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Just like the government's tardy recognition of the recession, nine months after the fact, Washington has become embarrassed over and over again by the scandalous behavior of Wall Street investment banks and corporate executives. This includes: overindulgent life styles at company, shareholder, and taxpayer expense; outrageous bonuses by money losing companies; corporate jets; lavish business retreats; gaming of stock options and more.Our nation has been strip-mined by corporate executives that think short term, focus on themselves instead of their company, and people they represent, and have been negligent to consider the repercussions of their actions or inaction.
Strip-mining allows for the removal of minerals in the fastest and easiest way possible grabbing at surface material as you work your way down and cause havoc to the ecosystem. Environmental problems are of great concern now more than ever and the process is heavily regulated -- more so than the economic strip mining of the last few years.
Since Washington is so affected by lobbyists whose interests are not aligned with the overall public well-being (note: I did not say welfare), as the cynic would say "the best government money can buy", the public is not getting its monies worth.
It has become my view, and that of many of our readers leaving comments, for as long as I have been writing, that relaxed government oversight which started with the Reagan administration and continues through this day has allowed a free-for-all in the board rooms of America. From this, a perverted form of the trickle down theory took hold, where middle managers and staff were released on America by leaders with dubious ethical standards, if not specifically directed through policy decisions and practice to pursue unthinkable business transactions.
While both Democratic and Republican administrations made a mess, it was the recent Bush administration that opened up the flood gates and was blind to, or did not want to face the looming disaster, that we are now trying to survive. At least in this one regard, he was the wrong guy at the wrong time. We needed greater scrutiny, not less!
As if we had not already mortgaged our future with federal budget deficits, trade deficits, and more, we now had bankers working over time to devise new ways to bankrupt a nation using extreme leverage. Our economy has been a sham for years and now we are having to pay for it.
My fellow citizens, many of you are at fault as well, buying homes and speculating with little or no money down, buying giant flat screen televisions you do not need and cannot afford, and running up credit card debts and living beyond your means just like the government you would chastise for it's deficits. Importantly this has slowed down to a trickle in the private sector while the government is making up for it by running up even bigger deficits.
The government pushed the banks to make foolish home loans to folks that could not afford it, and allowed investment banks like Merrill Lynch to increase their leverage from 12:1 to 40:1 -- shear lunacy!
Even 'my pal Warren' who discussed many of the business ills of our nation years ago, did not scream loud enough, or often enough, and should have used his position and resources to hold everybody more accountable. He has always been reluctant to call anyone out specifically, and straddles the political fence. Note that he thought both Clinton and Obama worthy and later spoke equally of McCain. Yes. that was a great big fence he was sitting on, registered Democrat or not.
He is not one to burn any bridges, and although I admire him greatly, I think he could do much more than he does to make things better.
I will be very disappointed if Mary Schapiro, President Barack Obama's choice as chairperson of the Securities and Exchange Commission, does not turn into Elliot Ness of the Untouchables's fame and clamp down on the relaxed standards of the past and unwind the nations high tolerance for risk.
She has direct and indirect ties all over the economic spectrum including Bernard Madoff, though a 2001 appointment of son Mark Madoff; and Warren Buffett, through her seat on the Board of Kraft Foods (NYSE: KFT) which she has resigned.
Ms Shapiro, if you need help, I am at your service and you know where to find me. You might also read the occasional comments I receive to keep your "Main Street cred" -- some of them are treasures.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. DISCLOSURE: I currently own shares of BRK.B.
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Reader Comments (Page 1 of 1)
1-30-2009 @ 4:57PM
dvc_tgr said...
until I read your artcle Iwas lamb being lead to death by 1000 cuts.If can get me made that means average persons are in a rage. Iwill start with my congressman and start yelling NO MORE STRIP MINING.
1-30-2009 @ 5:16PM
lbj033 said...
obama and his socialist government is now strip mining america of taxpayer money-----he is now payoff unions and other organiztions for their votes with that money-------------
1-30-2009 @ 7:32PM
Terry Finn said...
HOPEFULLY the government will give us a list of safe investment plans, people. etc.
Would also like a formula for knowing when to buy a house, how much, etc and then run it by Government regulators to make sure I am not being stupid.
