Do you know what a credit default swap is? Neither does Wall Street apparently, even though the investment banks and brokerages sliced and diced them, traded them, loaded down their customers with them and — who knows? — perhaps converted them into nutritious, high fiber snacks and sold them to the public schools.
Tracking down all the credit defaults swaps and their skittering little friends, the derivatives, and herding them back into their pens is essential to getting the current financial crisis resolved quickly. We have to. The rest of the world is laughing at us and we can’t have that.
No less than the economic sage and president of Iran, Mahmoud Ahmadinejad, showed up at the United Nations to crow, "The world economy can no longer tolerate the budgetary deficit and the financial pressures occurring from markets here in the United States, and by the U.S. government."
When even the nut cases get on you, it’s bad.
Our friends weren’t much better. Brazilian President Luis Inacio Lula da Silva said, "We must not allow the burden of the boundless greed of a few to be shouldered by all." Boy, did he miss the whole point of that $700 billion bailout.
Clearly, he never saw the movie "Wall Street" in which the oily and treacherous financier Gordon Gekko tells an audience, "The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies … " On Wall Street that was not taken as a cautionary lecture against giving into baser instincts but regarded more as operating instructions.
But right now we’re not looking real good.
The Bush administration, Treasury secretary Henry Paulson and Wall Street lobbyists are desperately trying to block any limitations on executive compensation in the bailout bill.
Paulson argues that some firms, rather than see their CEOs reduced to the near penury of his own salary, $191,300, will refuse to participate in the bailout. We want to be at the shareholders’ meeting where the CEO announces, "Rather than give up my $20 million severance package in return for unloading the toxic assets that are killing our company, I’ve decided we’ll go bankrupt. You’re life savings are a small price to pay for this important point of principle."
The wise CEO might want to let this one slide. French President Nicolas Sarkozy said the culprits behind this meltdown should be "controlled and punished." If he’ll send over a guillotine or two, the people who lost their homes and retirements will take it from there.
At one time, Wall Street was regarded by the wider world as the visible symbol of American economic power. The hands of its financiers were seen everywhere, and the old time Communists raged against the bourgeois capitalist jackals of Wall Street cynically exploiting the honest, upright — and, the way the Communists portrayed them, none too bright — working class proletariat.
The caricatures of the Wall Street titans were corpulent bankers in top hats, waistcoats and spats, swilling champagne and showering greenbacks on cavorting showgirls.
Now the image of Wall Street is a parade of grim-faced employees carrying boxes of belongings as they exit their shuttered employer — a Bear, Stearns or Lehman Brothers — for the last time.
Don’t anybody dare laugh.