For the last 30 years the economy has been hijacked by the rich and powerful who forged it into a tool to use against the working classes. Republicans were smart in their deception, hijacking the American dream by crippling the programs that support it and then funneling the government's revenues to the rich through tax cuts and other benefits. They looted the government treasury and then pleaded governmental poverty when it came time to fund the services required by the people, such as Medicare and Social Security.
The gullible middle class and working poor were told that all of this was good for them, and whether out of ignorance or fear or prejudice or foolishness, many believed it. They signed onto tax policies that worked like a shell game that took from the poor and middle classes and gave to the rich. They were sold on "trickle down" – with the speeches of the Great Communicator (Reagan) having so addled their brains that they thought it was a wonderful idea to hand over their share of the nation's wealth to those who were already extremely wealthy. They were told that doing this would create jobs.
Contrary to what Republicans say, what they do is a different matter. They say they believe in small government, but when they are in power they do not shrink the government. Instead, they enlarge it by spending billions more on the military, turning the bounty over to the rich through no-bid government contracts. The difference between Republicans and Democrats is not the size of government, but what the money is spent on.
The foundation for the crash of the financial sector was set in place around 35 years ago. It all began when control of the U.S. economy was turned over to the banks and the investment firms of the Western world. It was called financial “deregulation,” which was started about 35 years ago under Nixon, continued by Reagan, made worse under Clinton who signed the 1999 Gramm-Leach Act which repealed the 1933 Glass-Steagall Act, with the result that bankers, brokers, and insurance companies can combine into humongous corporations deemed too big to fail. The Glass-Steagall Act had kept commercial banking separate from its investment-house cousins. Finally, the Bush administration turned a blind eye to what was going on with the financial markets, refusing to admit that the economy was in a recession until it blew up in their faces. Although Republicans deny that they were part of the problem, it was on Bush's Watch that the financial industry unraveled and took Main Street with it.
From 1994 to 2006 the financial industry ran amok due to a filibuster-proof Republican majority in Congress, led by iron-fisted Tom Delay who locked out debate on all legislation. (It's funny how the Republicans are now begging the Democrats to not do that.) Clinton acted with complicity when he signed the Gramm-Leach Act. Then, George W. Bush handed complete power over to the financial and oil industries, unwittingly setting our country up for the 2008 Crash. His actions were not surprising considering that fact that the Bush family has served the Wall Street financiers and oil barons for three generations.
This recession is a perfect storm, the result of a financial system where the money pool is largely created by bank lending. First, the system was based on credit/debt that currently cannot be repaid. Secondly, it is bankrupt because since about 1980, starting with clothing manufacturers, our industry and jobs have been increasingly outsourced abroad to cheap labor markets or cheap labor has been imported to replace the higher paid American worker. This caused middle class incomes to lose ground who, after running up their debt as high as possible, can no longer participate in the retail market. Third, it is bankrupt because deregulation allowed large banking institutions to gamble with high risk derivatives.
In the first few decades following World War II, the United States, despite many serious flaws, established the model of a highly productive society that shared its prosperity widely and made investments that were geared toward a more prosperous, more fulfilling future. The American dream was alive and well and seemingly unassailable. But following the oil shocks, the hyperinflation, and other traumas of the 1970s, and then being hypnotized by Reaganomics in the 1980s, Americans allowed the right-wingers to get a toehold and begin the serious work of hijacking the American dream.
During all this time the public has been like sheep, believing and following the Republicans into deregulation, financial shell games, and ponzi schemes. But, due to widespread greed and everyone trying to carve out their own very large piece of the pie by running up huge debts, the financial house of cards – built on too high leverage – came crashing down.
We are now caught up in a downward spiral that Washington is trying to stabilize. People who work for a living no longer have enough purchasing power to pay their debts or to buy anything much beyond necessities. This loss of purchasing power is hurting retail, which hurts the stock market, which causes tightening of the credit market and further slowing of production. But, as I said in previous posts, the recession train had already left the station well over a year ago – since December 2007 – with signs of weakness long before then. Two of the most prominent signs were stagnant middle class wages and the loss of jobs to other countries. Blue and white collar workers were told to quit whining and re-educate themselves for a different occupation while those at the top continued to rake in millions.
But working families were in trouble long before this recession hit because public officials, who should have been looking out for the middle class and the poor, were part of the collusion of Republican conservatives and corporate leaders that rigged the economy in favor of the rich – and ultimately brought it down completely. Abandoned by big business and their ideological henchmen in government, the hard working citizens of our country were exploited and denied the rewards of their increasing productivity. They were treated ruthlessly whenever they tried to organize. They were never reasonably protected against the revolutions in technology and global trade, NAFTA, or jobs being shipped overseas enabling corporations to increase the dividends paid to investors.
The New York Times’ David Johnston, noted that from 1980 (the year Ronald Reagan was elected) to 2005, the national economy, adjusted for inflation, more than doubled. Yet, the peak income year for 90 percent of Americans was way back in 1973, when the average income per taxpayer, in today’s dollars (adjusted for inflation), was $33,000. According to Johnston, that was nearly $4,000 higher than in 2005. This means that the average income for working Americans actually declined during the last 35 years. Men have done particularly worse because those who are now in their 30s – the prime age for raising families – earn less money than members of their fathers' generation did at the same age. What’s worse is during this economic downturn, men are losing their jobs at a much higher rate than their lower paid female counterparts.
So, why did so many in the middle class decide to live so high on the hog? It was not because incomes grew. It was because women entered the workplace in droves causing the average family to believe they could take on more debt in order to increase their standard of living. Now these hapless victims in the middle and working classes are watching their incomes shrink, jobs taken away, pensions disappear, and homes foreclosed on. Many are saddled with ever-increasing debt while they deal with the stress of trying to pay for gas and food price inflation.
Do not get me wrong – the majority of businesses seek only a fair profit to provide for and sustain their owners, employees, and share-holders, and are law-abiding and good citizens of their communities. But the largest ones, just like the East India Company of 1773 and the railroads of the 1880s, are out of control. These humongous corporations are threatening the very fabric of our nation, our society, and our world. They not only control our financial system, but also our daily lives, the food we eat, the water we drink, the air we breathe, the information we receive and therefore the thoughts in our head. They demand that we buy, buy, buy from them in a never-ending loop of subservient transfer of our capital, our time, and our freedoms directly into their coffers. Some of these corporations would kill for a dollar and destroy the world for an extra billion. Indeed, as you are reading this sentence many are doing just that, aided and abetted by conservative politicians and power-mongers all along the way.
At this point in time, with the economy likely to get worse for awhile, We the People have an opportunity to follow President Obama’s lead in reshaping our society, moving it toward a fairer, smarter, and more productive direction. The wealthy do not want that to happen, because it causes them to be less rich – maybe only worth a few million instead of many millions – which is why they are rooting so hard for President Barack Obama's initiatives to fail. They do not want to go back to the tax level they paid under Clinton and Bush I regardless of the fact that it was just 3% more. Most seem to have no understanding of the idea that “with wealth comes responsibility.” Many seem to not understand that they owe their allegiance and help to the country in which they made their millions. They apparently do not understand the word ‘sacrifice.’
Over the past 35 years the rich got richer while the rest of us barely treaded water. The only people who still have a more-or-less ‘normal life’ are in the upper middle classes and higher. Many of them truly do believe that they are privileged and the only ones who should own the Dream – to them we are serfs. The wealthy class, the corporate CEOs, many in the financial sector, would all love to do it all over again: dupe the middle class into paying the most taxes, etc, so they can hijack the American Dream for just themselves.
Tuesday, March 31, 2009
Tuesday, March 24, 2009
Nitpicking
It has become too easy for the media to try to make news with little context or perspective while the gullible public takes it all in and believes it. The media is leading the public, particularly those news commentators who believe that this will undermine President Obama. There is also a significant degree of pandering to the audience in order to increase ratings. They seem to believe that if the next story isn't about some even more outrageous than the AIG bonus then the audience will desert the network in droves.
Case in point: CNN has been running a headline, "Should Geithner Resign?" That is easier to make into news than, "Will Geithner's Plan to Have Government Join with Private Investors to Buy Distressed Assets from Banks Succeed?" But which one, in the end, is more important? But after today’s testimony before Congress and yesterday’s stock market run up when the Administration’s plan to buy the banks’ toxic assets, suddenly that headline disappeared. No longer is anyone calling for Geithner's head.
The latest cacophony in pundit circles comes hours after President Obama's appearance on 60 Minutes, where he cracked rueful jokes about the state of the economy and public sentiment over measures taken to save it all. The interview was pretty serious and somber, until Obama tried to lighten things up. "The only thing less popular than putting money into banks is putting money into the auto industry," he joked.
Steve Kroft, an interviewer who has had privileged access to President Obama stretching back to the start of his presidential bid, although also chuckling at the irony, questioned the cheery demeanor of a man who, at the end of a near disastrous week, should have been weighed down by the world.
"You're sitting here," Kroft said. "And you are laughing. You are laughing about some of these problems. Are people going to look at this and say, '... he's sitting there just making jokes about money'?"
