice green lawns, private swimming pools, and peace and quiet while many apartment dwellers suffered the myriad inconveniences of living like animals inside cramped cages. Are they now supposed to feel sorry for the homeowners who must now live only in accordance with what they can afford, just as renters have been doing for years?
Renters should be SCREAMING over any special bailouts handed homeowners by politicos who cater to special interest groups ahead of the elections. Moreover, gold industry members who suffered significant damages during the late Nineties should mass in front of Hank Paulson’s office and DEMAND retroactive and special compensation no different that what he is providing Bear. Why should Bear or any other financial sector entity derive these special benefits while other industry sectors experiencing difficulties are left to “die on the vine?”
Enough is enough!
I suggest that insufferable weasels like Hank Paulson and Hillary Clinton better exit their ivory towers and take a walk through the real America, not the photo op America contrived by their handlers. What they will discover is that the average American (who happens to be a RENTER, not a homeowner….who does NOT work on Wall Street but likely toils in a service industry) is growing FURIOUS and is only a centimeter away from rioting in the streets and hanging them from a light pole.
