Sunday, December 27, 2009

The Lost Decade

The first decade of the new millennium is the "lost decade" for America, the one where we lost a surplus, gained a massive deficit, declared two wars with no intention of funding them, rounded up the usual suspects in those wars and set them to rot without charges in Gitmo for an undetermined amount of time, and threw in some VP-sanctioned torture as an add-on to the new millennial approach to national security.

It was a decade that began with all the drama of the hanging chad, a hotly contested presidential election teetering on the decision of Florida voters, a state led by the brother of one of the presidential candidates.

We finally came to decide the next president of the United States based on the opinions of the nine justices of the US Supreme Court.

The brother of the Florida governor won. When it comes to allegations of rigging a presidential election, the Daleys of Chicago have got nothing of the Bushes of America.

The transition of power happened peacefully; Democrats handed over the reins to Republicans and the spending began in earnest.

The new president realized that a vacation was in order, and many landmark moments happened when Bush was resting up – our president was in Crawford the month of August 2001 (just months after taking the oath of office) and thus missed CIA memos on possible terrorist attacks; he was on vacation when Katrina hit, and remained on vacation after it was apparent Katrina was the worst national disaster to hit the nation. Cutting branches seemed to be the occupation of preference for this particular president.

The decade included 9/11/01, the first attack on American soil since Pearl Harbor. A shocking, astonishing, grief-stricken moment. The president rose to the challenge and gave us that lovely and unforgettable image of him standing on the rubble of the Twin Towers, bullhorn in hand, supporting the heroic firefighters and encouraging America to look forward, to never give up.

We went to two wars in this decade with the army we had, not the army we wished to have – so said Donald Rumsfield, in response to questions about lack of proper equipment in the field.

Arthur Anderson crashed in this decade, after making the decision to throw out rules of accounting - if numbers not adding up to the client's desired outcome pissed off the client, Arthur Anderson's accountants decided it was best revise established accounting practices to make sure the numbers added to whatever the client wanted, truth be damned.

Enron was the result. A massive collapse of a massive company just months after we all witnessed the collapse of the two towers in NY. This tragedy was American made, with many thousands of people crushed by the crash of the giant E.

(Have a sneaky feeling that Skilling will be let off, when the Supreme Court comes to its decision on his fate.)

This was the decade that saw the collapse of our financial system, that saw the conservative president and his conservative Treasury Secretary (Bush and Paulson) initiate one of the most massive entitlement programs for American business - TARP. One year after TARP began, we also are now seeing some of the biggest bonuses ever for bankers who'd received federal bailout funds and survived the crash.

This was the decade that saw the most precipitous loss of jobs in decades, job losses that began in earnest once TARP went into law and job losses that have not yet been halted by the trillions in federal money thrown at the problems.

This was the decade that saw the election of America's first African American president. The election night celebration in Chicago 2008 was an extraordinary moment in American history.

As we move forward into a new year, a new decade, we have many problems to resolve. We have enormous deficits to overcome. As Americans, we have a legacy of hope and strength to draw from as we work to solve our problems.

Sunday, December 20, 2009

Of Fog and Phones

Jon Stewart's take on the absence of three CEOs from an important meeting with the President of the United States...

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Apparently, phoning it in was the best way for these top-notch bankers, mired in fog, to touch base with Obama...

It's a bitch when weather gets in the way of a personal meeting with the president.

Thursday, December 17, 2009

The business that credit forgot...

New job requires a daily commute on the Metra. Went to buy my monthly pass and discovered a notice posted on the ticket window informing all patrons that credit cards will be accepted at the train stations in the spring of 2010.

It's cash or check until then...

Ten years into the new millennium, credit cards will FINALLY be accepted at Chicago's metra train system.

Nice way to reinforce the antiquated nature of this mode of transport...

Saturday, December 12, 2009

Goldman Sachs changes compensation plan...

...for all 30 members of its management team.

Nice press release includes few pertinent details. Would love to know if this means the 30,000+ employees not affected by this plan now get bigger bonuses.

After all, Goldman's $17 billion bonus stash needs to be distributed to the many thousands of deserving employees, right?

In the press release, Lloyd Blankfein offers up this quotable nugget:

"The measures that we are announcing today reflect the compensation principles that we articulated at our shareholders' meeting in May. We believe our compensation policies are the strongest in our industry and ensure that compensation accurately reflects the firm's performance and incentivizes behavior that is in the public’s and our shareholders’ best interests.

"In addition, by subjecting our compensation principles and executive compensation to a shareholder advisory vote, we are further strengthening our dialogue with shareholders on the important issue of compensation.”

Strengthening the dialogue, perhaps, but giving the shareholders no real say in the matter, according to the press release.

"Shareholders will have an advisory vote on the firm’s compensation principles and the compensation of its named executive officers at the firm’s Annual Meeting of Shareholders in 2010."

Was not aware that shareholders needed Goldman Sachs to grant them "advisory" status on this issue. Seems like the shareholders have not been shy about offering their advice on this topic already.

Goldmans "news" provides valuable PR spin. But let's be realistic. Putting a limit on bonuses for 30 people in a company with 30,000 employees will hardly change a thing.

Wednesday, December 2, 2009


Bank of America is set to pay back $45 billion it owes TARP.

Funny how the need to free the company from CEO pay restrictions provided motivation for such an action...

For more, here's Felix Salmon's report.

And here's what the WSJ has to say.