Obama was not laughing about the problems and looked taken aback by Kroft’s statements: "No, no. There's got to be a little gallows humor to get you through the day. You know, sometimes my team talks about the fact that if you had said to us a year ago that - the least of my problems would be Iraq, which is still a pretty serious problem - I don't think anybody would have believed it.” Obama attributed his comments to "gallows humor."
For me, it was an example of "can-you-believe-this?" type of humor, which is understandable given the enormous challenges he faces. He was chuckling at the irony of it all. Anyone with half a brain would understand this.
But the Today show led its broadcast by asking if Obama's laughter was appropriate and publications ranging from the Chicago Sun-Times to the New York Daily News focused on his laughter in describing the interview instead of the substance of the interview.
It's the second time in days an Obama appearance has gotten more attention for perceived gaffes than for the substance. For example, Kroft noted in an aside that the government will eventually recover the money AIG pays in controversial bonuses by subtracting it from the next scheduled bailout payment. So doesn't that mean that, eventually, the government will ensure its money doesn't fund these bonuses? Shouldn't that get a more attention than Obama chuckling at the irony of the position he finds himself in?
President Obama has been criticized for being too grim by painting an economic picture that further exacerbates the nation's economic doldrums. Following the calls to "lighten up," he does so, and is criticized for not taking seriously the nation's pitiful economic state. How does he strike the elusive mid-point?
This nitpicking of Obama by the media seems unrelated to anything he's actually doing, fueled by the media's need to create an attention-getting story, the need to make news ‘interesting.’ It is also fueled by a desire of Obama’s critics to find something that will dent his massive popularity.
It's an odd situation: One moment, Obama is facing pointed questions from the media about doing too much. Then, when he travels to California to drum up support for his economic programs, he gets criticized for leaving the White House when he should be working on the economy. He gets criticized for being too grim about the economy, and then gets criticized for using humor.
So is he working too much, or not enough? Is he too grim, or too light-hearted?
It is apparently easier for Obama’s critics to nitpick about a moment of laughter than to offer serious discussion of the ideas contained in the nearly half hour interview aired on 60 Minutes.
Case in point: CNN has been running a headline, "Should Geithner Resign?" That is easier to make into news than, "Will Geithner's Plan to Have Government Join with Private Investors to Buy Distressed Assets from Banks Succeed?" But which one, in the end, is more important? But after today’s testimony before Congress and yesterday’s stock market run up when the Administration’s plan to buy the banks’ toxic assets, suddenly that headline disappeared. No longer is anyone calling for Geithner's head.
The latest cacophony in pundit circles comes hours after President Obama's appearance on 60 Minutes, where he cracked rueful jokes about the state of the economy and public sentiment over measures taken to save it all. The interview was pretty serious and somber, until Obama tried to lighten things up. "The only thing less popular than putting money into banks is putting money into the auto industry," he joked.
Steve Kroft, an interviewer who has had privileged access to President Obama stretching back to the start of his presidential bid, although also chuckling at the irony, questioned the cheery demeanor of a man who, at the end of a near disastrous week, should have been weighed down by the world.
"You're sitting here," Kroft said. "And you are laughing. You are laughing about some of these problems. Are people going to look at this and say, '... he's sitting there just making jokes about money'?"
Obama was not laughing about the problems and looked taken aback by Kroft’s statements: "No, no. There's got to be a little gallows humor to get you through the day. You know, sometimes my team talks about the fact that if you had said to us a year ago that - the least of my problems would be Iraq, which is still a pretty serious problem - I don't think anybody would have believed it.” Obama attributed his comments to "gallows humor."
For me, it was an example of "can-you-believe-this?" type of humor, which is understandable given the enormous challenges he faces. He was chuckling at the irony of it all. Anyone with half a brain would understand this.
But the Today show led its broadcast by asking if Obama's laughter was appropriate and publications ranging from the Chicago Sun-Times to the New York Daily News focused on his laughter in describing the interview instead of the substance of the interview.
It's the second time in days an Obama appearance has gotten more attention for perceived gaffes than for the substance. For example, Kroft noted in an aside that the government will eventually recover the money AIG pays in controversial bonuses by subtracting it from the next scheduled bailout payment. So doesn't that mean that, eventually, the government will ensure its money doesn't fund these bonuses? Shouldn't that get a more attention than Obama chuckling at the irony of the position he finds himself in?
President Obama has been criticized for being too grim by painting an economic picture that further exacerbates the nation's economic doldrums. Following the calls to "lighten up," he does so, and is criticized for not taking seriously the nation's pitiful economic state. How does he strike the elusive mid-point?
This nitpicking of Obama by the media seems unrelated to anything he's actually doing, fueled by the media's need to create an attention-getting story, the need to make news ‘interesting.’ It is also fueled by a desire of Obama’s critics to find something that will dent his massive popularity.
It's an odd situation: One moment, Obama is facing pointed questions from the media about doing too much. Then, when he travels to California to drum up support for his economic programs, he gets criticized for leaving the White House when he should be working on the economy. He gets criticized for being too grim about the economy, and then gets criticized for using humor.
So is he working too much, or not enough? Is he too grim, or too light-hearted?
It is apparently easier for Obama’s critics to nitpick about a moment of laughter than to offer serious discussion of the ideas contained in the nearly half hour interview aired on 60 Minutes.
Monday, March 23, 2009
The larger problem with AIG
Yes, A.I.G. executives were acting like pigs when they accepted millions of dollars in bonuses to executives after receiving billions in taxpayer money to keep from going bankrupt. ‘Populist’ anger came to a head last week over the A.I.G. bonuses. But the White House said using tax law to pry bonuses from bailed-out company executives is "a dangerous way to go."
This is not the way to do it. Who is to say that after taxing those greedy AIG execs, Congress wouldn’t take aim at any citizen with which it becomes angry and tax them into the ground as punishment? The tax code should never be used as punishment.
While acknowledging public outrage over $165 million in bonuses paid by a financial firm that just months earlier had turned to taxpayers for aid, the administration's economic advisers said President Barack Obama wouldn't govern out of anger. Several GOP senators on Sunday advised against the mob mentality that has Congress "grabbing its pitchforks and charging up the hill" in pursuit of the cash.
The House bill may have some problems in going too far in terms of legal issues, constitutional validity, using the tax code to surgically punish a small group. White House economic adviser Austen Goolsbee said Sunday that Obama understands the anger and that the best thing would be for AIG executives to return the bonuses. He also indicated that the president will look at what comes out of the House and what comes out of the Senate to see what ideas are there.
Obama's economic team said the president does not embrace this legislation. Vice President Joe Biden's economic adviser, Jared Bernstein, criticized the House plan as it headed to the Senate, where it was likely to be modified with bipartisan backing. Republicans and Senate Democrats seemed to line up with the president's policy team. For example, Republican Senator Judd Gregg said, "People are disgusted and outraged, as they should be, but let's not overreact in a way that basically has the Congress abusing the authority to tax its people."
Using the tax system to punish anyone is a bad precedent to set.
But there is a much bigger issue that has barely been touched upon by Congress, the media, or the public: the way tens of billions of dollars of taxpayers’ money has been funneled to A.I.G. counterparts – at 100 cents on the dollar. It does not make sense that Goldman Sachs, Bank of America, Citigroup and every other company that bought credit default swaps from AIG should be made whole by the government? Why isn’t Congress forcing them to take a cut?
What’s worse, some of those companies are foreign banks that used credit default swaps to exploit a regulatory loophole. Should the United States taxpayer really be responsible for ensuring the safety of European banks that were taking advantage of European regulations?
The person who has made this point most forcefully is Eliot Spitzer. In his column for Slate.com, he wrote: “Why did Goldman have to get back 100 cents on the dollar? Didn’t we already give Goldman a $25 billion cash infusion, and aren’t they sitting on more than $100 billion in cash?”
Mr. Spitzer also said that while “there is a legitimate sense of outrage over the bonuses, the larger outrage should be the use of AIG funding as a second bailout for the large investment houses.”
That is precisely my point. Those banks should also have to give back the money AIG gave them.
This is not the way to do it. Who is to say that after taxing those greedy AIG execs, Congress wouldn’t take aim at any citizen with which it becomes angry and tax them into the ground as punishment? The tax code should never be used as punishment.
While acknowledging public outrage over $165 million in bonuses paid by a financial firm that just months earlier had turned to taxpayers for aid, the administration's economic advisers said President Barack Obama wouldn't govern out of anger. Several GOP senators on Sunday advised against the mob mentality that has Congress "grabbing its pitchforks and charging up the hill" in pursuit of the cash.
The House bill may have some problems in going too far in terms of legal issues, constitutional validity, using the tax code to surgically punish a small group. White House economic adviser Austen Goolsbee said Sunday that Obama understands the anger and that the best thing would be for AIG executives to return the bonuses. He also indicated that the president will look at what comes out of the House and what comes out of the Senate to see what ideas are there.
Obama's economic team said the president does not embrace this legislation. Vice President Joe Biden's economic adviser, Jared Bernstein, criticized the House plan as it headed to the Senate, where it was likely to be modified with bipartisan backing. Republicans and Senate Democrats seemed to line up with the president's policy team. For example, Republican Senator Judd Gregg said, "People are disgusted and outraged, as they should be, but let's not overreact in a way that basically has the Congress abusing the authority to tax its people."
