Monday, September 14, 2009

Lehman Brothers Burns in Hell

In honor of the mighty fall of a mighty bank, almost exactly (less one day) a year ago. Dedicated to the way the very fabric of our society has been torn to tatters by these and similar rogue companies. And dedicated to all those who have suffered or will suffer as a result of this tragedy of human hubris and pain intolerance.

Image Courtesy of David Shankbone, cc SA 3.0 & GNU 1.2 Licenses under condition of attributing the artist and share alike.

I read an article in the NYT the other day about how Lehman Brothers had to die for the financial sector to live. The crux of the argument is that without Lehman there would've been no federal bailout. This is certainly true. But, did the federal bailout really help us in the end?

Not long after the federal bailout was authorized, AIG gave huge bonuses to their executives. They apparently did this with the full-hearted agreement of certain not-to-be-named Obama cabinet members (okay, it was the Treasury Secretary), and mystified many, who saw this as rewarding the very people who started the crisis. The companies, under intense pressure from the President, underwent the supremely hypocritical and politically caniving action of demanding that the executives give the bonuses back (?) as if they have the right to ask such a thing when it was the company's own sleaziness that distributed the bonuses to begin with. Notice any trends? Perhaps a little systematic incompetence and corruption? A particular AIG exec, Jack DeSantis, wrote a rather impassioned letter pointing out the supreme level of hypocrisy and irresponsibillity involved in such a transfer of blame, especially when his sector of the company was one of the few strong points, and was derided at by a hyperbolically riduclous American public who could not see beyond the size of his bonus. Which brings us to our next point.

What was the very intention of the bank bail-out? What was the point? What's the big idea? Well, Obama said they were "too big to fail" and that rather then letting nature take it's course on these corrupt, tyrannical, unclean, and generally absurd willfully sinning banks, we should come in and save them, both financially, and from themselves.

And here's the big dilemma: if we don't do interfere in their affairs, the natural corruption and self-congratulating nature of these banks up way past their bedtime will cause this to happen AGAIN. And if we do interfere, these mediocre, socialistically controlled banks will stifle all competition and innovation in the financial sector by way of their immense government investments and protections, removing one entire potential for American growth, stunting the development of financial cities like NYC, Atlanta, Miami, Chicago and Dallas, and making us completely dependent upon London & Frankfurt for the financial side of our growth. In particular, we can kiss the supremacy of the Dollar goodbye - now it'll be the Euro that's the world's chief currency! Just like rent controls pushing the development out of historic Manhattan to the edges, this bailout will, by way of similar controls, push financial innovation and new markets to other continents.

If we had let these banks fail, there would've been no liquidity in our economy and the price of taking a loan or converting assets would shoot through the roof. Ah, but here's the good news: the high price of loans and low price of assets would create a massive incentive, a veritable gold rush, on the part of private investors to build their own banks. It would also stimulate small business, as new companies could still acquire financing (and through it cheap assets) through selling their original stock on the NASDAQ. Just like how San Francisco, within two years of it's great 1908 earthquake, had rebuilt the city completely (though rents did briefly shoot through to three times their original price), our financial sectors own immense price gouging would rebuild Manhattan, both literally and figuratively, and in the end create a more stable, meritocratic, compartmentalized, dynamic, innovative, and small-business geared economy.

New banks, new financial centers, new small business, new great cities, and new organizations that no longer work on the handshake, wink wink, nudge nudge system. That would be America's financial future. But not now - now that Banks are too big to fail, the market is too crowded to succeed! We've got ourselves a corporate traffic jam, and all 12 lanes on this freeway are packed with old clunker cars that are twenty-feet long, weight 100 tons, and crash every five feet, so prepare for a slowdown and eventually being overtaken by Europeans riding horses.

Maybe part of the problem is we don't appreciate Hell enough. Don't get me wrong, Heaven's great, but sometimes you just need a trashcan or a cattleprod, and hell serves both these. Fear can be quite stimulating, and sometimes things just reach their condemnation. Like Pharoah in Exodus, they run out of chances, their heart is too hard, their actions too geared along the track of evil, destruction is the only place they can go, and if we do not put away "the evil from among us," it will corrupt the hearts of us all who are left and put us in a position where we can't be righteous even if we want to (like Jack De Santis). I was thankful to see this happen with Lehman's, and regret that more unrepentant sinners did not find their demise. Even worse, by not punishing or threatening in any credible way bad behavior, those who have already begun to take this road will never fork off of it, but take it straight to it's scarlet conclusion, destruction, for them or all.

It is obvious that the NYT wants to make Lehman Brothers Christ, but these, these banks, they be willful sinners, the unrepentant kind, the rebels without a cause, the apostates. We should've sent these guys to HELL!!!!

Courtesy of The Immaculate Heart, image shown by Our Lady of Fatima in 1917


Mister Repose, Again said...

I like how you tie the bailout to Obama when McCain and Bush both pushed for it, effectively passing the buck to the other party because you're a biased retard with the political equivalent of tunnel vision.

Jeremy Janson said...

Well, first of all, insofar as Obama is even mentioned in this article, he is mentioned to criticize HIS OWN WORDS and his actions with regards to AIG. That's not what this articles about really, but 1) as a good editorialist I must always consider what the opposition, especially the opposition with power, is speaking against me and 2) the AIG fiasco serves to highlight one example of what's wrong with this policy and way of thinking about the economy.

But beyond that, Obama himself was in the Senate at the time, a DEMOCRAT Senate with a DEMOCRAT house. Democrats were hardly helpless. Fact is, the bailout before Obama was less then 700 Billion dollars - still a lot, but not the trillions were paying for today. Also, AIG, the greatest scandal of this saga, is entirely on Obamas' doorstep.

But greater then all of these is the fact that Bush is no longer in power. Regardless of what he did, Obama could've distanced himself from the trajectory of his predecessor, and he didn't, which is another way of saying that he VINDICATED BUSH. Bush is irrelevant, you guys have to stand on your own two feet. Sorry.

Duckta said...

Both Political parties supported the bailout because they both cater to the rich. AIG was the result of this failure of both the republicans and democrats.

Regulation is what we need so these banks can't take advantage of the American ideal ever again.

Jeremy Janson said...

I'm still not totally sure why this came off as a partisan article. I mention Obama because Bush is already gone, and thus in my mind it is Obama's responsibility to, at least, make things better, and if he is not willing to take this responsibility if he should not have taken the presidency. I know it is a hard time to be president, but he choose to run, and he got it. Now he must take responsibility as a leader for this nation.

Besides, trying times aren't just a burden, they're also an honor.