1-30-2009 @ 5:49PM
brupig1 said...
it's the mentality of "bling"
1-30-2009 @ 6:31PM
brupig1 said...
CHENEY AND BUSH DID A "DRIVE BY"ON OUR COUNTRY AND YOU DUMB "LEMMINGS"ARE PAYING THE BILL FOR HALLIBURTON!A $1.00 ALLEN WRENCH THAT YOU CAN GET AT ANY HARDWARE STORE,WAS MARKED UP TO $150 BY "GOVERNMENT CONTRACTORS"WHAT THE F?I WORK MY ARSE OFF FOR MY "CRUMBS THAT FALL OFF THE TABLE,TRICKLE DOWN THEORY YOU STOOPID BUTT LICKERS ADMIRE SO MUCH"ITS A GOOD THING WE FINALLY HAVE A GOVERNMENT THATS IN FAVOR OF EDUCATION AND PROMOTING THE INTELLIGENT AND CREATIVE,AND NOT JUST THE FOLLOWERS THAT HAVE NEVER HAD AN ORIGIONAL THOUGHT OF THEIR OWN!I HAVENT BEEN OUTTA WORK FOR 30 YEARS TILL NOW!THATS OK I BEEN LIVING ON $5.00 AN HOUR FOR ALL MY LIFE,THE CHANGE AINT KILLING ME.ITS THE POOR BSTRDS THAT GOT PAYED TOO MUCH FOR DOING NOTHING THAT ARE BLOWING THEIR HEADS OFF.SO IT IS WRITTEN,SO IT BE DONE!IM NOT MAD BUT THE PROBLEM WITH THE WORLD IS"SOME OF US CANT SEPERATE PRIMAL OBSESSION,FROM HIGHER GOALS"
1-30-2009 @ 11:08PM
Frank ODonnell said...
Obama and all the little Obamas are now
showing how immature and foolish they really are, his appointees are not qualified because of conflicts and they make fools out of themselves in public
statements which are ackward and irrelevant to circumstances and issues.
This President is a 2nd Lt. with little or no
wisdom or experience, he will waste two years learning how dumb his judgement is about America's future...........then with
two years left he will try to undo his disastrous first 6 mos. Hi stimulus Plan is
a payoff to government workers and unions, it will not make wealth creation jobs, just temporary ones for 24 mos. until the $$ runs out, we deserve better !
1-31-2009 @ 10:17AM
paul moser said...
Just for your Info the Glass Steagal Act, a depression era bill which seperated the regulation of commercial banks from the investment banks was repealed in 1999 under Clinton. This allowed much greater freedom of the banks to increase leverage on their loans.
In addition, the Community Redevelopment act gave regulators the power to impose litigation against those banks which did not make a portion of their loans to people of poor credit hunce the begining of the sub-prime mortgage mess.
It would seem that the wrong legislation was enacted and also repealed. I would put it to you that the problem wasn't enough regulation,as much as it was the wrong legislation
2-09-2009 @ 9:05PM
brupig1 said...
ITS GAMBLING WITH OUR MONEY.IM NOT A GAMBLER.THESE FUCKERS TAKE OUR HARD EARNED DOLLARS AND BUY THEMSELVS $200 CIGARS,HOUSES IN DUBUI AND SUPPORT THE CONTRAS.IF THESE BASTERDS HAD TO WORK OUT IN SUB ZERO TEMPS,AND HAD TO SEW UP THEIR OWN FLESH WHEN THEY WERE BLEEDING,THEY WOULD DIE CAUSE THEY GOT NO BALLS!DONT GET ME STRONG,BUT CLOSE THE BORDERS,KEEP MY MONEY IN THE STATES AND KEEP WALL STREET FROM MANIPULATING OUR GOVERNMENT.IM A GENTIL SOUL BUT IM GETTING PISSED OFF.THE GREEDY TOOK OVER BUT GIVE THOSE BASTERDS 40 ACRES AND A MULE AND SEE WHAT THE FUCK THEY CAN DO.THAT IS THE STATE OF THE UNION!I'LLTAKE GW BUSH FOR A RIDE!HE'LL SHIT HIMSELF.OBAMA HAS THE BALLS TO ASK FOR MORE!!!!