Using the tax system to punish anyone is a bad precedent to set.
But there is a much bigger issue that has barely been touched upon by Congress, the media, or the public: the way tens of billions of dollars of taxpayers’ money has been funneled to A.I.G. counterparts – at 100 cents on the dollar. It does not make sense that Goldman Sachs, Bank of America, Citigroup and every other company that bought credit default swaps from AIG should be made whole by the government? Why isn’t Congress forcing them to take a cut?
What’s worse, some of those companies are foreign banks that used credit default swaps to exploit a regulatory loophole. Should the United States taxpayer really be responsible for ensuring the safety of European banks that were taking advantage of European regulations?
The person who has made this point most forcefully is Eliot Spitzer. In his column for Slate.com, he wrote: “Why did Goldman have to get back 100 cents on the dollar? Didn’t we already give Goldman a $25 billion cash infusion, and aren’t they sitting on more than $100 billion in cash?”
Mr. Spitzer also said that while “there is a legitimate sense of outrage over the bonuses, the larger outrage should be the use of AIG funding as a second bailout for the large investment houses.”
That is precisely my point. Those banks should also have to give back the money AIG gave them.
Sunday, March 22, 2009
What is your motivation?
Some passages in the Bible, mostly the Old Testament, imply that one is saved through good works. That is, God weighs the good and bad deeds that each person commits during their lifetime. If the balance is reasonably positive, the individual goes to heaven. Other passages in the Bible imply that one is saved solely on the basis of one's faith. If the believer confesses sins, is genuinely repentant, and trusts Jesus, then he or she will be saved. In this case, good works and deeds can be expected as a logical consequence of having first been saved. This is mostly supported in the New Testament and a tenent of most Protestant faiths.
But, whatever you believe about salvation, whether good works are necessary for salvation or a fruit of salvation, do you do these things because people are watching or do you act the way you do because you are solely concerned with serving God?
A few nights ago there was a story on the local news about a “club” or “society” holding an auction for charity. It works like this: various members of the club donate items to be auctioned off and the proceeds are turned over to charity after money is taken out to pay for expenses, which includes tables of wonderful food, drinks, and sometimes a band. The charity is used as an excuse to have a big to-do.
Mostly in my single days, I attended various parties, picnics, museum shows, auctions, and balls given in the name of charity. The price of admission is given to the selected charity, after expenses, yet in the meantime, the participants, dressed to the hilt, are there to see and be seen. I knew some of the attendees – most of them did not really care about the actual charity or the people who were to be helped. Knowing that fact and feeling uncomfortable with the public show of “piety,” I eventually ended my membership in a particular society (club) and quit going to these events, opting, instead, to write checks directly to the charities of my choice.
Jesus often spoke of public piety. The gospel of Matthew, Chapter 6, begins with the words, “Be careful” or in some versions of the Bible it says "Beware." In Matthew, Chapter 6, Jesus is telling the disciples that they are to be very cautious when it comes to the motivation behind their good works. Improper motivation behind good works was a common and serious problem in that time - just as it is today.
Jesus first describes the hypocritical acts of piety, showing how artificial, phony and ostentatious false piety is. Then He tells the disciples the proper way that piety expresses itself. Further, each of the three sections contains verbatim, and almost identical, important phrases for emphasis: “they have received their reward in full,” also “done in secret,” or “who sees what is done in secret.”
Here are the specific verses from Matthew 6:1-8 and 16-18 of which I am speaking:
"Be careful not to do your 'acts of righteousness' before men, to be seen by them. If you do, you will have no reward from your Father in heaven. So when you give to the needy, do not announce it with trumpets, as the hypocrites do in the synagogues and on the streets, to be honored by men. I tell you the truth; they have received their reward in full."
“But when you give to the needy, do not let your left hand know what your right hand is doing, so that your giving may be in secret. Then your Father, who sees what is done in secret, will reward you. And when you pray, do not be like the hypocrites, for they love to pray standing in the [churches] and on the street corners to be seen by men. I tell you the truth, they have received their reward in full.”
"But when you pray, go into your room, close the door and pray to your Father, who is unseen [spirit]. Then your Father, who sees what is done in secret, will reward you. And when you pray, do not keep on babbling like pagans, for they think they will be heard because of their many words. Do not be like them, for your Father knows what you need before you ask him."
"When you fast, do not look somber as the hypocrites do, for they disfigure their faces to show men they are fasting. I tell you the truth, they have received their reward in full. But when you fast, put oil on your head and wash your face, so that it will not be obvious to men that you are fasting, but only to your Father, who is unseen [spirit]; and your Father, who sees what is done in secret, will reward you."
These verses show that Jesus is very concerned with shows of piety. The three forms of piety he described are: good works or charity directed toward man, our approach to God in prayer, and self-sanctification. Many Jews of that day had turned these things into acts of self-promotion and self-exaltation. Charitable deeds were announced so that the giver would receive credit or praise from mankind. Prayers were done in public so that everyone would know how religious the person was. Similarly, men who fasted let everyone know the pain they endured to receive glory from men.
The central problem behind these very public acts of piety is the fact that they are not done out of a genuine desire to please God and be faithful to Him, but rather to gain standing before men. Jesus forces us to examine our hearts to look to the motivation behind our charitable acts. Although most religions speak of charity as steps toward salvation, Christianity views them as fruits of a redemption already achieved through Christ.
The philosophy of this world tells us the very opposite of what Jesus says. It says that man’s chief end is to seek happiness or personal fulfillment or self-esteem. When men do good works to be seen by men they are really seeking to please themselves or their own ego by glorifying self. Paul taught the same principle when he said that all of our obedience, even under the eye of men, must be done with sincerity or literally singleness of heart to Christ (Eph. 6:5). There should be no ulterior motive, false pretense, or egotism involved in charitable works.
“How can you believe, who receive honor from one another, and do not seek the honor that comes from the only God?” (John 5:44).
Matthew 6 speaks against man-made rituals which includes, in my opinion, the man-pleasing entertainment of the church's “praise movement” where most of the congregation stands, some raising hands in ‘praise’, some shedding tears, while the band on stage puts on a ‘praise’ show. Think for a moment what church services would be like today if the central motive was not to please men but, instead, to please God. All the pomp and ceremony of modern worship would disappear.
Jesus also said “Let your light so shine before men, that they may see your good works and glorify your Father in heaven” (Matthew 5:16). In chapter six Jesus tells the disciples that their good works must be done in secret, while in chapter five He tells them that the light of their works must not be hidden under a basket, but placed on a lamp stand so men can see these works.
Is this a contradiction? No, it is not – for the following reason:
Each of these teachings is speaking to separate issues. In the first the Savior is warning against cowardice because the disciples’ job is to spread the gospel of Christ in a fallen world. This requires courage and good works that are in public. In the second teaching Jesus is not dealing with courage, but self-exaltation or improper motives. He speaks against attracting attention to oneself in order to glorify oneself. A charitable deed should not be advertised by the one performing the deed. A charitable deed does not necessarily mean you are of good character, either. It depends on your motivation. God sees your character every day, who you are and what you do, when you think no one is looking.
Our charitable work should be done for God alone. To see and be seen by society or by fellow church members should not be the motivation.
So, just what is your motivation for your charitable works?
But, whatever you believe about salvation, whether good works are necessary for salvation or a fruit of salvation, do you do these things because people are watching or do you act the way you do because you are solely concerned with serving God?
A few nights ago there was a story on the local news about a “club” or “society” holding an auction for charity. It works like this: various members of the club donate items to be auctioned off and the proceeds are turned over to charity after money is taken out to pay for expenses, which includes tables of wonderful food, drinks, and sometimes a band. The charity is used as an excuse to have a big to-do.
Mostly in my single days, I attended various parties, picnics, museum shows, auctions, and balls given in the name of charity. The price of admission is given to the selected charity, after expenses, yet in the meantime, the participants, dressed to the hilt, are there to see and be seen. I knew some of the attendees – most of them did not really care about the actual charity or the people who were to be helped. Knowing that fact and feeling uncomfortable with the public show of “piety,” I eventually ended my membership in a particular society (club) and quit going to these events, opting, instead, to write checks directly to the charities of my choice.
Jesus often spoke of public piety. The gospel of Matthew, Chapter 6, begins with the words, “Be careful” or in some versions of the Bible it says "Beware." In Matthew, Chapter 6, Jesus is telling the disciples that they are to be very cautious when it comes to the motivation behind their good works. Improper motivation behind good works was a common and serious problem in that time - just as it is today.
Jesus first describes the hypocritical acts of piety, showing how artificial, phony and ostentatious false piety is. Then He tells the disciples the proper way that piety expresses itself. Further, each of the three sections contains verbatim, and almost identical, important phrases for emphasis: “they have received their reward in full,” also “done in secret,” or “who sees what is done in secret.”
