Swans Commentary » swans.com March 9, 2009  



Blips #82
 From The Martian Desk


by Gilles d'Aymery





"A goal without a plan is just a wish."
—Antoine de Saint-Exupéry (1900 - 1944)


(Swans - March 9, 2009)   SIR TEDDY: The slowly-dying senior senator of Massachusetts, Edward "Ted" Kennedy, has been awarded an honorary knighthood for his heroic work over decades on behalf of the little people by Gordon Brown, the prime minister of the U.K. It brings to mind Fred Goodwin -- err, Sir Fred Goodwin -- the former chairman of the Royal Bank of Scotland who was knighted by the queen in 2004 for "his immense services to the bank." Since then, the Zombie bank, utterly insolvent and bankrupt, has had to be taken over by the government -- in other words, nationalized at taxpayers' money (money that taxpayers do not have). Meanwhile, "Sir" Goodwin is getting a weekly retirement check of about $17,000 (14,000 pounds to be exact) -- a week! That's $884,000 a year, give or take the exchange rate. Want to bet that Sir Teddy will be remembered for the nationalization of the crumbling US health care system? (More infra.)

IT MAKES ONE wonder about the kind of universe our Masters inhabit. Take Rick Wagoner, the CEO of General Motors. Mr. Wagoner, like his pal at Citigroup, has agreed to a $1 salary in 2009, as he is asking for more bailout money -- which on the surface is a welcome symbolic gesture...but scratch the surface... Last year Mr. Wagoner presided over a loss of over $30 billion -- which compared to AIG's $100-billion trouncing is cheap change...and AIG's losses are only a tiny fraction of the losses incurred by our famed military in their procurements and unwinnable wars without end...but that's a detail better left undisclosed. Anyway, Mr. Wagoner received a meager $5.5 million compensation in 2008, which turned out to be, horror of all horrors, a stratospheric reduction of 61 percent compared to what he got in 2007 (when the company was also losing money) -- my heart is truly bleeding. Frederick Henderson, Rick's second in command and GM's president and chief operating officer, suffered even more. He was subjected to a 76 percent reduction and only received $1.7 million in 2008. Worse, out of concern for the well being of the company, Henderson agreed to a further cut of 30 percent and will be paid a sorry $1.3 million this year -- I am really in tears by now. I suppose the United Automobile Workers ought to take notice and emulate management's thrift. After all, as our free-market friends like to point out, it's all the workers' fault, anyway. Just think what would happen to GM if the workers accepted to work for -- let's be generous -- $1 a day. Problem solved. Or they could all be paid $1.3 million a year. This approach too would solve the problem.

I HEAR THAT Merrill Lynch, which lost tens of billions, paid out bonuses of more than $1 million apiece to 696 people in 2008. You know the spiel. Without financial incentives, your highly competent and motivated personnel (it is yours, people -- check your taxes), the best of the best, will leave and join the competition where they will perform as well as, or better, than they did in their current positions. Have you examined the competition lately? Were I not a Martian, I'd advocate dispatching all these Masters to Mars. I'm sure they'd be able to squeeze milk and honey out of the rocky surface. (And, believe it or not, nobody ever noticed that Bernard Madoff never bought any securities for his clients in at least 13 years. His monthly statements were all made up. Yep, nobody noticed! Oh, never mind.)

THESE HIGH ACHIEVERS -- our [Robber] Barons of Industry and Masters of the Universe -- need and deserve incentives because, see, they are wealth creators (notice the wealth they have "created"?) and the rabble -- hoi polloi -- that's you and me -- could not make do without their great achievements. They are the engines that make our economy churn, right? These fellows, already feeling unloved and unwanted, are whining about the "confiscatory" nature of the repeal of the Bush tax cuts announced by the Obama administration. Imagine, a marginal tax rate increase from 35 percent to 39.5 percent for incomes over $250,000. It's the end of the world as we know it, right? Let's see: On paper, say you make $300k, your tax burden would increase by a paltry $2,250 (that's 4.5 percent of 50k). Over all, and again on paper, the tax on those $50k would amount to $19,750. Hence the high achiever would still keep $30,250 in his or her pocket -- no small change in comparison to minimum wagers! Socialism is coming!, socialism is coming!, shouts the punditry. Well, then the Eisenhower administration with its 80 percent (or FDR's 90 percent) marginal rate was truly communistic!

OBAMA'S EGGHEADS are concocting a $1 trillion elixir to be injected in hedge and equity funds in order to jumpstart the wheel of credit to consumers. It's a neat strategy: The privateers must come up with 10 percent of the funds and the government (your children's and grandchildren's money) pitches in 90 percent. If things go right the privateers get to keep the profits. If things go wrong the government picks the tab (again, your children's and grandchildren's money). The hope is that lending will start again and consumers will borrow. In other words, the current overwhelming debt burden is being ignored and the eggheads devise strategies that are supposed to turn the economy around by adding more debts. But damn it, it's not more consumerism we need. It is less, redirected consumerism toward the basic needs of the vast majority of the people. Interestingly, the sheeple seems to understand the conundrum. There is credit out there. One can buy a new car discounted 20 percent, or get 0 percent financing. Money is there, but spending is spare for good causes: When your job is on the line, your house is not worth your mortgage, your 401(k) plan is down 50 percent, the daily news keeps assailing you with catastrophic predictions (do they do it on purpose?), and you are a debt peon, why would you want to get into more debt? Meanwhile, not surprisingly, the masters of the universe are all in favor of the plan. Wonder why?

