Short term memory

Turn on any news program today and listen to pundits and politicians feign outrage at the executive bonus compensation that AIG is giving out. While it is egregious that AIG is giving away millions of tax payers money to the very people who actively participated in fraud, and the bilking of billions, it is important to remember that in the original draft of the TARP bill there was a $500,000 executive compensation cap. The very same people currently bitching and moaning about how poorly the Obama administration handled the TARP disbursement are the ones who spoke loudly against any kind of limits on executive compensation. They even managed to get the limit exemption dropped from the final bill. I guess they know the public can't remember what was said 2 months ago. (Unless they happen to turn on the Daily Show with John Stewart and he plays the video. The corporate media sure as hell ain't going to show us.)

A mere 4 years ago in 2005, a repub led congress, senate, and executive branch passed new bankruptcy laws that snuck in credit default swap and derivative contingencies. Basically this new legislation put the holders of the derivatives to the front of the line should a financial institution file for bankruptcy. While this law made it far tougher for the average citizen to stay afloat when filing for bankruptcy it made it so much easier for financial institutions to disperse whatever capital they had left to their wealthiest investors be they national or foreign. Even a Bank or investment houses employees and stock holders got pushed to the back of the line. Interesting to note that blame for this crap piece of legislation can be directly placed on both sides of the isle. Even our current VP Joe Biden voted for this thing.

This all leads one to believe that they all knew this was coming. The finger pointing and accusations are nothing more than posturing in an effort to cover their asses. Are you listening Chris Dodd?! Yes it's true that you wrote the amendment granting the compensation exemption that limited bonuses to $500,000 however, you're not above suspicion as last year you received a sweetheart deal on two of your mortgages, saving upwards of $75,000 courtesy of Countrywide, one of the biggest pushers of the subprime mortgages. As head of the U.S. banking committee he could have spoken out over the past 2 years when the Dems had a majority but, said nothing. (The Right has lied to the public about Dodd's amendment. Rush and Fox news report Dodd's amendment as the "exemption that allowed AIG to pay out executive bonuses. They conveniently leave out the cap amount he put in.)

The main reason this corruption has been allowed to take place is the repeal of the Glass Steagal act of 1933 . . . . Specifically the second act. In the nineteenth and early twentieth centuries, bankers and brokers were sometimes indistinguishable. Then, in the Great Depression after 1929, Congress examined the mixing of the “commercial” and “investment” banking industries that occurred in the 1920s. (Sound familiar?) Hearings revealed conflicts of interest and fraud in some banking institutions’ securities activities. A formidable barrier to the mixing of these activities was then set up by the Glass Steagall Act. (My my how history does seem to repeat itself. See what I mean by our collective short term memory? For the record, both Glass and Steagal were Democrats) The first Act established the Federal deposit Insurance Corp. The FDIC.

Now just out of curiosity let's see when and who was responsible for the repeal of Glass Steagal. Ah yes, back in 1999, the distinguished gentleman from Texas Senator Phil Gramm and in the House of Representatives by Jim Leach (Repub -Iowa) brought forth this dastardly piece of legislation. The bills were passed by Republican majorities on party lines, but the Dems are not completely absolved of responsibility as President Clinton signed the repeal into law. After that, brokerage houses and Banks could do as they pleased, they could create investments out of thin air and they did. With AIG's help these investments got AAA rated and insured for the maximum amount. In addition, the cancer of stocks as compensation became all the rage so that CEO's no longer cared about a companies health in the long term only how high they could get the stock to go. The financial market became a football game with no referees. The financial institutions could hold, clip, facemask, chop block, illegally forward pass all they wanted. And boy did they want to . . . .a lot. In case you didn't realize, you, me and damn near everybody else in the civilized world were and are the opposing team.

What can be done? How can this all be fixed? Got me? Short of a reboot . . .Wipe the slate clean and start all over again, I don't see how it can. Don't forget, the outstanding bill that is past due is more than the GDP of the entire planet.

DaG out