Here are the specific verses from Matthew 6:1-8 and 16-18 of which I am speaking:
"Be careful not to do your 'acts of righteousness' before men, to be seen by them. If you do, you will have no reward from your Father in heaven. So when you give to the needy, do not announce it with trumpets, as the hypocrites do in the synagogues and on the streets, to be honored by men. I tell you the truth; they have received their reward in full."
“But when you give to the needy, do not let your left hand know what your right hand is doing, so that your giving may be in secret. Then your Father, who sees what is done in secret, will reward you. And when you pray, do not be like the hypocrites, for they love to pray standing in the [churches] and on the street corners to be seen by men. I tell you the truth, they have received their reward in full.”
"But when you pray, go into your room, close the door and pray to your Father, who is unseen [spirit]. Then your Father, who sees what is done in secret, will reward you. And when you pray, do not keep on babbling like pagans, for they think they will be heard because of their many words. Do not be like them, for your Father knows what you need before you ask him."
"When you fast, do not look somber as the hypocrites do, for they disfigure their faces to show men they are fasting. I tell you the truth, they have received their reward in full. But when you fast, put oil on your head and wash your face, so that it will not be obvious to men that you are fasting, but only to your Father, who is unseen [spirit]; and your Father, who sees what is done in secret, will reward you."
These verses show that Jesus is very concerned with shows of piety. The three forms of piety he described are: good works or charity directed toward man, our approach to God in prayer, and self-sanctification. Many Jews of that day had turned these things into acts of self-promotion and self-exaltation. Charitable deeds were announced so that the giver would receive credit or praise from mankind. Prayers were done in public so that everyone would know how religious the person was. Similarly, men who fasted let everyone know the pain they endured to receive glory from men.
The central problem behind these very public acts of piety is the fact that they are not done out of a genuine desire to please God and be faithful to Him, but rather to gain standing before men. Jesus forces us to examine our hearts to look to the motivation behind our charitable acts. Although most religions speak of charity as steps toward salvation, Christianity views them as fruits of a redemption already achieved through Christ.
The philosophy of this world tells us the very opposite of what Jesus says. It says that man’s chief end is to seek happiness or personal fulfillment or self-esteem. When men do good works to be seen by men they are really seeking to please themselves or their own ego by glorifying self. Paul taught the same principle when he said that all of our obedience, even under the eye of men, must be done with sincerity or literally singleness of heart to Christ (Eph. 6:5). There should be no ulterior motive, false pretense, or egotism involved in charitable works.
“How can you believe, who receive honor from one another, and do not seek the honor that comes from the only God?” (John 5:44).
Matthew 6 speaks against man-made rituals which includes, in my opinion, the man-pleasing entertainment of the church's “praise movement” where most of the congregation stands, some raising hands in ‘praise’, some shedding tears, while the band on stage puts on a ‘praise’ show. Think for a moment what church services would be like today if the central motive was not to please men but, instead, to please God. All the pomp and ceremony of modern worship would disappear.
Jesus also said “Let your light so shine before men, that they may see your good works and glorify your Father in heaven” (Matthew 5:16). In chapter six Jesus tells the disciples that their good works must be done in secret, while in chapter five He tells them that the light of their works must not be hidden under a basket, but placed on a lamp stand so men can see these works.
Is this a contradiction? No, it is not – for the following reason:
Each of these teachings is speaking to separate issues. In the first the Savior is warning against cowardice because the disciples’ job is to spread the gospel of Christ in a fallen world. This requires courage and good works that are in public. In the second teaching Jesus is not dealing with courage, but self-exaltation or improper motives. He speaks against attracting attention to oneself in order to glorify oneself. A charitable deed should not be advertised by the one performing the deed. A charitable deed does not necessarily mean you are of good character, either. It depends on your motivation. God sees your character every day, who you are and what you do, when you think no one is looking.
Our charitable work should be done for God alone. To see and be seen by society or by fellow church members should not be the motivation.
So, just what is your motivation for your charitable works?
Thursday, March 19, 2009
The media wants it right now
President Obama has been in office for about two months. Yet for the past two weeks, much of the media has been suggesting that the Obama presidency is a failure because he didn't come into office, wave his wand, and cure all the problems that took Bush and the Republicans eight long years to build. The media wants everything fixed now. They want the economy to be fixed now. So, in trying to make news instead of just reporting news, they are saying things like: he is doing too much at once, he is not doing enough, he’s moving too fast, he’s moving too slowly, his staff is making too many errors, and on and on and on.
No matter what your personal opinion is of Obama, you have to admire his courage. He is doing what he thinks is right for this country, resetting its priorities for years to come, even if it means he only serves one term as president. He has said many times that if his policies do not work, he realizes that he will be voted out in 2012. Yet he moves ahead with what he sincerely believes is right for the country instead of what would be politically safe for him. It is rare that a politician would do this. I have heard him say more than once that he would rather be a good president for only four years than to be a politically-correct, mediocre president for eight years.
What the Washington political circles and the media do not understand is that what matters most to them is not the same thing as what matters most to average Americans. When it comes to judging Obama, the political and media groups are more interested in who seems to be winning or losing on a day-to-day or even a moment-by-moment basis. The pundits on Fox News, CNN, and other news programs are increasingly finding fault with Obama, although the public still likes him and believes in his policies. The average American takes a broader look at the man, focusing on whether he is really trying to make their lives better.
Obama seems well aware that even if the pundits are quickly growing disillusioned with him, the public is still taking a longer view. Last week he reminded the media that "there are no shortcuts to long-term economic growth, and we can't just keep on doing the same things we were doing before and somehow expect that all of our problems will be solved. We've been in office all of seven weeks so far. This is a crisis that was eight years in the making, maybe longer in certain aspects of it," he said. "…it’s going to take some time, and the truth of the matter is the American people, I think, understand that it's going to take some time. Keep in mind it's only been two weeks since I gave a joint session speech to Congress, the day after which everybody said, 'Boy, that was really clear.' ...The reviews were pretty good....”
Obama has signaled many times that he has no intention of backing off. He framed his administration's priorities as an urgent matter of solving problems that have been too-long delayed. Obama said his ambitious goals in such areas as education, health care, and energy policy are essential to laying the foundations for long-term growth. He said, "I think that extraordinary times call for extraordinary measures. Yes, they require some uncomfortable votes. If it was easy, I'm assuming it would have been done 20 years ago or 30 years ago. It's not easy [politically], but it's the right thing to do. ....The days of growing the economy through an overheated housing market or through people running up exorbitant credit cards bills are over. We've got to put our growth model on a different footing.”
The media’s impatience is not the only problem. There is the problem of Republican lock-step ‘just say no’ to everything, with Cantor or Boehner, often surrounded by a group of Republicans, making statements every time they think they have found something with which to make the president look bad. They are trying to rebuild their own party by tearing him down. They have not publicly said they want him to fail, but they seem to be doing all they can to make him fail. President Obama has challenged these Republican critics to do more than just say no:
"I think what will be interesting is the degree to which my Republican colleagues start putting forward an affirmative agenda that's not based on ideology but on the very real struggles and pain that people are feeling right now around the country and how do we get this economy back on its feet. …Opposition is always easy. Saying no to something is easy. Saying yes to something and figuring out how to solve problems and governing, that's hard. On the budget debate, for example, you've got people who say, 'We want to bring down the long-term deficit, but we don't want to cut certain programs that are important. Oh, and by the way we don't want to raise taxes...well, show me how you're going to do it."
Then there is the growing concern by some moderate Democrats about the President’s agenda for comprehensive health care reform, a major push toward renewable energy, and an overhaul of tax policy being done at the same time he is dealing with the biggest economic crisis in a generation. They are so afraid that Obama could fail from “trying to do too much at once” and possibly causing them to lose their seats in the next election that they have become less concerned with policy changes that really would raise all boats. These Democrats are cowards.
Obama has acknowledged people’s concerns about his plans to rescue the nation's economy. "I think the one area where there's still significant uncertainty has to do with the banks, and that's obviously a particular concern to Wall Street," he said. "The challenge for us there is ... we're in the process of conducting the stress tests for the banks, to get a better sense of where their capital positions are and how strong they are. And we don't want to prejudge those tests or make a lot of statements that cause a lot of nervousness around banks that are already having difficulty."
In other words, this will take some time. Be patient.
“Whether we're talking about Republicans or my fellow Democrats, my argument is going to be that these are the right priorities for America, these are the right priorities for long-term economic growth,” Obama said.
Kevin Diaz writes in the Minneapolis Star Tribune regarding Obama’s latest press briefing: "Speaking slowly and deliberately, like the college professor he was, Obama made clear that his administration is in its infancy and that he still has the public on his side.... For early signs of hope, Obama pointed to his new housing plan to provide relief to homeowners facing foreclosure. 'You're already starting to see an uptick in refinancing that is providing families with relief,' he said. 'And in certain pockets of the country, you're starting to see housing prices stabilize after a long drop.
Washington is so full of people who believe that governing is a win-lose proposition that they seem unable to do what is right for this country. Obama said he had expected battles in Congress over his budget, but rebutted GOP assertions that the ambitious initiative represented a drastic lurch to the left. “For them to suggest that this was some radical assault on the rich makes no sense whatsoever,' Obama said, noting that a significant portion of the budget's tax increases - rescinding former President George W. Bush's tax cuts for more affluent taxpayers - had already been anticipated in Bush administration budgets." These Republicans are hypocrites. They were actually planning to do the same thing because it is fiscally necessary.