WHERE ARE THE PITCHFORKS, for good sake? Where are the pitchforks, folks? Can't you see that this is class warfare and that the "high achievers" class keeps winning? Want to turn this economy around? Simple: Either mandate a maximum salary of, say, $250k, or impose a marginal income tax rate of 99 percent, no deductions allowed. Treat corporations accordingly. Tax so-called non-profit organizations, which by and large are nothing more than family businesses, likewise. Then spread the proceeds among the population while heavily investing in the future -- natural sources of energy (wind, solar, hydro, waves, algae, etc.); relocalization of food production to the extent possible; healthy living and care; education; and, above all, solidarity (that is, sharing) programs with the wretched masses and the entire living system of our planet.

YOU WILL RETORT that our high achievers will depart to Singapore in a hurry. I'll respond, "good riddance...and good luck, Singapore!" If it were not for my phobia of neighbors I would welcome them to Mars! These people are feeding on our blood. They are leeches. Aren't you tired of people fleecing you in the name of growth and progress? Aren't you repulsed, as I am, by this blood-sucking minority that puts its self-satisfaction and greed ahead of the common good? Has the concept of "the commons" been so erased from your mind thanks to the brainwashing of the Milton Friedman and Ayn Rand crowd, that you have become blind and deaf? Can't you see and hear anymore?

I'M AFRAID blindness and deafness are still the order of the day. Take health care as an example: "Everything must be on the table," says President Obama...except a single-payer system. Notwithstanding the fact that a majority of Americans and medical professionals wants such a system; notwithstanding the fact that a single-payer system has nothing to do with the dreaded "socialized" medicine (it's a paying system, for good sake, only a way to manage and dispend the costs of care, with absolutely no restriction on the choice of medical dispensers) and would save the American polity over $300 billion a year, it remains off the table. Write to your president...off the table. Write to your congressional "representative"...off the table. Write to your senator(s)...off the table. Write to your newspaper(s) of choice...silence...off the table. Here is a suggestion: Since the defenders of the for-profit system based on private insurance keep arguing that the American people want choice, then why not give the opportunity to businesses and individuals to choose Medicare? People satisfied with their current arrangements will be free to keep them. Those who would rather enroll in Medicare will be free to do so. Ah, freedom and choice... I can assure you that within a few short years the private insurance companies would be history.

MAYBE YOU ARE UNEASY, wondering about the ills that would come forth, were our system of governance more focused on society and not individuals. Perhaps, like Roger Cohen, the New York Times columnist, you dread of étatisme and "socialism," as Cohen pundited in his March 5, 2009 column, "One France Is Enough," a superb installment in the recurring episodes of French bashing. But then, ask yourself, as one of the commentators did on the NYT Web site:

What exactly should the average (not newspaper columnists or financial experts who have a comfortable amount of "nut" in the bank to cover a luxury home or two) US citizen's fear be about being like France?

Would that be...

Free Health Care?

Free Child Care?

35 hour week?

Minimum wage double the US level?

Free College Tuition?

6 weeks paid vacation?

Unemployment insurance of 80% of salary that never runs out?

A 21st century transportation network (at affordable prices)?

One sixth of the US prison population?

Even millionaire journalists like you [Roger Cohen] and Friedman and the other "experts" who didn't foresee the crisis spend enough time in France. Even neocons have a house in the South of France for August.

And I didn't even mention the cheese!

NOT THAT the French economy is doing well -- the entire world is in deep voodoo -- but that reader has a point and more. It's called a social safety net, far from perfect and not as extended as it used to be when the moneyed class was facing strong unions and feared the specter of communism, but by all measures of human wellness a far better system than American social Darwinism. Cohen calls it a "nanny state," but it's a state that year after year ranks first in health care delivery in the world (with people having a longer life expectancy), has a higher productivity per capita than in the U.S., first-rate scientists and engineers, and on, and on. Upward mobility is also higher than in the U.S. in spite of the canards being fed to the American people by its ideologues. And if you think that meritocracy does not exist there, you should compare the admission process of, say, Harvard or any Ivy League US university and that of École Polytechnique or École Centrale. No sports scholarships, family or political connections, legacy admissions, or money will get you in either school. Admissions are strictly based on exams and merit. The happy few come from all walks of life, some from modest background, and eventually become members of the elite. Talk about upward mobility! Yup, the U.S. would be well-advised to learn a few tricks from the despised Gaullois and their "nanny state."

BUT, NO, NO, we are Americans. We know best. If you don't like our system leave the country; go to France or wherever. We are exceptional, doing God's work -- chosen people among the few, including, of course, the Israelis -- advancing and spreading civilization all over the world and into the heavens. We are AMERICANS and can have it ALL. See, for instance, how we are turning things around and can be happy and proud about our lot: Thanks to Wal*Mart the retail industry had a 0.7 percent sales gain in February. Without Wal*Mart, overall retail sales would have fallen 4.1 percent in February compared to one year ago. Wal*Mart, Wal*Mart, Wal*Mart!

SEVENTY PERCENT of the stuff sold in Wal*Mart stores, which people buy gleefully, comes from China, thereby furthering the destruction of their local economy. Hey, we need to help the Chinese keep buying our T Bills, don't we? Maybe the Chinese will provide us with the health care we do not have. Just a few more T Bills to add on the ledger.


 . . . . .

C'est la vie...

And so it goes...


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About the Author

Gilles d'Aymery on Swans (with bio). He is Swans' publisher and co-editor.



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Swans -- ISSN: 1554-4915
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Published March 9, 2009