NOTHING NEW UNDER THE SUN
While the current financial crisis is especially disturbing and challenging to those of us who try to keep a somewhat optimistic viewpoint about the general teleology of things, it is indeed nothing new. On my shelf here in my office I have several finance volumes detailing all manner of wild and scary times in the financial markets in the history of Capitalism, which I highly recommend for your reading and edification.
First and foremost is Charles Mackay's "Extraordinary Popular Delusions and the Madness of Crowds." Even more pertinent to this time is Charles Kindleberger's excellent work entitled "Manias, Panics, and Crashes: A History of Financial Crises." A cursory glance at the history of financial convulsions in the U.S., from the 1870s (severe), 1907 (again severe and scary), of course the Great Depression era, the 1973/74 market break and "oil crisis," and so on provide the investor with a somewhat re-assuring (small compensation!) knowledge that "we've been there before" and survived. It is never pleasant to endure what we've been going through, but then again 1987 was not pleasant, 1990 was no picnic, 1994 wasn't so hot either, and 2000-03 was a freaking catastrophe. No sooner than the country gets somewhat "recovered" from the previous debacle than another unfolds, and this one is taking down pretty much everybody and everything. "No place to hide" is the reality of this awful market and time.
Check out this quote from The Economist: "...public credit depends on public confidence...The financial crisis in America is really a moral crisis (refer to my last post), caused by a series of proofs... that the leading financiers who control banks, trust companies and industrial corporations are often imprudent, and not seldom dishonest. They have mismanaged funds and used them freely for speculative purposes. Hence the alarm of depositors and a general collapse of credit..." Sound familiar? Funny thing: this is a quote from the November 2, 1907 edition of the magazine!
Indeed we do have a "moral" problem in this country with gambling on a grand scale. Hedge funds and derivative traders should be declared a public nuisance and banned. Companies such as AIG and Citigroup (among many others) who can't seem to manage what should be (and always were) wonderfully profitable businesses should not receive taxpayer bailouts to pay for their stupidity. Indeed, all big companies with worthless, corrupt, and unbelievably incompetent management should be allowed to fail. At the very least (referencing the current hullabaloo re: the proposed "bailout" of that giant dinosaur known as GM), there should be serious "strings attached" and requirements made of these awful companies if they are to indeed receive public funds, and the American taxpayers and workers should be the ones to ultimately benefit, not the corporate officers, who are summarily and uniformly worthless and deserve to 1.) not be paid for a year or two, 2.) at least be forced to take some serious paycuts, and/or 3.) be fired and put out to pasture. Perhaps they could log some time volunteering in some of our homeless shelters and rescue missions to get a clue... And lay off the $4000 per hour call girls...
I saw a t-shirt recently worn by an individual I know to be hard-working. His attitude correlates with mine, and I think it apropos to our time. It went like this: "Work hard - millions of people on welfare are depending on you."
The same could apply to GM, AIG, and so many others if taxpayers will be footing the bill for their colossal incompetence. Letting our biggest corporations get hooked on government "welfare" isn't setting the best of precedents.
But what else is new?
TTC
First and foremost is Charles Mackay's "Extraordinary Popular Delusions and the Madness of Crowds." Even more pertinent to this time is Charles Kindleberger's excellent work entitled "Manias, Panics, and Crashes: A History of Financial Crises." A cursory glance at the history of financial convulsions in the U.S., from the 1870s (severe), 1907 (again severe and scary), of course the Great Depression era, the 1973/74 market break and "oil crisis," and so on provide the investor with a somewhat re-assuring (small compensation!) knowledge that "we've been there before" and survived. It is never pleasant to endure what we've been going through, but then again 1987 was not pleasant, 1990 was no picnic, 1994 wasn't so hot either, and 2000-03 was a freaking catastrophe. No sooner than the country gets somewhat "recovered" from the previous debacle than another unfolds, and this one is taking down pretty much everybody and everything. "No place to hide" is the reality of this awful market and time.
Check out this quote from The Economist: "...public credit depends on public confidence...The financial crisis in America is really a moral crisis (refer to my last post), caused by a series of proofs... that the leading financiers who control banks, trust companies and industrial corporations are often imprudent, and not seldom dishonest. They have mismanaged funds and used them freely for speculative purposes. Hence the alarm of depositors and a general collapse of credit..." Sound familiar? Funny thing: this is a quote from the November 2, 1907 edition of the magazine!
Indeed we do have a "moral" problem in this country with gambling on a grand scale. Hedge funds and derivative traders should be declared a public nuisance and banned. Companies such as AIG and Citigroup (among many others) who can't seem to manage what should be (and always were) wonderfully profitable businesses should not receive taxpayer bailouts to pay for their stupidity. Indeed, all big companies with worthless, corrupt, and unbelievably incompetent management should be allowed to fail. At the very least (referencing the current hullabaloo re: the proposed "bailout" of that giant dinosaur known as GM), there should be serious "strings attached" and requirements made of these awful companies if they are to indeed receive public funds, and the American taxpayers and workers should be the ones to ultimately benefit, not the corporate officers, who are summarily and uniformly worthless and deserve to 1.) not be paid for a year or two, 2.) at least be forced to take some serious paycuts, and/or 3.) be fired and put out to pasture. Perhaps they could log some time volunteering in some of our homeless shelters and rescue missions to get a clue... And lay off the $4000 per hour call girls...
I saw a t-shirt recently worn by an individual I know to be hard-working. His attitude correlates with mine, and I think it apropos to our time. It went like this: "Work hard - millions of people on welfare are depending on you."
The same could apply to GM, AIG, and so many others if taxpayers will be footing the bill for their colossal incompetence. Letting our biggest corporations get hooked on government "welfare" isn't setting the best of precedents.
But what else is new?
TTC
posted by thoughtful conservative at 1:20 PM
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