Most of us in the heartland are willing to wait for long term results – unlike the pundits who want all the problems solved right now or else they will declare Obama’s presidency a failure. They obviously feel a need to make news - as if there isn’t enough news already out there.
No matter what your personal opinion is of Obama, you have to admire his courage. He is doing what he thinks is right for this country, resetting its priorities for years to come, even if it means he only serves one term as president. He has said many times that if his policies do not work, he realizes that he will be voted out in 2012. Yet he moves ahead with what he sincerely believes is right for the country instead of what would be politically safe for him. It is rare that a politician would do this. I have heard him say more than once that he would rather be a good president for only four years than to be a politically-correct, mediocre president for eight years.
What the Washington political circles and the media do not understand is that what matters most to them is not the same thing as what matters most to average Americans. When it comes to judging Obama, the political and media groups are more interested in who seems to be winning or losing on a day-to-day or even a moment-by-moment basis. The pundits on Fox News, CNN, and other news programs are increasingly finding fault with Obama, although the public still likes him and believes in his policies. The average American takes a broader look at the man, focusing on whether he is really trying to make their lives better.
Obama seems well aware that even if the pundits are quickly growing disillusioned with him, the public is still taking a longer view. Last week he reminded the media that "there are no shortcuts to long-term economic growth, and we can't just keep on doing the same things we were doing before and somehow expect that all of our problems will be solved. We've been in office all of seven weeks so far. This is a crisis that was eight years in the making, maybe longer in certain aspects of it," he said. "…it’s going to take some time, and the truth of the matter is the American people, I think, understand that it's going to take some time. Keep in mind it's only been two weeks since I gave a joint session speech to Congress, the day after which everybody said, 'Boy, that was really clear.' ...The reviews were pretty good....”
Obama has signaled many times that he has no intention of backing off. He framed his administration's priorities as an urgent matter of solving problems that have been too-long delayed. Obama said his ambitious goals in such areas as education, health care, and energy policy are essential to laying the foundations for long-term growth. He said, "I think that extraordinary times call for extraordinary measures. Yes, they require some uncomfortable votes. If it was easy, I'm assuming it would have been done 20 years ago or 30 years ago. It's not easy [politically], but it's the right thing to do. ....The days of growing the economy through an overheated housing market or through people running up exorbitant credit cards bills are over. We've got to put our growth model on a different footing.”
The media’s impatience is not the only problem. There is the problem of Republican lock-step ‘just say no’ to everything, with Cantor or Boehner, often surrounded by a group of Republicans, making statements every time they think they have found something with which to make the president look bad. They are trying to rebuild their own party by tearing him down. They have not publicly said they want him to fail, but they seem to be doing all they can to make him fail. President Obama has challenged these Republican critics to do more than just say no:
"I think what will be interesting is the degree to which my Republican colleagues start putting forward an affirmative agenda that's not based on ideology but on the very real struggles and pain that people are feeling right now around the country and how do we get this economy back on its feet. …Opposition is always easy. Saying no to something is easy. Saying yes to something and figuring out how to solve problems and governing, that's hard. On the budget debate, for example, you've got people who say, 'We want to bring down the long-term deficit, but we don't want to cut certain programs that are important. Oh, and by the way we don't want to raise taxes...well, show me how you're going to do it."
Then there is the growing concern by some moderate Democrats about the President’s agenda for comprehensive health care reform, a major push toward renewable energy, and an overhaul of tax policy being done at the same time he is dealing with the biggest economic crisis in a generation. They are so afraid that Obama could fail from “trying to do too much at once” and possibly causing them to lose their seats in the next election that they have become less concerned with policy changes that really would raise all boats. These Democrats are cowards.
Obama has acknowledged people’s concerns about his plans to rescue the nation's economy. "I think the one area where there's still significant uncertainty has to do with the banks, and that's obviously a particular concern to Wall Street," he said. "The challenge for us there is ... we're in the process of conducting the stress tests for the banks, to get a better sense of where their capital positions are and how strong they are. And we don't want to prejudge those tests or make a lot of statements that cause a lot of nervousness around banks that are already having difficulty."
In other words, this will take some time. Be patient.
“Whether we're talking about Republicans or my fellow Democrats, my argument is going to be that these are the right priorities for America, these are the right priorities for long-term economic growth,” Obama said.
Kevin Diaz writes in the Minneapolis Star Tribune regarding Obama’s latest press briefing: "Speaking slowly and deliberately, like the college professor he was, Obama made clear that his administration is in its infancy and that he still has the public on his side.... For early signs of hope, Obama pointed to his new housing plan to provide relief to homeowners facing foreclosure. 'You're already starting to see an uptick in refinancing that is providing families with relief,' he said. 'And in certain pockets of the country, you're starting to see housing prices stabilize after a long drop.
Washington is so full of people who believe that governing is a win-lose proposition that they seem unable to do what is right for this country. Obama said he had expected battles in Congress over his budget, but rebutted GOP assertions that the ambitious initiative represented a drastic lurch to the left. “For them to suggest that this was some radical assault on the rich makes no sense whatsoever,' Obama said, noting that a significant portion of the budget's tax increases - rescinding former President George W. Bush's tax cuts for more affluent taxpayers - had already been anticipated in Bush administration budgets." These Republicans are hypocrites. They were actually planning to do the same thing because it is fiscally necessary.
Most of us in the heartland are willing to wait for long term results – unlike the pundits who want all the problems solved right now or else they will declare Obama’s presidency a failure. They obviously feel a need to make news - as if there isn’t enough news already out there.
Tuesday, March 17, 2009
A.I.G. is a P.I.G.
Last fall, Hank Paulson (Bush administration) originally said it would cost $85 billion to save AIG. AIG's $150 billion federal rescue package, as revamped and expanded last November, included $40 billion from the TARP's Systemically Significant Failing Institutions Program, which purchased perpetual preferred shares in the company and warrants equal to 2% of issued and outstanding shares. The Federal Reserve Bank of New York, which provided the remaining $110 billion loan and liquidity package, holds warrants for nearly 80% of the company's equity.
Now, AIG has come under fire for doling out $165 million in bonuses to some employees after accepting huge government bailouts. The company also sent billions of dollars it owed to banks in other countries as well as to American companies such as Goldman Sachs.
NOTE: The New York Times published a shocking story about how the SEC was lobbied in 2004 by the nation's five largest investment banks to change a regulation that limited the amount of debt they could take on. The exemption unshackled billions of dollars held in reserve as a cushion against losses on their investments, and led to the unraveling of the financial sector. Among the five banks leading the charge to change the rule was Goldman Sachs.
While the government controls an 80 percent equity stake in AIG, it supposedly does not have the legal authority to freeze the payments. Instead, the government says it will reign in AIG spending on the $30 billion more AIG received in additional TARP funds. Meanwhile, New York Attorney General Andrew Cuomo subpoenaed AIG in his latest round of investigations into Wall Street compensation. Cuomo is likely looking for some dirt on the roughly $55 million AIG previously paid out to the financial products unit, under its $450 million retention program.
The following is a copy of the March 17 letter New York Attorney General Andrew Cuomo sent to Rep. Barney Frank:
Dear Chairman Frank:
I am writing to provide you and your Committee with information regarding an ongoing investigation my Office has been conducting of executive compensation at American International Group (AIG). I hope this information will be useful to the Committee at its hearing on AIG tomorrow.
We learned over the weekend that AIG had, last Friday, distributed more than $160 million in retention payments to members of its Financial Products Subsidiary, the unit of AIG that was principally responsible for the firm's meltdown. Last October, AIG agreed to my Office's demand that no payments be made out of its $600 million Financial Products deferred compensation pool. While this was a positive step, we were dismayed to learn after the fact that AIG had made multi-million dollar payments out of its separate Financial Products retention plan on Friday.
AIG now claims that it had no choice but to pay these sums because of the unalterable terms of the plan. However, had the federal government not bailed out AIG with billions in taxpayer funds, the firm likely would have gone bankrupt, and surely no payments would have been made out of the plan. My Office has reviewed the legal opinion that AIG obtained from its own counsel, and it is not at all clear that these lawyers even considered the argument that it is only by the grace of American taxpayers that members of Financial Products even have jobs, let alone a pool of retention bonus money. I hope the Committee will take up this issue at its hearing tomorrow.
Furthermore, we know that AIG was able to bargain with its Financial Products employees since these employees have agreed to take salaries of $ I for 2009 in exchange for receiving their retention bonus packages. The fact that AIG engaged in this negotiation flies in the face of AIG's assertion that it had no choice but to make these lavish multi-million dollar bonus payments. It appears that AIG had far more leverage than they now claim.
AIG also claims that retention of individuals at Financial Products was vital to unwinding the subsidiary's business. However, to date, AIG has been unwilling to disclose the names of those who received these retention payments making it impossible to test their claim. Moreover, as detailed below, numerous individuals who received large "retention" bonuses are no longer at the firm. Until we obtain the names of these individuals, it is impossible to determine when and why they left the firm and how it is that they received these payments.
If AIG were confident in its claim that those who received these large bonuses were so vital to the orderly unwinding of the unit, one would expect them to freely provide the names and positions of those who got these bonuses. My Office will continue to seek an explanation for why each one of these individuals was so crucial to keep aboard that they were paid handsomely despite the unit's disastrous performance.
As you may know, my Office yesterday subpoenaed AIG for the names of those who received these bonuses, and we plan to do everything necessary to enforce compliance. American taxpayers deserve to know where their money is going, and AIG's intransigence and desire to obscure who received these payments should not be tolerated. Already my Office has determined that some of these bonuses were staggering in size. For example:
-- The top recipient received more than $6.4 million;
-- The top seven bonus recipients received more than $4 million each;
-- The top ten bonus recipients received a combined $42 million;
-- 22 individuals received bonuses of $2 million or more, and combined they received more than $72 million;
-- 73 individuals received bonuses of $1 million or more; and
-- Eleven of the individuals who received "retention" bonuses of $1 million or more are no longer working at AIG, including one who received $4.6 million;
Again, these payments were all made to individuals in the subsidiary whose performance led to crushing losses and the near failure of AIG. Thus, last week, AIG made more than 73 millionaires in the unit which lost so much money that it brought the firm to its knees, forcing a taxpayer bailout. Something is deeply wrong with this outcome. I hope the Committee will address it head on.
We have also now obtained the contracts under which AIG decided to make these payments. The contracts shockingly contain a provision that required most individuals' bonuses to be 100% of their 2007 bonuses. Thus, in the Spring of last year, AIG chose to lock in bonuses for 2008 at 2007 levels despite obvious signs that 2008 performance would be disastrous in comparison to the year before. My Office has thus begun to closely examine the circumstances under which the plan was created.
I look forward to continuing to cooperate with the Committee in any way possible to ensure that taxpayer funds are not misspent on unjustified bonuses or otherwise misused.
Very truly yours,
Andrew M. Cuomo
Attorney General of the State of New York
Now, AIG has come under fire for doling out $165 million in bonuses to some employees after accepting huge government bailouts. The company also sent billions of dollars it owed to banks in other countries as well as to American companies such as Goldman Sachs.
NOTE: The New York Times published a shocking story about how the SEC was lobbied in 2004 by the nation's five largest investment banks to change a regulation that limited the amount of debt they could take on. The exemption unshackled billions of dollars held in reserve as a cushion against losses on their investments, and led to the unraveling of the financial sector. Among the five banks leading the charge to change the rule was Goldman Sachs.
While the government controls an 80 percent equity stake in AIG, it supposedly does not have the legal authority to freeze the payments. Instead, the government says it will reign in AIG spending on the $30 billion more AIG received in additional TARP funds. Meanwhile, New York Attorney General Andrew Cuomo subpoenaed AIG in his latest round of investigations into Wall Street compensation. Cuomo is likely looking for some dirt on the roughly $55 million AIG previously paid out to the financial products unit, under its $450 million retention program.
The following is a copy of the March 17 letter New York Attorney General Andrew Cuomo sent to Rep. Barney Frank:
Dear Chairman Frank:
I am writing to provide you and your Committee with information regarding an ongoing investigation my Office has been conducting of executive compensation at American International Group (AIG). I hope this information will be useful to the Committee at its hearing on AIG tomorrow.
We learned over the weekend that AIG had, last Friday, distributed more than $160 million in retention payments to members of its Financial Products Subsidiary, the unit of AIG that was principally responsible for the firm's meltdown. Last October, AIG agreed to my Office's demand that no payments be made out of its $600 million Financial Products deferred compensation pool. While this was a positive step, we were dismayed to learn after the fact that AIG had made multi-million dollar payments out of its separate Financial Products retention plan on Friday.
AIG now claims that it had no choice but to pay these sums because of the unalterable terms of the plan. However, had the federal government not bailed out AIG with billions in taxpayer funds, the firm likely would have gone bankrupt, and surely no payments would have been made out of the plan. My Office has reviewed the legal opinion that AIG obtained from its own counsel, and it is not at all clear that these lawyers even considered the argument that it is only by the grace of American taxpayers that members of Financial Products even have jobs, let alone a pool of retention bonus money. I hope the Committee will take up this issue at its hearing tomorrow.
Furthermore, we know that AIG was able to bargain with its Financial Products employees since these employees have agreed to take salaries of $ I for 2009 in exchange for receiving their retention bonus packages. The fact that AIG engaged in this negotiation flies in the face of AIG's assertion that it had no choice but to make these lavish multi-million dollar bonus payments. It appears that AIG had far more leverage than they now claim.
AIG also claims that retention of individuals at Financial Products was vital to unwinding the subsidiary's business. However, to date, AIG has been unwilling to disclose the names of those who received these retention payments making it impossible to test their claim. Moreover, as detailed below, numerous individuals who received large "retention" bonuses are no longer at the firm. Until we obtain the names of these individuals, it is impossible to determine when and why they left the firm and how it is that they received these payments.
If AIG were confident in its claim that those who received these large bonuses were so vital to the orderly unwinding of the unit, one would expect them to freely provide the names and positions of those who got these bonuses. My Office will continue to seek an explanation for why each one of these individuals was so crucial to keep aboard that they were paid handsomely despite the unit's disastrous performance.
As you may know, my Office yesterday subpoenaed AIG for the names of those who received these bonuses, and we plan to do everything necessary to enforce compliance. American taxpayers deserve to know where their money is going, and AIG's intransigence and desire to obscure who received these payments should not be tolerated. Already my Office has determined that some of these bonuses were staggering in size. For example:
-- The top recipient received more than $6.4 million;
-- The top seven bonus recipients received more than $4 million each;
-- The top ten bonus recipients received a combined $42 million;
-- 22 individuals received bonuses of $2 million or more, and combined they received more than $72 million;
-- 73 individuals received bonuses of $1 million or more; and
-- Eleven of the individuals who received "retention" bonuses of $1 million or more are no longer working at AIG, including one who received $4.6 million;
Again, these payments were all made to individuals in the subsidiary whose performance led to crushing losses and the near failure of AIG. Thus, last week, AIG made more than 73 millionaires in the unit which lost so much money that it brought the firm to its knees, forcing a taxpayer bailout. Something is deeply wrong with this outcome. I hope the Committee will address it head on.
We have also now obtained the contracts under which AIG decided to make these payments. The contracts shockingly contain a provision that required most individuals' bonuses to be 100% of their 2007 bonuses. Thus, in the Spring of last year, AIG chose to lock in bonuses for 2008 at 2007 levels despite obvious signs that 2008 performance would be disastrous in comparison to the year before. My Office has thus begun to closely examine the circumstances under which the plan was created.
I look forward to continuing to cooperate with the Committee in any way possible to ensure that taxpayer funds are not misspent on unjustified bonuses or otherwise misused.
Very truly yours,
Andrew M. Cuomo
Attorney General of the State of New York
This is outrageous. Without strings attached to its bailout money, A.I.G. has become a P.I.G.
Wednesday, March 11, 2009
Too Big To Fail?
Simon Johnson, Professor of Economics at MIT, explained to Bill Moyers (Moyers Journal on PBS) that the U.S. financial system currently reminds him more of the embattled markets of emerging countries he encountered in his time with the International Monetary Fund than that of a developed nation. As such, Johnson believes that the U.S. financial system needs a "reboot," breaking up the biggest banks, in some cases firing management and wiping out shareholder value. Johnson tells Bill Moyers that such a move would not be popular with the powerful banking lobby: "I think it's quite straightforward, in technical or economic terms. At the same time I recognize it's very hard politically."
Without drastic action, Johnson argues, taxpayers are merely subsidizing a wealthy powerful industry without forcing necessary systemic changes:
"Taxpayer money is ensuring their bonuses. We're making sure that banks survive. And eventually, of course, the economy will turn around. Things will get better. The banks will be worth a lot of money. And they will cash out.”
“And we will be paying higher taxes, we and our children, will be paying higher taxes so those people could have those bonuses. That's not fair. It's not acceptable. It's not even good economics."
Johnson expands these arguments on his blog, THE BASELINE SCENARIO:
"…weakening the big banks and their bosses should not be seen as an unfortunate side effect of beneficial medicine. It is exactly what we need to do under these circumstances. Unless and until these banks' economic and political influence declines, we are stuck with too many people who know exactly what they can get away with because their organizations are too big to fail."
“And weakening these banks (or actually having some of them go out of business and be broken up) as part of a comprehensive system reboot - with asset revaluations at market prices and a complete recapitalization program - will help return the credit system to normal.”
H-m-m-m. Break up the huge banks into smaller banks. Take their power away from them. Make sure they are never again too big to fail.
Interesting idea. I like it.
Without drastic action, Johnson argues, taxpayers are merely subsidizing a wealthy powerful industry without forcing necessary systemic changes:
"Taxpayer money is ensuring their bonuses. We're making sure that banks survive. And eventually, of course, the economy will turn around. Things will get better. The banks will be worth a lot of money. And they will cash out.”
“And we will be paying higher taxes, we and our children, will be paying higher taxes so those people could have those bonuses. That's not fair. It's not acceptable. It's not even good economics."
Johnson expands these arguments on his blog, THE BASELINE SCENARIO:
"…weakening the big banks and their bosses should not be seen as an unfortunate side effect of beneficial medicine. It is exactly what we need to do under these circumstances. Unless and until these banks' economic and political influence declines, we are stuck with too many people who know exactly what they can get away with because their organizations are too big to fail."
“And weakening these banks (or actually having some of them go out of business and be broken up) as part of a comprehensive system reboot - with asset revaluations at market prices and a complete recapitalization program - will help return the credit system to normal.”
H-m-m-m. Break up the huge banks into smaller banks. Take their power away from them. Make sure they are never again too big to fail.
Interesting idea. I like it.
Sunday, March 8, 2009
A lament for newspapers
The world has changed from the time of my youth – with high exposure to many types of media. But change is constant, so studying how the answer changes to what life is all about is important. Since I have a mind of my own, after garnering facts from newspaper articles (not the editorials), I’ll decide the answer for myself. But most people are so busy these days that they all too often do not pick up a daily newspaper and, instead, sit in front of the TV allowing the commentators to fill their brains with mostly garbage. Being retired, I have the time to spend a couple of hours browsing the internet to read online newspaper articles from all over the U.S. and the world. This helps me to be well-informed.
Survey the latest news about newspapers – the unending layoffs of staffers, the ever-shrinking content – and then understand that there's a threat here, not just for those being laid off from a struggling business, but to you. The threat is a curtailment of unadulterated, straightforward information resulting in a wholesale intellectual diminution.
Tom Watkins, a freelance writer and business education consultant, said, “Our newspapers are dying across America …. Does the death of newspapers equal the death of our democracy? We are losing great newspaper writers to budget cuts and early and forced retirements. One has to wonder when the last quality writer will be asked to shut off the lights of once-proud newspapers.”
Due to a lack of profit from falling retail advertising and circulation decline, thousands of newspaper jobs have gone out the window, many of them at our most prestigious papers. A study by the Pew Research Center shows that 85 percent of metro papers and more than half of small-town dailies have laid off staff over the past several years. The smaller staffs are accompanied by less space for news, and, according to Pew, we are therefore getting reduced coverage and quality. Many newspapers are completely shutting down such as The Rocky Mountain News, Denver’s leading newspaper for the last 150 years, and The Cincinnati Post, its presses stilled after 126 years.
It is easy to join the crowds in cursing mass media, putting newspapers into that same genre, chanting about negativity, bias, shallowness, tastelessness and more. Yet there is a broader truth about the accomplishments of print journalism and its place in our pluralistic, democratic society. Consider how much less you would know without newspapers. Your life experience would be less rich, less discerning, alert, or aware. It would be as if someone were dimming the lights, and those of us who are now newspaper readers would be more prone to misunderstandings, more likely to miss opportunities, and much more gullible.
Newspapers do something that television news cannot. They give you details, all those little pieces of information that add up to context and understanding. On television, a summary of a major event in a few minutes or more does not allow viewers learn much. It is the details that attach the information to your brain, and when they are provided in print, the brain works more intently than when watching television.
Too many people are turning to Faux News (Fox) and glitzy CNN to get information. But the television “news” channels provide very little in the form of real news. They are what I call “entertainment news.” They latch onto high profile stories, refusing to let go, all too often making news instead of reporting news. I do not need or want the “news” to give me presumptive or allegedly definitive answers to how the world works and why. That is the reason I do not particularly like “entertainment news” commentators such as Lou Dobbs on CNN, Keith Olbermann on MSNBC, or Sean Hannity on FOX. What they do is not news, but opinion which leans too far left or too far right.
The plentiful critiques and criticisms of the “entertainment news” media is a cacophony that dulls the ability of people to get to the heart of what they need to know, want to know, and why. As a thinking person, I want to find my own answers to how the world works. I do not want to be told what to think.
If people would spend at least 30 to 60 minutes each day turning off the “reality” shows on TV, and, instead, browse newspaper headlines and read a few articles about what is going on in the world, most would have a better understanding of life. The straightforward articles from the newspaper are the best place to garner unbiased information, with the exception being the editorial pages, because it is an “instruction manual for operating in the world.” As a history teacher, this is what I told my students. If they listened to me, and hopefully most did, they learned to ask who, what, when, where, why, how, so what and what does it mean – to be thinkers and doers.
Again, the newspaper is an instruction manual, not the manual. But it is a manual we citizens all need in order to maintain our democracy. In a dictatorship, what is one of the first industries they want to control? It is the newspapers.
Will “entertainment news” and bloggers become the new paradigm of news? I don’t know. I hope not. Many young people mistake Jon Stewart’s and Steven Colbert’s news parodies for news. They also rely on blogs for their news. Bloggers, like me, are not professional journalists.
Not all is necessarily lost. Perhaps innovative editors will come up with ways to use the internet to preserve the value of newspapers. A continued demand for better information products by an audience hungry for it, as well as brighter, braver, more imaginative media executives who come up with new business models and a better use of technology might help some newspapers survive.
It would help if more citizens understood the value of newspapers.
Survey the latest news about newspapers – the unending layoffs of staffers, the ever-shrinking content – and then understand that there's a threat here, not just for those being laid off from a struggling business, but to you. The threat is a curtailment of unadulterated, straightforward information resulting in a wholesale intellectual diminution.
Tom Watkins, a freelance writer and business education consultant, said, “Our newspapers are dying across America …. Does the death of newspapers equal the death of our democracy? We are losing great newspaper writers to budget cuts and early and forced retirements. One has to wonder when the last quality writer will be asked to shut off the lights of once-proud newspapers.”
Due to a lack of profit from falling retail advertising and circulation decline, thousands of newspaper jobs have gone out the window, many of them at our most prestigious papers. A study by the Pew Research Center shows that 85 percent of metro papers and more than half of small-town dailies have laid off staff over the past several years. The smaller staffs are accompanied by less space for news, and, according to Pew, we are therefore getting reduced coverage and quality. Many newspapers are completely shutting down such as The Rocky Mountain News, Denver’s leading newspaper for the last 150 years, and The Cincinnati Post, its presses stilled after 126 years.
It is easy to join the crowds in cursing mass media, putting newspapers into that same genre, chanting about negativity, bias, shallowness, tastelessness and more. Yet there is a broader truth about the accomplishments of print journalism and its place in our pluralistic, democratic society. Consider how much less you would know without newspapers. Your life experience would be less rich, less discerning, alert, or aware. It would be as if someone were dimming the lights, and those of us who are now newspaper readers would be more prone to misunderstandings, more likely to miss opportunities, and much more gullible.
Newspapers do something that television news cannot. They give you details, all those little pieces of information that add up to context and understanding. On television, a summary of a major event in a few minutes or more does not allow viewers learn much. It is the details that attach the information to your brain, and when they are provided in print, the brain works more intently than when watching television.
Too many people are turning to Faux News (Fox) and glitzy CNN to get information. But the television “news” channels provide very little in the form of real news. They are what I call “entertainment news.” They latch onto high profile stories, refusing to let go, all too often making news instead of reporting news. I do not need or want the “news” to give me presumptive or allegedly definitive answers to how the world works and why. That is the reason I do not particularly like “entertainment news” commentators such as Lou Dobbs on CNN, Keith Olbermann on MSNBC, or Sean Hannity on FOX. What they do is not news, but opinion which leans too far left or too far right.
The plentiful critiques and criticisms of the “entertainment news” media is a cacophony that dulls the ability of people to get to the heart of what they need to know, want to know, and why. As a thinking person, I want to find my own answers to how the world works. I do not want to be told what to think.
If people would spend at least 30 to 60 minutes each day turning off the “reality” shows on TV, and, instead, browse newspaper headlines and read a few articles about what is going on in the world, most would have a better understanding of life. The straightforward articles from the newspaper are the best place to garner unbiased information, with the exception being the editorial pages, because it is an “instruction manual for operating in the world.” As a history teacher, this is what I told my students. If they listened to me, and hopefully most did, they learned to ask who, what, when, where, why, how, so what and what does it mean – to be thinkers and doers.
Again, the newspaper is an instruction manual, not the manual. But it is a manual we citizens all need in order to maintain our democracy. In a dictatorship, what is one of the first industries they want to control? It is the newspapers.
Will “entertainment news” and bloggers become the new paradigm of news? I don’t know. I hope not. Many young people mistake Jon Stewart’s and Steven Colbert’s news parodies for news. They also rely on blogs for their news. Bloggers, like me, are not professional journalists.
Not all is necessarily lost. Perhaps innovative editors will come up with ways to use the internet to preserve the value of newspapers. A continued demand for better information products by an audience hungry for it, as well as brighter, braver, more imaginative media executives who come up with new business models and a better use of technology might help some newspapers survive.
It would help if more citizens understood the value of newspapers.
Wednesday, March 4, 2009
Rush gives the President a gift
The ultra conservatives are not merely the Republican "base," they've become practically the entire party. So, when CPAC met for their big gathering last week, it was to show America the foundation from which they will attempt to rebuild after getting crushed in the last two national elections and losing the White House.
With the nation's economy in freefall and two wars being fought, how did the conservatives at CPAC show their substance and depth? Their keynote speaker was Rush Limbaugh, a rightwing radio host; "Joe the Plumber" headed a discussion panel; and they had a 13-year-old child deliver a policy address.
If there is any doubt that Rush Limbaugh is now firmly in command of the Republican Party consider this: after Republican National Committee chairman Michael Steele called Rush Limbaugh a mere "entertainer" with an "incendiary" talk show, the next day on his radio show, Limbaugh returned fire and told Steele that he was not a “pundit” and should concentrate on building the GOP. Within a few hours, Steele apologized and acknowledged the radio commentator as a "national conservative leader." He is not the first conservative leader who has had to crawl to Rush with apologies after incurring the wrath of Limbaugh fans.
If you still doubt that Limbaugh is the de facto leader of the Republicans, the news coverage of Limbaugh's rant (speech at CPAC) this past weekend should dispel the notion. CNN, like FOX, gave Rush the kind of uninterrupted live coverage usually reserved for Presidents, followed by a panel of analysts to weigh and consider how important the speech was to our country! Although there were other GOP mouthpieces on the CPAC stage, including Karl Rove, only Limbaugh's hour-long speech was given news status.
In his CPAC speech, Rush once again said he wants the President of the United States to fail and makes no apologies for saying so. He told the Conservative Political Action Committee (CPAC) that he views the future of Americans like the Super Bowl, but their "team" is not the American people. Their team consists of conservative ideologues. Rush called upon his team to tell the American people they are "wrong." Evidently, conservatives have a very low opinion of the American people who want such non-conservative “rights” as a minimum wage and health care.
CPAC gave Rush an award for defending the Constitution – regardless of the fact that he said in his speech that the Preamble to the Constitution says: "we are endowed by our Creator with certain inalienable rights, that among these are life, liberty and the pursuit of happiness." (Not so – this is a quote from the Declaration of Independence.) This was not an error on Rush Limbaugh’s part. His misstatements are deliberate and purposeful. To his followers, the fact that Rush quoted the beginning of the Declaration as the Preamble to the Constitution and that the Declaration has no force of law in the United States is just a technicality.
Although they do not yet realize it, these ultra rightwing CPAC Republicans now have a major dilemma: in making the case against government action during the economic downturn they insisted on a literal interpretation of the Constitution. But this could fly back into their faces because a completely literal interpretation of the Constitution would permanently remove religion from the public square. There is an absence of any mention of God or the Bible in the Constitution. To those concerned about little things like logic, this would seem to be a dilemma. But Limbaugh’s followers combine the Declaration and Constitution into a category of "founding documents" and, in Rush's case, use the Declaration of Independence as the preamble to the Constitution.
Another problem for the right wing in using a literal interpretation of the Constitution is that the actual preamble to the Constitution, as written, clearly states the powers, rights, and processes that the rest of the Constitution describes. The preamble states the intents of the Founders such as establish justice, ensure domestic tranquility, provide for a common defense, promote the general welfare, and ensure the blessings of liberty to ourselves and our posterity. BUT conservative movement dogma only picks up on the “liberty” and the “common defense” part and chooses to ignore the remainder: justice and the general welfare. In believing this, the conservative movement rejects the Founders' vision and mission for the country.
Limbaugh, with his ultra fundamentalist conservatism, who all too often makes statements not based in fact, is leading a Republican Party suffering from a disappearing moderate wing. Several extremely conservative southern governors who have an eye on running for president in 2012 must follow Limbaugh’s lead. They are grandstanding by refusing part of Federal stimulus funds for their own communities.
Limbaugh is taking full advantage of the leaderless Republicans to seize power, shouting obstinate, often illogical, opposition toward an overwhelmingly popular new President. In publicly rooting for Barack Obama's failure, Limbaugh is leading gullible Republicans over a cliff. This is a Limbaugh lemming movement based in refusal to admit the nation's rejection of failed Republican policies. In their minds there is no need to recalibrate their principles to account for new realities such as the current economic crisis. They think they just need to find a better way to frame their message for the same old failed ideas.
In making Rush Limbaugh the de facto leader of the Republican Party, and following his edicts, they have given a political gift to the Obama Administration: instead of a principled point-by-point discussion and willingness to compromise at the bargaining table, President Obama is blessed with Republican belligerence and rejectionism. A large majority of Americans view Rush Limbaugh as a vitriolic loudmouth and the Republicans as the “Party of No.”
Obama knows he holds the winning hand for now.
With the nation's economy in freefall and two wars being fought, how did the conservatives at CPAC show their substance and depth? Their keynote speaker was Rush Limbaugh, a rightwing radio host; "Joe the Plumber" headed a discussion panel; and they had a 13-year-old child deliver a policy address.
If there is any doubt that Rush Limbaugh is now firmly in command of the Republican Party consider this: after Republican National Committee chairman Michael Steele called Rush Limbaugh a mere "entertainer" with an "incendiary" talk show, the next day on his radio show, Limbaugh returned fire and told Steele that he was not a “pundit” and should concentrate on building the GOP. Within a few hours, Steele apologized and acknowledged the radio commentator as a "national conservative leader." He is not the first conservative leader who has had to crawl to Rush with apologies after incurring the wrath of Limbaugh fans.
If you still doubt that Limbaugh is the de facto leader of the Republicans, the news coverage of Limbaugh's rant (speech at CPAC) this past weekend should dispel the notion. CNN, like FOX, gave Rush the kind of uninterrupted live coverage usually reserved for Presidents, followed by a panel of analysts to weigh and consider how important the speech was to our country! Although there were other GOP mouthpieces on the CPAC stage, including Karl Rove, only Limbaugh's hour-long speech was given news status.
In his CPAC speech, Rush once again said he wants the President of the United States to fail and makes no apologies for saying so. He told the Conservative Political Action Committee (CPAC) that he views the future of Americans like the Super Bowl, but their "team" is not the American people. Their team consists of conservative ideologues. Rush called upon his team to tell the American people they are "wrong." Evidently, conservatives have a very low opinion of the American people who want such non-conservative “rights” as a minimum wage and health care.
CPAC gave Rush an award for defending the Constitution – regardless of the fact that he said in his speech that the Preamble to the Constitution says: "we are endowed by our Creator with certain inalienable rights, that among these are life, liberty and the pursuit of happiness." (Not so – this is a quote from the Declaration of Independence.) This was not an error on Rush Limbaugh’s part. His misstatements are deliberate and purposeful. To his followers, the fact that Rush quoted the beginning of the Declaration as the Preamble to the Constitution and that the Declaration has no force of law in the United States is just a technicality.
Although they do not yet realize it, these ultra rightwing CPAC Republicans now have a major dilemma: in making the case against government action during the economic downturn they insisted on a literal interpretation of the Constitution. But this could fly back into their faces because a completely literal interpretation of the Constitution would permanently remove religion from the public square. There is an absence of any mention of God or the Bible in the Constitution. To those concerned about little things like logic, this would seem to be a dilemma. But Limbaugh’s followers combine the Declaration and Constitution into a category of "founding documents" and, in Rush's case, use the Declaration of Independence as the preamble to the Constitution.
Another problem for the right wing in using a literal interpretation of the Constitution is that the actual preamble to the Constitution, as written, clearly states the powers, rights, and processes that the rest of the Constitution describes. The preamble states the intents of the Founders such as establish justice, ensure domestic tranquility, provide for a common defense, promote the general welfare, and ensure the blessings of liberty to ourselves and our posterity. BUT conservative movement dogma only picks up on the “liberty” and the “common defense” part and chooses to ignore the remainder: justice and the general welfare. In believing this, the conservative movement rejects the Founders' vision and mission for the country.
Limbaugh, with his ultra fundamentalist conservatism, who all too often makes statements not based in fact, is leading a Republican Party suffering from a disappearing moderate wing. Several extremely conservative southern governors who have an eye on running for president in 2012 must follow Limbaugh’s lead. They are grandstanding by refusing part of Federal stimulus funds for their own communities.
Limbaugh is taking full advantage of the leaderless Republicans to seize power, shouting obstinate, often illogical, opposition toward an overwhelmingly popular new President. In publicly rooting for Barack Obama's failure, Limbaugh is leading gullible Republicans over a cliff. This is a Limbaugh lemming movement based in refusal to admit the nation's rejection of failed Republican policies. In their minds there is no need to recalibrate their principles to account for new realities such as the current economic crisis. They think they just need to find a better way to frame their message for the same old failed ideas.
In making Rush Limbaugh the de facto leader of the Republican Party, and following his edicts, they have given a political gift to the Obama Administration: instead of a principled point-by-point discussion and willingness to compromise at the bargaining table, President Obama is blessed with Republican belligerence and rejectionism. A large majority of Americans view Rush Limbaugh as a vitriolic loudmouth and the Republicans as the “Party of No.”
Obama knows he holds the winning hand for now.
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